Pre-tax profits at Tesco soared almost 800% to £1.298 billion for the year to the end of February, up from £145m the year before when once-off costs had hit its bottom line.
Revenues for the year rose by 1.3% to £57.5 billion, while UK like-for-like sales were 2.2% higher thanks to "consistent strength in fresh food".
The group, which sealed its £3.7 billion takeover of wholesaler Booker last month, said it was on track to seal £200m of pre-tax savings as a result of the deal.
"This has been another year of strong progress, with the ninth consecutive quarter of growth", Tesco's chief executive Dave Lewis said.
"We have further improved profitability, with group operating margin reaching 3% in the second half. We are generating significant levels of cash and net debt is down by almost £6 billion over the last three years," the CEO said.
"All of this puts us firmly on track to deliver our medium-term ambitions and create long-term value for every stakeholder in Tesco," he added.
Tesco said that annual sales at its Irish stores rose by 2.7% on the back of strong fourth quarter sales growth of 5.3% and as customers responded well to "an even more competitive price position".
It noted that fresh food volumes here were particularly strong, growing by 5.2% year on year.
Tesco also beat guidance for its operating profits as it reported a 28.4% rise to £1.644 billion compared to the company's guidance of "at least" £1.575 billion and £1.28 billion made in 2016-17.
Dave Lewis joined Tesco in September 2014, tasked with turning around the group which had been hit by a fall in sales and profits due to changing shopping habits, the rise of German discounters Aldi and Lidl and a 2014 accounting scandal.
Lewis first stabilised Tesco, then got it growing again with a focus on more competitive prices, new and streamlined product ranges, better customer service and much improved supplier relationships.
Tesco today also announced its first end of year dividend since 2014, with a final payout of two pence, giving a three pence full-year dividend for shareholders.
