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Tesco’s profits fall by 92%


Tesco have suffered a 92% fall in pre tax profits this year, resulting in Tesco chairman Sir Richard Broadbent stepping down from his role in the firm. Tesco have also announced that they overstated their profits by £263 million, more than the £250 million originally thought.

Britain’s biggest retailer have also reported a sharp fall in sales and profits for the first half of this financial year, as profits slump to £112 million.
Tesco share prices have now fallen by 6% in early trading after the company published these results.

Richard Broadbent has said he will step down from the company after new chief executive Dave Lewis has established his strategy for the failing firm, which is likely to be next year.
He said:
"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."

The overstated sales were discovered by accounting firm Deloitte, who have now passed the case onto the FCA. It found that profits were overstated by £118m in the first half of this year, by £70m in the 2013-2014 financial year and by £75m before that. Eight executives have been suspended since it was revealed. They will remain suspended while the FCA investigates Tesco.

David Lewis, the new chief executive for Tesco, said:
"Trading conditions are tough and our underlying profitability is under pressure.
"We do however face these challenges from a position of market strength and I have been heartened by the team’s welcome and their determination to stay focused on doing the very best for our customers.
"Whilst my review of the whole business continues, three immediate priorities are clear: to recover our competitiveness in the UK, to protect and strengthen our balance sheet and to begin the long journey back to building trust and transparency into our business and brand."

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