Asda swings to £600m loss as debt pressures mount
The supermarket was acquired from long-time owner Walmart and the deal has prompted Asda to undertake a costly project to divorce its computer systems from its former US parent.
Dubbed 'Project Future', Asda has spent heavily on the transition, shelling out £867m on it to date and £310m in 2024 alone.
Mr Gleeson said 2024 was an important year for the retailer, in which it oversaw a transition to the new IT systems, insisting it would be 'stronger and fit for the future as a result of the transformation progress made in FY24'.
However, the transition has been beset with issues and delays, such as an incident in March 2024 that saw thousands of workers receive incorrect payslips.
The plunge in profits comes as Allan Leighton, Asda's chairman, attempts to restore the supermarket to growth after a loss of market share to grocery rivals since its takeover.
Asda commanded 13.6pc of the UK grocery market at the beginning of 2024, but that figure had fallen to a record low of 11.9pc this month, according to Kantar.
Price war
Mr Leighton, a veteran retailer credited with turning around Asda's fortunes during a difficult period in the late 1990s, was drafted in to lead the company once more last November.
Since then he has kicked off a price war with supermarket rivals and embarked on a major cost-cutting push. The businessman has called many of Asda's issues 'self-inflicted', saying he wants to 'turn it into what it was'.
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.'
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