Tesco Uncovers £250m Discrepancy On Expected Half-Year Profit

by Benson Agoha

Tesco has uncovered an overstatement of it’s expected profit for the half year to the tune of some £250m. It comes as they prepare the accounts for it’s forthcoming interim results.

* Tesco CEO: Dave Lewis.

Tesco said in a press release early today that "on the basis of preliminary investigations into the UK food business, the Board believes that the guidance issued on 29 August 2014 for the Group profits, for the six months to 23 August 2014, was overstated by an estimated £250m. And that some of this impact includes in-year timing differences.

The statement said work is ongoing to establish the extent of these issues and what impact they will have on the full year and that the Board has asked Deloitte to undertake an independent and comprehensive review of these issues. They will work closely with Freshfields, the Group's external legal advisers.

In a short statement, Tesco’s new Group CEO, Dave Lewis, said “We have uncovered a serious issue and have responded accordingly. The Chairman and I have acted quickly to establish a comprehensive independent investigation. 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.”

Tesco said it will now announce its interim results on October 23, 2014 and will provide further update on the issue then.

Tesco's share price tumbled this morning, losing 8.56% of its value within one hour after the news broke.

Reports said several staff have been suspended, although Tesco's Press Office will not give further details on the issue when we called.