British supermarket giant Tesco plunged deeper into crisis today after issuing yet another profits warning, cutting both its dividend and capital expenditure, and rushing in its new chief executive.
In reaction to the dire trading update, Tesco shares plunged by more than 8.0 per cent in early morning deals on the London stock market to strike an 11-year low point.
The company is Britain's biggest retailer and describes itself as "one of the world's largest retailers", with activities notably in China, India and eastern Europe.
The group, which has struggled on its main market in Britain in the face of stretched household budgets and fierce competition from German-owned discount chains, blamed challenging trading conditions and high investment costs for today's announcement.
Trading profit was forecast at between 2.4 billion pounds and 2.5 billion pounds (USD 4.0 billion and USD 4.2 billion) in the 2014/2015 financial year.
That was well below market expectations of between 2.7 billion pounds and 2.8 billion pounds, and was down on the 3.3 billion pounds reported in the prior year.
Tesco also slashed its interim shareholder dividend by 75 percent to 1.16 pence per share, while expenditure was cut by 400 million pounds to no more than 2.1 billion pounds.
And in another surprise move, new chief executive Dave Lewis will start on Monday -- one month earlier than planned -- in order to carry out a review of "every aspect" of the business.
"The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group," Tesco said in the statement.
"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 and consequently the board has revised its outlook for the full year."
Tesco had announced last month that outsider and Unilever executive Lewis would replace Philip Clarke, who had shocked markets at the start of 2012 when he oversaw its first profits warning for 20 years.
That sparked a 1.0-billion pounds turnaround plan to refresh supermarket stores, but the group revealed in April that annual profits fell for the second year in a row.
