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Tesco posts record loss of £6.4bn

Tesco has posted a record loss of £6.4bn, one of the biggest losses outside of banking in British corporate history.

In its annual results, published today, the supermarket group revealed it made a pre-tax loss of £6.38bn in the year to the end of February, compared with a pre-tax profit of £2.3bn the previous year.

The loss has been driven by £7bn in one-off charges, which the company says reflects “challenging industry conditions and profit decline”.

Tesco has also agreed a plan to fund its £3.9bn pension deficit with cash contributions of £270m a year. In January it confirmed plans to close its defined benefit pension scheme as part of a drive to cut annual costs by up to £250m.

Tesco chief executive Dave Lewis says: “It has been a very difficult year for Tesco. The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.”

It emerged last year that the FCA was investigating Tesco after the supermarket revealed it had overstated its half-year profit forecast by £250m.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Every Lidl helps!

  2. The headline is misleading. They actually made nearly £1bn profit on trading but writing off inflated store values in one hit makes the departing CEO look bad and will make the new one look good when results are much better next year. Which of course is why the share price did not move.

    Now that is the article the thinking financial press should have written. But we’ve got to follow the herd to get those catchy headlines…

  3. So Dave (Dave Lewis) what you are saying is we have got complacent, and greedy ?

  4. Every Lidl helps!

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