Tesco has posted a rise in annual sales and earnings as it prepares for further growth following its takeover of Booker.

Tesco’s group operating profit before exceptionals rose 28.4% to £1.64bn last year, on sales 2.3% ahead at £51bn.

The market-leading grocer has now delivered nine consecutive quarters of like-for-like growth in its core domestic market and over the year, UK like-for-likes rose 2.2%.

The like-for-like improvement reflected “consistent strength in fresh food”, but there was a 0.4% “drag” resulting from changes to the general merchandise offer, Tesco said.

Tesco’s group operating margin reached 3% in the second half of the year, putting it “well on track” to meet its ambition of achieving a margin of between 3.5% and 4% in its 2019/20 financial year.

Tesco chief executive Dave Lewis said: “This has been another year of strong progress. More people are choosing to shop at Tesco and our brand is stronger, as customers recognise improvements in both quality and value.

“We have further improved profitability. We are generating significant levels of cash and net debt is down by almost £6bn over the last three years.

“All of this puts us firmly on track to deliver our medium-term ambitions and create long-term value for every stakeholder in Tesco.

“I am delighted to have completed our merger with Booker, and we are moving quickly to deliver synergies and access new growth, making the most of the complementary skills in our combined business.”

Tesco reported that it drew 260,000 more shoppers as brand perception improved and an overhaul of own-brand products continued.