Group sales soared 10.9 per cent to£46.6 billion and the company said it has made good progress on all parts of its strategy.
Core UK sales rose 9 per cent to£35.6 billion, up from£32.7 billion last year, with trading profits up 9.2 per cent. UK non-food sales soared 11.6 per cent to£7.6 billion. Sales in health, beauty, news and magazines were particularly strong.
Clothing sales climbed 16 per cent in a subdued market, partly affected by the unseasonal weather. However, the company said it made strong market share gains by focusing on volume and value.
Tesco Direct, the supermarket's catalogue and online operation, launched last September and the retailer said customer response has been very encouraging so far.
International sales soared 17.9 per cent, and trading profit was up 18 per cent to£564 million. Tesco.com sales rose 29.2 per cent and profit (pre-Tesco Direct start-up costs) rocketed 48.5 per cent.
Tesco Personal Finance made£130 million profit during the year. The supermarket's property funding programme is also now under way, with profits from property-related items reaching£139 million.
The retailer's share buy-back scheme started, with almost£470 million worth of shares re-purchased so far - and the company said it plans to increase the original£1.5 billion to£3 billion.
The supermarket has also introduced fresh initiatives relating to packaging, milk pricing, carbon labelling and regeneration during the year. And the company plans to create more than 25,000 jobs worldwide this year.
Tesco chief executive Sir Terry Leahy said: 'Tesco is investing for the future and delivering today. These results demonstrate that we have again made good progress across the group, while making significant start-up investment in new businesses and coping well with challenging conditions in some markets. We are pleased with the early performance from Tesco Direct and our plans to open stores in the United States
later this year are on track.'
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