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| Tesco continues recovery but could face grilling over supplier of chicken | Tesco continues recovery but could face grilling over supplier of chicken |
| (4 months later) | |
| Supermarket expected to announce rise in sales as questions linger over investigation into 2 Sister Food Group | |
| Sun 1 Oct 2017 14.36 BST | |
| First published on Sun 1 Oct 2017 06.59 BST | |
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| Tesco’s recovery under Dave Lewis since a series of profit warnings is likely to continue this week. Analysts at Deutsche Bank are expecting the supermarket to announce on Wednesday a rise in like-for-like sales in the second quarter to 2% from 0.9% a year ago, despite the continuing competition from discounters Aldi and Lidl. They are forecasting underlying half-year earnings of £713m, up from £596m. | Tesco’s recovery under Dave Lewis since a series of profit warnings is likely to continue this week. Analysts at Deutsche Bank are expecting the supermarket to announce on Wednesday a rise in like-for-like sales in the second quarter to 2% from 0.9% a year ago, despite the continuing competition from discounters Aldi and Lidl. They are forecasting underlying half-year earnings of £713m, up from £596m. |
| There is some suggestion that Tesco could start paying a dividend again. Clive Black at Shore Capital said: “Management has guided, through the Booker merger announcement, its intention to recommence dividend payouts in [2017-18]. Our central expectation is that this would more likely than not to be a final payout but we shall watch with interest to see if a token is offered at the interim stage. Such a move would be welcome and express confidence.” | There is some suggestion that Tesco could start paying a dividend again. Clive Black at Shore Capital said: “Management has guided, through the Booker merger announcement, its intention to recommence dividend payouts in [2017-18]. Our central expectation is that this would more likely than not to be a final payout but we shall watch with interest to see if a token is offered at the interim stage. Such a move would be welcome and express confidence.” |
| Deutsche said: “We expect an interim dividend of 1.05p to be declared, representing 30% of our full-year expected dividend per share of 3.5p.” | Deutsche said: “We expect an interim dividend of 1.05p to be declared, representing 30% of our full-year expected dividend per share of 3.5p.” |
| No real news is expected on Tesco’s proposed £3.7bn purchase of cash-and-carry group Booker, announced in January, with competition authorities set to issue preliminary findings by the end of October. | No real news is expected on Tesco’s proposed £3.7bn purchase of cash-and-carry group Booker, announced in January, with competition authorities set to issue preliminary findings by the end of October. |
| At the results, directors are likely to be quizzed about the Guardian and ITV News investigation that found evidence that chicken supplier 2 Sisters Food Group’s West Bromwich plant had tampered with food safety records. | At the results, directors are likely to be quizzed about the Guardian and ITV News investigation that found evidence that chicken supplier 2 Sisters Food Group’s West Bromwich plant had tampered with food safety records. |
| Meanwhile, the legacy of the 2014 accounting scandal will be in the spotlight again this week as the fraud trial of three former executives, Carl Rogberg, John Scouler and Christopher Bush, continues. | Meanwhile, the legacy of the 2014 accounting scandal will be in the spotlight again this week as the fraud trial of three former executives, Carl Rogberg, John Scouler and Christopher Bush, continues. |
| Hoping the wheels don’t come off | Hoping the wheels don’t come off |
| Vehicle hire business Northgate might have thought the worst thing that could happen at Wednesday’s investor day would be cliched stuff about white van man. Instead, the board may have to fend off questions about last week’s decision to dismiss chief financial officer Paddy Gallagher. The company said Gallagher’s departure had followed “his conviction for the summary offence of common assault”. The conviction related to his personal life, said Northgate, but it considered his position “untenable”. | Vehicle hire business Northgate might have thought the worst thing that could happen at Wednesday’s investor day would be cliched stuff about white van man. Instead, the board may have to fend off questions about last week’s decision to dismiss chief financial officer Paddy Gallagher. The company said Gallagher’s departure had followed “his conviction for the summary offence of common assault”. The conviction related to his personal life, said Northgate, but it considered his position “untenable”. |
| How much more it can say is open to question, but it might give some indication as to whether David Tilston, the ex-Consort Medical executive appointed as interim chief finance officer, is likely to get the job full time. | How much more it can say is open to question, but it might give some indication as to whether David Tilston, the ex-Consort Medical executive appointed as interim chief finance officer, is likely to get the job full time. |
| A chartered accountant, Gallagher had previously worked at Spirit Pub Company, Rank and Dell. He joined the Northgate board in February 2016, and last year took home £402,000. He will now lose out on share options worth £487,499, according to the company’s annual report. | A chartered accountant, Gallagher had previously worked at Spirit Pub Company, Rank and Dell. He joined the Northgate board in February 2016, and last year took home £402,000. He will now lose out on share options worth £487,499, according to the company’s annual report. |
| On the trading front, analysts will be looking for confirmation that the positive start outlined at its annual meeting last month has continued. | On the trading front, analysts will be looking for confirmation that the positive start outlined at its annual meeting last month has continued. |
| Even the Davos boffins are worried | Even the Davos boffins are worried |
| Ten years after the global financial crisis sent shockwaves around the world, the World Economic Forum – the brains behind the annual gathering of the global elite in Davos – has warned of a possible new downturn. | Ten years after the global financial crisis sent shockwaves around the world, the World Economic Forum – the brains behind the annual gathering of the global elite in Davos – has warned of a possible new downturn. |
| It said in a report on global competitiveness: “The prospects for a sustained economic recovery remain at risk due to a widespread failure on the part of leaders and policymakers to put in place reforms necessary to underpin competitiveness and bring about much-needed increases in productivity.” | It said in a report on global competitiveness: “The prospects for a sustained economic recovery remain at risk due to a widespread failure on the part of leaders and policymakers to put in place reforms necessary to underpin competitiveness and bring about much-needed increases in productivity.” |
| The Bank of England recently warned of a potential consumer debt crisis, and the WEF said this was timely since there was evidence that the global banking system was less sound than before the financial crisis. In some parts of the world, conditions were declining further, it added. | The Bank of England recently warned of a potential consumer debt crisis, and the WEF said this was timely since there was evidence that the global banking system was less sound than before the financial crisis. In some parts of the world, conditions were declining further, it added. |
| Still, if a UK bank does run into trouble again, the taxpayer should be off the hook this time. On Monday the Bank of England is due to give an update on its approach if a bank goes bust, with investors rather than taxpayers picking up the bill. As a reminder, the UK government put £20bn into Lloyds Banking Group – now fully repaid – and £46bn into Royal Bank of Scotland in return for stakes in the banks. | Still, if a UK bank does run into trouble again, the taxpayer should be off the hook this time. On Monday the Bank of England is due to give an update on its approach if a bank goes bust, with investors rather than taxpayers picking up the bill. As a reminder, the UK government put £20bn into Lloyds Banking Group – now fully repaid – and £46bn into Royal Bank of Scotland in return for stakes in the banks. |
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