Tesco - £5bn loss

[Puggit]

Sky reporting that Tesco will announce an annual loss of over £5bn tomorrow!

[FourWheelDrift]

Every little helps.

[Defcon5]

How is that even possible?

[Evolved]

Oh how the mighty can fall. Hardly ever use them nowadays.

[Axionknight]

Defcon5 said:

How is that even possible?

You spend six billion pounds, but only take in one billion?

[danjama]

I guess this is why they bought and stashed all that land/property

[FredClogs]

So, share price, up or down?

[Four Litre]

Something smells fishier than a rotting salmon

I wasn't aware Arthur Anderson were back doing accounts?

[Axionknight]

FredClogs said:

So, share price, up or down?

Down 0.11% over the last day, the next few days will be interesting if this is the case........

[Wacky Racer]

Can't see it myself....

Poor figures yes.

Jack Cohen would be turning in his grave......

[Countdown]

Defcon5 said:

How is that even possible?

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

[eldar]

Defcon5 said:

How is that even possible?

Revalue, downwards, all their lands' values?

[sleep envy]

danjama said:

I guess this is why they bought and stashed all that land/property

At inflated prices.

Kerching.

[Vaud]

Countdown said:

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

This. Get rid of all the bad news.

Most company books are based on "what would you like the answer to be?"

[Mermaid]

Countdown said:

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

An accountants dream. & for those on new share options

[tumble dryer]

Countdown said:

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

This. Exactly.

Who wouldn't ensure a nice clean desk before getting stuck in...?

[kiethton]

Countdown said:

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

Pretty much this.

He will take the opportunity to reduce the standing to build it up in his own way going forward.

The uncertainty around supermarket leases has also pushed out yields on supermarket property (covenants not as strong as they were and little alternative use), tesco owns a substantial proportion of its real estate, through itself and their pension plan (plus other JV's with propco's). There is also a substantial pension deficit...

Remember these are all paper losses, not cash so as long as income remains sufficient to cover liabilities it's all good and it'll show better growth numbers medium term LfL

[FredClogs]

tumble dryer said:

Countdown said:

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

This. Exactly.

Who wouldn't ensure a nice clean desk before getting stuck in...?

So share price will rise after the announcement?

[anonymous-user]

Vaud said:

Countdown said:

Basically

You bought your house for £10bn. The surveyor has just valued it at £5bn. You've just lost £5bn

Cr Fixed Assets
Dr Reserves

My guess is that the CEO is writing everything down basically so that all the bad news can be blamed on the predecessor.

This. Get rid of all the bad news.

Most company books are based on "what would you like the answer to be?"

+1

In the finance/markets sector I believe the practice is called 'Kitchen-Sinking'.

Basically you throw everything bad including the kitchen sink into the bad news pile so you can get it all out of the way (and blame the last CEO) before attempting to move the company forward.

[Welshbeef]

The thing is this land was purchased over a very long period of time and as today's prices are above the 2007 peak it raises questions as to were they inflated prices back then.. If so bonuses were paid out on those values.


Has the land been devalued too much?



Also chaps this means HMRC gets zero corporation tax this year and could be the case for years to come. Given they would normally pay a lot of tax half a billion maybe more that a massive impact to our public finances. Which department gets this now additional deficit.