Dave Lewis has joined Tesco as chief executive. He will be reviewing all aspects of the group in order to improve its competitive position and deliver attractive, sustainable returns for shareholders.
Sir Richard Broadbent, chairman, says: "The board’s priority is to improve the performance of the group. We have taken prudent and decisive action solely to that end. Our new chief executive, Dave Lewis, will be reviewing every aspect of the group’s operations. This will include consideration of all options that create value for customers and shareholders."
The business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments it is making flow through in the second half – consequently the board has revised its outlook for the full year, and now expects trading profit for 2014/15 to be in the range of £2.4-£2.5b. Trading profit for the six months ending 23rd August 2014 is expected to be in the region of £1.1b.
Consequently, Tesco will be implementing further reductions in capital expenditure. For the current financial year capital expenditure will now be no more than £2.1b – some £0.4b less than originally planned and a reduction of £0.6b from the previous financial year. This will be achieved in a number of areas including IT and the slower roll-out of Tesco's store refresh programme.
"The actions announced regarding capital expenditure and, in particular, dividends have not been taken lightly," says Richard. "They are considered steps which enable us to retain a strong financial position and strategic optionality."
