The UK's third-largest supermarket Asda, owned by US retail giant Wal-Mart has reported an 11.5% drop in profit for 2016.

Asda's latest financials reveal an underlying operating profit of £1.08bn in 2016, down from £1.22bn in 2015; its worst decline in annualised profit since Wal-Mart's £6.7bn takeover in July 1999.

Headline revenue fell 3.2% to £21.7bn with like-for-like sales down 5.7%, as Asda admitted its takings were "behind expectations" and that it was too slow in repositioning its business to counter the rise of discount retailers Aldi and Lidl, and price cuts by market leaders Tesco and Sainsbury's.

Chief financial officer Alex Russo said: "Our sales performance, relative to the market, was behind our expectations. However, in the last quarter of 2016, we saw an improvement following the changes made to our ranges and investment in price and service."

Asda also reported an operating cash flow of £1.41bn, an increase of 8%, and revealed a dividend of £450m was paid to Wal-Mart.