Partly Cloudy

Partly Cloudy

max temp: 14°C

min temp: 2°C

Search

UK: Crisis-hit Tesco cuts dividend by 75%

PUBLISHED: 11:11 29 August 2014 | UPDATED: 11:11 29 August 2014

Tesco has cut its dividends

Tesco has cut its dividends

The trading crisis at Tesco deepened today as it revealed another profits warning and slashed its dividend to shareholders by 75%.

The supermarket giant said its new chief executive Dave Lewis will now start work a month earlier than planned on Monday in order to commence a review of “every aspect” of the group’s operations.

Tesco said market conditions remained challenging as it cut its forecast for 2014/15 trading profits to between £2.4 billion and £2.5 billion, well below City forecasts and down on the £3.3 billion reported the previous year.

In a blow to many pension funds, Tesco said its half-year dividend for shareholders will be 1.16p per share - a cut of 75% on last year’s figure.

It will also slow its store refresh programme in order to cut annual capital expenditure to no more than £2.1 billion - £400 million less than originally planned and a reduction of £600 million on the previous financial year.

Tesco chairman Sir Richard Broadbent said: “The board’s priority is to improve the performance of the group. We have taken prudent and decisive action solely to that end.”

Mr Lewis, a former Unilever executive, takes over from Philip Clarke, who was ousted last month after the company’s latest warning that profits will be “somewhat below expectations”.

At the start of 2012, Mr Clarke shocked the market with the group’s first profits warning in 20 years. It prompted the launch of a £1 billion turnaround plan but latest annual results showed earnings down for the second year running.

Tesco has been caught in the grips of a price war driven by the growth of discount rivals Aldi and Lidl, and a squeeze on household budgets.

The company said today: “The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group.”

Search hundreds of local jobs at Jobs24

A taxi and mini-bus hire company in Ipswich has stopped trading, leaving a group of customers with a prior booking waiting for a minibus that never turned up.

Although most of the 93,000 passengers passing through Stansted’s doors tomorrow for the start of their half term holidays will be blissfully unaware of it, the next few weeks will be a crucially defining moment in the history of Stansted Airport.

Greene King, the pub retailer and brewer, has been recognised for its work with young people by being awarded Recruitment Programme of the Year at this year’s UK Social Mobility Awards.

The topping out ceremony has taken place at a £14m new academy - the Paxman Academy - in Colchester.

People with learning disabilities or autism in Suffolk are to get walk-in advice, help and support from specialist provider of employment services for people with disabilities, Realise Futures.

Management Jobs

Show Job Lists

Most read

Topic pages

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy

MyDate24 MyPhotos24