Tesco, Britain's biggest retailer, will exit its loss-making business in the US, taking a $1.5 billion write-off that caused its annual profit to fall for the first time in 20 years.

The group also wrote down the value of its property in Britain by 800 million pounds ($1,223 million) and its businesses in Poland, Czech Republic and Turkey by half a billion pounds and said growth in its core home market had slowed despite huge investment.

Shares in the group were down 2.8 percent in early trade giving the group a market valuation of 30.3 billion pounds.

The announcements were designed to signal a turning point in the fight-back for what was once one of Britain's most consistently performing companies - the world's third largest retailer after Wal-Mart and Carrefour.

"The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today," Chief Executive Philip Clarke said.

"I've been working for Tesco for nearly 40 years and I can tell you this - it already looks, feels and acts like a different and a better business."

It made a pretax profit of 1.96 billion pounds in the year to February 13, down 51.5 percent. It also reported a 14.5 percent fall in underlying full-year profit, largely reflecting the cost of a turnaround plan for its home market, launched after a shock profit warning in January last year.

Despite the heavy investment, the group said fourth-quarter sales at British stores open over a year, excluding fuel and VAT sales tax, grew 0.5 percent - a slowdown from growth of 1.8 percent in the six weeks to January 5.

That was at the top end of a range of forecasts of 0 to 0.5 percent and the strongest quarterly growth for three years, the company said.

Tesco's 1 billion pound fight-back plan for Britain focused on more staff, refurbished stores, revamped food ranges and price initiatives - all aimed at reversing years of underinvestment and halting a loss of market share to rivals like J Sainsbury and Asda.

As it reviewed the British business, it also took a write-down of 804 million pounds on its property investments. The write-down on the operations in Poland, Czech Republic and Turkey hit half a billion pounds.

Tesco also said it had increased its provision to cover the possible miss-selling of insurance products at its Tesco Bank to 115 million pounds.

Reuters