Supermarket giant Asda returns to profit, as backer Zuber Issa prepares to sell to TDR

By Patrick Tooher

Updated: 12:28 BST, 21 April 2024

Asda has returned to profit, figures out tomorrow will show.

The supermarket chain is set to report a small pre-tax surplus after losing £74million in 2022.

The news comes as one of the Issa brothers who backed Asda’s debt-fuelled buy-out is about to sell his stake to private equity group TDR Capital.

Supermarket back in profit: Asda has returned to the black, helped by the launch of a loyalty app and a strong performance from clothing range George

Zuber Issa is said to be close to offloading his 22.5 per cent holding, which would give TDR majority control of Britain’s third-largest food retailer.

He and his brother Mohsin joined forces with TDR to buy Asda for £6.8billion three years ago from Walmart.

Surging interest rates pushed up the cost of servicing Asda’s debts while runaway inflation saw food prices rocket, hitting cash-strapped shoppers and the supermarket’s bottom line.

But Asda has returned to the black, helped by the launch of a loyalty app and a strong performance from clothing range George. Total sales excluding fuel rose by 7 per cent to £21.9billion, or by 5.4 per cent on a like-for-like basis.

Net debt has also fallen from £4.2billion as strong cash flow offset higher interest payments.

The results are a boost for the brothers who have denied talk of a rift between them. News that TDR was poised to take control of Asda was reported by Bloomberg.

Asda declined to comment.

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Supermarket giant Asda returns to profit, as backer Zuber Issa prepares to sell to TDR

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