LONDON (FNS) -- Tesco is charting its expansion plans in Hungary.
The retailer here plans to open at least 20 stores in Hungary over the next five years The expansion strategy is tied to Tesco's $24.3 million purchase of a majority stake in Hungarian food retailer Global last June.
A Tesco spokesman said the company has not decided how many stores it will open in the current financial year. However, all 20 stores planned over the next five years will be
Tesco units and the eventual plan is to convert the Global stores to Tescos as well, he said.
There are 45 Global stores in northwest Hungary covering more than 100,000 square feet of selling space. Tesco said the Global investment represented an inexpensive way to penetrate an underdeveloped food retail market, which is dominated by regional, mainly state-owned, chains.
The U.K. food retailer opened its first Tesco store in Hungary in November. The 12,300-square-foot unit in Szombathely near the Austrian border is a full-service store that carries 7,000 product lines -- all major brands.
Tesco revealed its plans for the Hungarian market in reporting results for the year ended Feb. 25.
Tesco said its fiscal results were boosted by the first-time inclusions of the Wm. Low chain in Scotland, which it bought in September, and Global.
For the year, Tesco recorded earnings of $617.2 million (381 million pounds), up 27.7% from $484.4 million the previous year. Earnings per share rose 24.3% to 31 cents from 25 cents.
Sales increased 17.6% to $17.6 billion from $15 billion the prior year, the company said.
Currency conversions were made at the rate of one pound equals $1.62.
The core Tesco operation had a 14.8% rise in operating profits to $954.2 million. Sales increased 12.9% to $16.4 billion.
The company said it launched 2,500 new products last year, particularly in the areas of fresh foods and health and beauty care.