2014 has already been one to forget for Tesco, and the news just keeps getting worse.
The retailer has now warned that profits for the year ending February 2015 "will not exceed 1.4bn" – that's well below the 1.8bn-2.2bn the markets had expected and significantly down on the 3.3bn recorded the year before. In 2012 profits hit 4bn.
Shares in Tesco have this morning tumbled nearly 20 per cent on the news to 168p. At the start of the year Tesco was trading at 330p. Back in November 2007 they were trading at 484.5p, meaning that Tesco has very nearly halved in value in 2014.
In September Tesco admitted that it had overstated profits by 250m, with UK MD Chris Bush being one of several executives who were suspended as a result. In October it upped the overstatement to 263m.
We still have much to do but are making good progress in developing our plans to improve the long-term positioning of the group,” chief executive Dave Lewis said today.
Our priorities remain restoring competitiveness in the UK, protecting and strengthening the balance sheet and rebuilding trust and transparency.”
Tesco is focused, and will continue to focus, on doing the right thing for customers. This means running our business in a way that everything we do creates sustainable value. Whilst the steps we are taking to achieve this are impacting short-term profitability, they are essential to restoring the health of our business.
We will not engage in short-term actions that compromise in any way our offer for customers.”