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Tesco interim dividend down 75% from last fiscal year
Sep '14
A combination of challenging trading conditions and ongoing investment in customer offers, led retailer Tesco to revise its trading profit guidance for the first half ending August 23, 2014 and full fiscal year 2015.

In the process, Tesco reduced interim dividend to 1.16 pence per share, down 75% from last fiscal year’s interim dividend.

In a statement, Tesco said, “The business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments we are making flow through in the second half. Consequently the Board has revised its outlook for the full year.”

The retailer now expects trading profit for fiscal year 2015 to be in the range of £2.4 to £2.5 billion and £1.1 billion for six months ending August 23, 2014.

Tesco also announced that Dave Lewis will now join Tesco as CEO from September 1 and that he will be reviewing all aspects of the Group in order to improve its competitive position and deliver attractive, sustainable returns for shareholders.

The board is focused on maintaining a strong financial position in order to maximise its business and strategic options, Tesco informed.

“Reflecting this and our current expectations for future performance, the Board anticipates that it will set the interim dividend at 1.16 pence per share, down 75% from last year’s interim dividend”, it added.

Tesco said it will also implement further reductions in capital expenditure and for fiscal 2015; it will now be no more than £2.1 billion, around £0.4 billion less than originally planned and a reduction of £0.6 billion from prior fiscal year.

This, Tesco informed, will be achieved in a number of areas including IT and the slower roll-out of its store refresh programme.

Sir Richard Broadbent, Chairman, said, “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 CEO Dave Lewis, will be reviewing every aspect of the Group’s operations”.

He further added, “The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic options."

Fibre2fashion News Desk - India

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