Tesco issues fresh profit warning, cuts interim dividend by 75%Friday 29 August 2014 08.12
Troubled British supermarket giant Tesco has issued another profits warning and slashed its shareholder dividend by 75%, blaming challenging trade and the high cost of investment.
The company added that new chief executive Dave Lewis will start on 1 September - one month earlier than planned - in order to carry out a review of "every aspect" of the business.
Trading profit was forecast to be in the range of £2.4bn-2.5bn in the current 2014/2015 financial year, Tesco said in a trading update.
That was well below market expectations and down on the £3.3bn reported in the previous year.
The group also slashed its interim shareholder dividend by a hefty 75% to 1.16 pence per share.
"The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group," it said in the statement.
"The business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments we are making flow through in the second half and consequently the board has revised its outlook for the full year."
The retail giant added that new boss Lewis will review all aspects of the group "in order to improve its competitive position and deliver attractive, sustainable returns for shareholders".
Tesco, which faces fierce competition in Britain from German-owned discount retailers and so-called supermarket price wars, had announced last month that outsider and Unilever director Lewis would replace Philip Clarke at the helm of Britain's biggest retailer.