Join our community of smart investors

Tesco doubters dominate argument

Despite respectable headline figures, the grocer is struggling to convince the market about its future plans
April 13, 2017

Tesco (TSCO) boss Dave Lewis is on a mission to shore up confidence in the supermarket's long-term recovery plan. The strategy to rebuild the grocer's margins inspired a significant re-rating in the company's share price last year, but the stock has slipped back since the start of 2017.

IC TIP: Hold at 189.5p

Tesco's proposed takeover of wholesaler Booker (BOK) has been seen by some analysts and shareholders as a distraction from the task at hand, while the 2014 accounting scandal continues to haunt. Case in point: pre-tax profits of £145m for the 2017 financial year were down more than a quarter (see table), largely thanks to a £235m charge in relation to the regulatory settlement and the related compensation scheme. Restructuring and redundancy costs added another £199m to the bill, although £165m earned from various property disposals helped offset this.

To continue reading...
REGISTER FOR FREE TODAY
  • Read 3 articles for free each month
  • Educational articles and topical investment guides
  • In-depth podcast episodes by our writers and industry professionals
  • Interactive live webinars on investment themes that matter
Have an account? Sign in