Tesco Announce Massive Losses

It was not the announcement today that Tesco had made a huge loss that has spooked many traders, as it was expected they would be announcing a loss, but it has been the size of that loss that has taken traders by surprise!

In the year end to February the 28th Tesco have report a loss of a mind blowing £6.8 Million, which is their worst year on record, and having been around for 97 years now, that is some achievement even by Tesco’s standards!

It is not just one reason alone that has resulted in this record breaking loss, for whilst the accounting scandal exposed recently has seen a dramatic reduction in their profits, the very stiff and on-going competition Tesco faces from several different low cost supermarkets has added to their woes.

For the full year Tesco did make a £1.4billion profit as was expected which was much lower than last year’s profit of £3.3billion and is the third year in a row that they have seen a massive down turn in their profits.

However, what has made them report a huge loss was one off costs of a total of £7billion which included writing off £3.8billion having reviewed their portfolio of stores which have been underperforming for many years.

Another write down valued at an eye watering £925 Million was in regards to work in progress, which was due to them deciding not to proceed with opening 49 new stores across the UK. Tesco has a total net debt valued at £8.5billion and also has a net pension deficit of a whopping £3.9billion.

With this shocking news now spreading like wild fire the share value of Tesco is expected to take a massive hit today and in the coming days and weeks, and as such you should take that into account if you are thinking of placing any type of Binary Options on the Retail market place, more so when placing Binary Options trades on Tesco.

However, with this reported loss and the write down of their assets, the new CEO has of course for all intents and purposes wiped the slate clean, and over time Tesco under his leadership may be able to slowly bounce back, but with budget and low cost supermarkets snapping at his heels and constantly taking a massive share of their customer base, how Tesco shares will be affected will of course remain to be seen.