18th Aug 2014 09:44
LONDON (Alliance News) - Tesco PLC's incoming Chief Executive may need to slash the group's GBP1.2 billion dividend, according to one of the supermarket's top investors, the Sunday Times reported.
David Herro of Harris Associates, which owns 3% of Tesco, said ?In general, dividends should be covered by free cash. This is not the case with Tesco." Herro goes on to say that the company either needs to cut its dividend or generate positive cash flow.
Dave Lewis will join Tesco as the new Chief Executive on October 1, joining from Unilever PLC and taking over from outgoing Chief Philip Clarke.
Tesco leads the FTSE 100 fallers Monday, down 0.7% at 246.40 pence.
http://www.thesundaytimes.co.uk/sto/business/Retail_and_leisure/article1447579.ece
By Jon Darby; [email protected]; @jondarby100
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