Fitch puts Tesco on negative watch

Fitch Ratings said it placed Tesco plc’s BBB long-term issuer default rating and senior unsecured rating and short-term rating of F2 on Rating Watch Negative.

The actions follow the announcement of an overstatement of interim profits, removal of the full-year profit guidance and the initiation of a comprehensive review of these issues.

In a Sept. 22 announcement, Tesco advised markets that its half-year trading profit guidance of £1.1 billion confirmed at its trading update on Aug. 29 was overstated by an estimated £250 million due to the timing of commercial income realization. These accounting errors resulted in incorrect distribution of income between accounting periods. It is currently being investigated whether these accounting practices will have any material influence on the full-year profit guidance. An external audit investigation has been initiated to review group-wide accounting practices, including the suspension of divisional management, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.