LONDON: Supermarket group Tesco, announced that it had plunged massively into the red last year as it took a hit on the value of its property.
Tesco, which was hit by a major crisis last October after accounting errors that overstated profits, reported a loss after tax of £5.74 billion in the 12 months to the end of February.
That compared with a net profit of £974 million in 2013/14, the group said in an earnings statement.
It has been a very difficult year for Tesco,” chief executive Dave Lewis said in the statement.
The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.”
Tesco announced £7.0 billion of one-off charges, mostly linked to a writedown on the value of its property.
It also revealed an impairment of £630 million relating to Tesco’s investment with China Resources Enterprise Ltd.
Stripping out the exceptional charges, Tesco reported annual pre-tax profit of £961 million, down 68 percent.
The market is still challenging and we are not expecting any let-up in the months ahead,” added Lewis, who joined Tesco in September.
Shortly after his arrival, Tesco revealed that it had overstated profits by £263 million as a result of accounting errors stretching back to before 2013.
Britain’s Serious Fraud Office is probing the accounting blunder at the group, which is the world’s third-biggest supermarket chain after France’s Carrefour and global leader Walmart.
The scandal sparked the suspension of eight Tesco executives and the resignation of chairman Richard Broadbent. Lewis has meanwhile already said he will shut a number of loss-making stores and scrap plans to open more outlets.
