Tesco's preliminary results for 2015/16 describe a year of "significant progress" for the retailer, in which the group achieved a reduction of £6.2b in debts, principally due to the sale of its Homeplus business in Korea. An initial cost-saving programme of £400m was delivered

In Q4, LFL UK sales retruned to growth at 0.9%, while overall group sales grew 1.6%. Over the year, group sales were up 0.1% at £48.4b, operating profit £944m before exceptional items.

Sales performance improved in all formats and categories, with UK customer satisfaction up 5% over the course of the year, and UK volumes up 3.3% and transactions up 2.8% in Q4.

The year saw Tesco close more selling space than it opened, leading to a net reduction of 1.2 million sqft, 0.8million of which was in the UK and ROI. Tesco's UK and ROI property is now 47% freehold (up 6%), following two further transactions in February 2016.

Dave Lewis, chief executive, says: “We have made significant progress against the priorities we set out in October 2014. We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices. Our balance sheet is stronger and we are making good progress in rebuilding trust in Tesco and our investment case.

"Our process of transformation has generated broad-based positive momentum in the UK and internationally. We set out to start rebuilding profitability whilst reinvesting in the customer offer, and we have done this. More customers are buying more things more often at Tesco.

"As a team, we are committed to serving shoppers a little better every day, in what remains a challenging, deflationary and uncertain market. We are confident that the investments we are making are leading to sustainable improvements for customers whilst creating long-term value for our shareholders.”

However, the news did not prevent shares in Tesco from dropping today.

Crawford Spence, a Professor of Accounting at Warwick Business School who has researched the accountancy of Tesco, comments: "Dave Lewis, the CEO of Tesco, has played a canny game. On taking up the job in 2014, he immediately brought as many skeletons out of the closet as possible  profit overstatements, bullying of suppliers and identification of loss-making parts of the business.

"This had the dual effect of creating a sentiment of gloom around Tesco’s long-term prospects on the one hand, and legitimately blaming this perceived malaise on his predecessor on the other.

"That Tesco has now returned to profits must be a huge source of relief to Mr Lewis and should be seen as a vindication of his own personal strategy of positioning himself as a turnaround CEO. However, sober analysis suggests that the profits that they are actually making are quite modest in relation to supermarket rivals such as Sainsbury’s and Asda.

"That Tesco’s future is not necessarily all that bright appears to be a sentiment shared by market makers as well, as is indicated by the 4% drop in share price following announcement of the results. In short, Tesco is back, but not with a bang."