Trading crisis deepens at Tesco
Published 29/08/2014 | 08:18
The trading crisis at Tesco deepened today as it revealed another profits warning and slashed its dividend to shareholders by 75pc.
The supermarket giant said its new chief executive Dave Lewis will now start work a month earlier than planned on Monday in order to commence a review of "every aspect" of the group's operations.
Tesco UK said market conditions remained challenging as it cut its forecast for 2014/15 trading profits to between £2.4bn (€3bn) and £2.5bn, well below City forecasts and down on the £3.3bn reported the previous year.
In a blow to many pension funds, Tesco said its half-year dividend for shareholders will be 1.16p per share - a cut of 75% on last year's figure.
It will also slow its store refresh programme in order to cut annual capital expenditure to no more than £2.1 billion - £400 million less than originally planned and a reduction of £600 million on the previous financial year.
Tesco chairman Sir Richard Broadbent said: "The board's priority is to improve the performance of the group. We have taken prudent and decisive action solely to that end."
At the start of 2012, Mr Clarke shocked the market with the group's first profits warning in 20 years. It prompted the launch of a £1 billion turnaround plan but latest annual results showed earnings down for the second year running.
The company said today: "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group."