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TESCO HAS DOWNGRADED its expected profits after admitting to “an overstatement” in its finances – to the tune of over €300 million.
The UK company, the world’s second-biggest retailer, told investors today there had been some accounting mistakes in its financial forecasts from August and it was anticipating to make about £250 million (€318 million) less than expected for the first half of the year.
It was the company’s third profit warning so far for 2014 after it said late last month that “challenging trading conditions” meant it was expecting to make a lower-than-expected £1.1 billion (€1.4 billion) in profits for the first half of the year.
Tesco’s interim financial results will now be released about three weeks late on 23 October and in the meantime it has ordered an independent review into the error.
“Work is ongoing to establish the extent of these issues and what impact they will have on the full year,” the company said in a statement.
A serious “issue” (aka screw-up)
Tesco Group chief executive Dave Lewis said the company had “uncovered a serious issue and (we) have responded accordingly”.
“The Chairman and I have acted quickly to establish a comprehensive independent investigation,” he said.
The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”
In August Tesco announced it was expecting to turn a trading profit of £2.4 billion to £2.5 billion for the latest financial year – down from £3.3 billion in 2013/14.
The company has put its flagging performance down to a weaker and more competitive UK market, where it does the biggest share of its business, and a sped-up shift to online shopping.
It has also been spending money as part of its moves into Asia, where it has been expanding its business in South Korea, Malaysia, Thailand and India.
READ: Companies too worried about themselves, not enough about jobless: Tesco boss
READ: Irish people need to stop expecting to pay €5 for a steak, say farmers
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Forgot to carry the three.
When they fire 4 executives and a whistleblower is involved then it was definitely no mistake!Looks like cooking the books in order to reach target levels to receive maximum bonuses. The question is, how many years has it being going on for and will they have to go back and restate many years accounts!?
they say forecasts not actual results , it mainly affects the guidance they give the market. Nothing here suggests that their actual results are wrong
They didn’t fire them, they have been suspended pending an investigation.
Dee4, yes but to receive said bonuses, actual results would have to match or exceed the forecast result. Or else they’re hoping to be able to benefit from any short term share price increase.
Tesco value calculators just don’t cut it.
Unexpected profit in the profit area.
i dont know about anyone else but as some one that shops for a family i could never understand how tesco was placed at no 1 for value…..i know i would never do my weekly shop there as i always found it too expensive and i felt that i must be a ineffective shopper that couldnt find the bargins! i have always felt that aldi/lidl and dunnes were cheaper……now todays revelation reveals they were massaging the figures!
I was wondering where Kevin Cardiff had ended up..
Snap!
That was exactly what I was thinking but I couldn’t remember his name!!
A company of this size. A mistake like this. Come on
Every little helps……
This is extremely dodgy stuff, Tesco were obviously over valuating their profit guidance. Lewis was only brought in recently from Unilever, not from a retail background and they’re hoping he’s the man to turn Tesco around.
The bigger they are, the harder they fall.
I saw an advertisement lately on TV for Tesco delivery in England. one-hour home delivery slots available for £1. Ireland customers however get charged between 4.50 to 6.50 for delivery!
Treasure Ireland
Every little helps
You must be great craic at parties. Wasn’t that funny the first time someone said it
Turns out he was a turf accountant.
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