As predicted Tesco full year results were walloped by the Fresh and Easy venture into the states. This has resulted in a freeze on the dividend policy. The final dividend of 10.13p per share will give a total annual dividend of 14.76p per share, the same as last year. A cut in dividend, whilst possible, would have sent a strong message reverberating around the markets suggesting that Tesco are prepared to cut the dividend, this would not wash at all well with the shareholders. The ex dividend date for the final dividend hasn't yet been confirmed however it will likely be very similar to last year which had an ex dividend date of the 25th April. As I stated above Tesco have seen a reduction in profit for this year. Whilst the overall sales have increased the cost of exiting the American market has cost them dearly and has hit the bottom line hard. The share price has opened well down this morning. The dividend policy is well covered however with a dividend cover of around 2.3. Once the market has settled down I think we will see future profits grow, I'll continue to hold.
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