Tesco PLC’s Interim Results 2014/15 were announced recently, revealing the conclusions of the Deloitte investigation into overstatement of expected half year profit. The impact was confirmed as £(263)m, of which £(118)m relates to first half trading profit, with the balance treated as a one-off item (being c.£(70)m relating to 13/14 and c.£(75)m to pre-13/14).
Sir Richard Broadbent, Chairman said: “The issues that have come to light over recent weeks are a matter of profound regret. We have acted quickly to clarify the financial performance of the company. A new management team is in place to address the root causes of the mis-statement and to develop and implement the actions that will build the company’s future. I am confident that the new Chief Executive and Chief Financial Officer will move rapidly and effectively in this respect.
Once this transition is complete and business plans are in place, it will mark the beginning of a new phase for the company and I will begin now to prepare the ground to ensure an orderly process for my own succession at that time. My decision reflects the important principle of accountability on behalf of the Board and will support the company to draw a line under the past as it enters the next phase of its development.”
Dave Lewis, Chief Executive said: “Our business is operating in challenging times. Trading conditions are tough and our underlying profitability is under pressure. We do however face these challenges from a position of market strength and I have been heartened by the team’s welcome and their determination to stay focused on doing the very best for our customers. Whilst my review of the whole business continues, three immediate priorities are clear: to recover our competitiveness in the UK, to protect and strengthen our balance sheet and to begin the long journey back to building trust and transparency into our business and brand.”
To view a video interview with Dave Lewis commenting on the results, please go to www.tescoplc.com/videos.
• UK like-for-like sales down (4.6)%, impacted by strong competition across the grocery market, headwinds from price cuts and fewer untargeted promotions
• £0.9bn Group trading profit – year-on-year decline reflects challenges of UK business
• Total UK online sales up 11%; like-for-like sales growth of +0.8% in UK convenience stores
• Interim dividend 1.16p as previously announced; full-year capex reduction to £2.1bn
• New Executive team in place and reviewing all strategic options to create greater shareholder value.