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| Tesco profit forecast overstated by £250m | |
| (35 minutes later) | |
| Tesco has launched a review after it found it had overstated its expected half-year profits by £250m. | |
| The supermarket chain said it was now working to establish the impact of the issue on its full-year results. | The supermarket chain said it was now working to establish the impact of the issue on its full-year results. |
| It had expected £1.1bn profit for the half year. It has appointed Deloitte to independently investigate the issue. | It had expected £1.1bn profit for the half year. It has appointed Deloitte to independently investigate the issue. |
| "We have uncovered a serious issue and responded accordingly," said Tesco chief executive Dave Lewis. Shares in Tesco fell 10% in early trading. | |
| Mr Lewis, who took the helm at Tesco on 1 September, said he expected the group "to operate with integrity and transparency". | Mr Lewis, who took the helm at Tesco on 1 September, said he expected the group "to operate with integrity and transparency". |
| "We will take decisive action as the results of the investigation become clear," he added. | "We will take decisive action as the results of the investigation become clear," he added. |
| In a statement, Tesco said the overstatement was "principally due to the accelerated recognition of commercial income and delayed accrual of costs". | In a statement, Tesco said the overstatement was "principally due to the accelerated recognition of commercial income and delayed accrual of costs". |
| It also said some of the error -which referred to its expected profits for the six months to 23 August - was due to "in-year timing differences". | |
| The error emerged when the firm was preparing its interim results. | The error emerged when the firm was preparing its interim results. |
| It had originally planned to publish these on 1 October, but they have now been pushed back to 23 October. | It had originally planned to publish these on 1 October, but they have now been pushed back to 23 October. |
| Deloitte will carry out its investigation with Freshfields, the group's external legal advisers. | Deloitte will carry out its investigation with Freshfields, the group's external legal advisers. |
| Profit warning | Profit warning |
| Shares in Tesco reached an 11-year low in August after the firm cut its full-year profit forecast to £2.4bn from £2.8bn. | Shares in Tesco reached an 11-year low in August after the firm cut its full-year profit forecast to £2.4bn from £2.8bn. |
| The supermarket group has been battling falling sales and a decline in its market share as discount chains such as Aldi and Lidl have gained in popularity. | The supermarket group has been battling falling sales and a decline in its market share as discount chains such as Aldi and Lidl have gained in popularity. |
| Previous chief executive Philip Clarke stood down in July after his attempts to revive Tesco's fortunes through a £1bn turnaround plan failed. | Previous chief executive Philip Clarke stood down in July after his attempts to revive Tesco's fortunes through a £1bn turnaround plan failed. |
| AvaTrade chief market analyst Naeem Aslam said Tesco had been "extremely slow" to respond to market changes. "Today's news is another disaster for the company," he added. | AvaTrade chief market analyst Naeem Aslam said Tesco had been "extremely slow" to respond to market changes. "Today's news is another disaster for the company," he added. |