Every little helps - and quite a bit hurts- as Tesco write down property holdings and move to forget mothballed stores such as Chatteris
- Credit: Archant
Tesco has moved to draw a line under falling profits and closed shops – such as their £25million mothballed Chatteris store- by a massive write down of their property portfolio.
The company today posted a £6.4billion annual loss after taking a massive write down on the value of its property portfolio.
The bottom-line reverse for the 12 months to February 28 caps a disastrous year for the chain following an accounting scandal and a series of profit warnings amid a ferocious price war with rivals.
Underlying profits were 68% lower at £961million but new chief executive Dave Lewis said the company had drawn a line under the past and was seeing some encouraging signs.
The bottom-line loss was driven by £7bn of one-off items, including £3.8bn from a review of its store portfolio in the light of declining profits. It also wrote down the value of work-in-progress by £925m following its decision not to proceed with 49 new stores.
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Tesco has also agreed a contribution of £270m a year to its pension fund after a valuation revealed a deficit of £2.8bn at the end of March last year.
“The market is still challenging and we are not expecting any let-up in the months ahead,” said Mr Lewis.
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“When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance.
“Our clear priority, and the one that will deliver sustainable value for our shareholders, is to improve consistently for customers. The changes we have made and will continue to make put us in a stronger position to do this.”