Tesco’s results are out today for the first half of the year , and they have been hammered. Shares are down more than 5% just as the London Stock Exchange opens Thursday, adding to the last month’s brutal sell-off.
- Like for like sales are down 4.6%, trading profit is down 41% to £937 million, and revenue is down 4.5%.
- Statutory profit before tax is down 91.9% to just £112 million for a business with revenue 300 times that. Dividends per share have collapsed to just 1.16 pence, a 75% decline.
- Tesco’s embarrassing profit over-estimation has been revised up to £263 million. That’s £118 million in the first half of this year, £70 million for 2013-14 and £75 million for previous years
- Earnings per share are through the floor. For continuing and discontinued operations, they’re down from 10.17 pence to just 0.07 pence, a 99.3% decline.
- Chairman Sir Richard Broadbent is standing down. Here’s his statement:
“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.”
New CEO Dave Lewis added “Our business is operating in challenging times. Trading conditions are tough and our underlying profitability is under pressure.”
In a note, James Abbott at Accendo Markets says this is “a fall in organic British sales described as the worst performance in 40 years” in the City of London.
Back in September Tesco was forced to restate its profits, which it had exaggerated by £250 million. Since then, the share price has plunged and world-famous investor Warren Buffet has said his confidence in the retailer was a “huge mistake.”
The share price is now down to £1.83 from £3.71 a year ago, collapsing by more than 50%: