Asda’s rating has been upgraded by credit agency Moody’s from B2 to B1, following the supermarket’s “solid” financial performance last year.

During the full 2023 financial year, the retailer delivered a 24% rise in adjusted profits to £1.1bn, while sales jumped 7.1% to £21.9bn.

Underlying free cashflow for the grocer also increased 31% year on year to £776m, which contributed to Asda reducing its total leverage to a multiple of adjusted earnings after rent from 3.0x to 3.9x.

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Moody’s also said the upgrade took into account the positive impact refinancing would have on Asda’s future leverage.

Asda chief financial officer Michael Gleeson said: “We welcome Moody’s upgrade which acknowledges the strong performance of the business in FY23.

“This was underpinned by a solid capital structure that enabled us to deliver value for customers throughout the year and provided us with the confidence to boost growth through strategic acquisitions.

“We remain focused on doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success.”

It comes as Gleeson has dismissed talks that Asda’s owners are preparing to sell the supermarket giant.

He told The Times earlier this week that the grocer’s billionaire owners the Issa brothers and private equity firm TDR Capital had a track record “of growth and investing for the long run”.