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Tesco shares lose another 15pc as profit warning is issued


The financial pressure has been piled higher on the UK’s largest supermarket chain Tesco, as it was revealed share prices have slumped by a further 15 per cent.

For the third time in a matter of months the supermarket giant issued a profit warning, downgrading its estimate from its previous forecast, and in turn knocking value from the companies share prices. Tesco made a reported profit of £3.3bn last year, but a major accounting scandal in which the company’s six month profits were overestimated by as much as £250m has left a large black hole in its finances.

In the latest announcement from Tesco the company said that it was likely that profits for the second half of its financial year, which ends in February, would now be less than £1.4bn; a figure some way from the £2bn which was expected by analysts.

Mike Dennis, of capital markets investment bank Cantor Fitzgerald, said that it now looks likely that Tesco will make “very little, if any” profit over the aforementioned period, which includes Christmas.

In the fallout from the accounting scandal, Tesco lost a number of key members of staff including CEO Philip Clarke, who was replaced by Dave Lewis. Mr Lewis has since looked to introduce a number of new initiatives and investments to help boost sales, looking to the company’s long-term future.

He said: “In recent weeks we have implemented new policies and procedures which will govern our commercial income activities and take actions to invest in and improve our customer offer.

“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”.

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