Tesco ‘overstated’ profit predictions by £250 million

Investing and pensions

22 September 2014 | 1 Comment

Share price plummets as Tesco admits to accounting error.

Supermarket giant Tesco has admitted it overstated its half-year profit figures by a whopping £250 million.

At the end of August it told investors that its profits for the first half of the year would be around £1.1 billion. However Tesco has now uncovered a “serious issue” in the reporting of its UK food business, meaning that this figure was significantly exaggerated.

Four executives, including its UK managing director, have now been suspended, while Deloitte has been tasked with leading an inquiry into the reporting error.

Unsurprisingly, the news has been bad news for Tesco’s share price, which has fallen more than 10% over the course of Monday. In the past year it has fallen from 374p down to 202p today.

Is it time to buy Tesco? Or should it be avoided? Let us know your thoughts in the Comments box below.

Keep on top of your investment with our new Plans tool

More on investing:

Don’t rely on a dividend

Beginner's guide to stocks & shares ISAs

Beginner's guide to index tracker funds

Beginner's guide to exchange traded funds

Comments

Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.