Asda loses £600m amid major turnaround plan
Asda slumped back into the red after losing almost £600m in 2024 despite its total sales rising by more than £1bn, it has been revealed.
The Leeds-headquartered supermarket giant has posted a pre-tax loss of £599m for its latest financial year, having reported a pre-tax profit of £180.3m for 2023.
The profit in 2023 came after Asda made a pre-tax loss of £432m in the prior 12 months.
New accounts filed with Companies House also show its revenue increased over the same period from £25.6bn to £26.8bn. Excluding fuel, Asda’s sales fell from £21.9bn to £21.7bn.
When not accounting for non-underlying costs, which totalled £714.4m, Asda achieved a pre-tax profit of £115.4m.
For 2023, the chain’s non-underlying costs totalled £68m.
Asda is majority owned by TDR Capital while billionaire Mohsin Issa is a minority shareholder.
The supermarket giant said its operating profit before non-underlying items grew from £637m to £671m “driven by an improvement in trading margins, disciplined cost management through the delivery of operational efficiencies” as well as the consolidation of Asda Express (Jersey) and Arthur Foodstores for a full year.
The company said that was “despite a reduction in excluding fuel sales year-on-year and the investments into pay and hours.
It added that its operating loss, post-non-underlying items, included a net impairment charge of £378m and exceptional costs relating to its turnaround plan, Project Future, of £310m.
Asda released partial financial results in March, which showed its like-for-like sales fell by 3.4 per cent year on year, while revenue dipped 0.8 per cent to £21.7bn.
At the time, the chain also revealed that its adjusted earnings before interest, tax, depreciation and amortisation (EBIDTA) after rent increased by 5.8 per cent to £1.14bn.
However, its full revenue and pre-tax loss figures were not published.
An Asda spokesman said: “Asda’s core business remains strong and profitable, delivering a pre-tax profit of £115m before exceptional items.
“The reported overall loss is the result of two significant one-off costs: a £378m non-cash impairment charge, which reflects updated asset valuations, and £310m in one-time costs related to ‘Project Future’ – our strategic programme to separate Asda’s IT systems from our former owner, Walmart.
“These are not recurring costs and do not reflect the underlying performance of the business.
“A more accurate indicator of our ongoing strength is our adjusted EBITDA after rent, which increased to £1.14bn from £1.078bn the previous year.”
Asda ‘making good progress’
The results come after Asda’s chairman said in May that the supermarket giant is “making good progress” despite its sales continuing to fall.
The chain reported a revenue–excluding fuel of £5bn for the three months to 31 March 2025, the first quarter of its current financial year.
The total is a 5.9 per cent decrease year-on-year while its like-for-like sales adjusted for Easter, the four months to the end of April, declined by 3.1 per cent.
Its market share has fallen from 15 per cent in 2021, when it was bought by TDR Capital and the billionaire Issa brothers in a debt-fuelled takeover, to 12.1 per cent in May this year.
But its three-month sales performance from March to May was the grocer’s best for a year, according to Kantar.
Profit almost wiped out at billionaire’s empire
In June, City PM reported that profit EG Group, the empire co-founded by a major investor in supermarket giant Asda, had almost been wiped out ahead of a planned $13bn float in New York.
The Blackburn-headquartered group was formed by brothers Mohsin and Zuber Issa and is now co-owned by private equity giant TDR Capital.
Accounts filed with Companies House revealed the group’s pre-tax profit was slashed from $1.4bn to just $10m in 2024.
EG Group said the change to its pre-tax profit was “largely driven by the material exceptional gain that the group reported following the divestment of the majority of the UK business in October 2023 and the profit from the USA sale and leaseback transaction which completed in May 2023”.
Before those exceptional items, the group made a pre-tax loss of $195m but it generated a profit of $205m from divestments.
In 2023, the group made a pre-tax loss of $125m before exceptional items which generated a profit of $1.5bn