27th Oct 2014 13:30
LONDON (Alliance News) - Tesco PLC said Monday it has put its fleet of private jets up for sale, as the UK's biggest supermarket chain battles with a drop in profits, sales and market share.
A Tesco spokesperson Monday said that "all aircraft operated by Tesco are in the process of being sold". The number of jets has been to reported to four, though the spokesperson couldn't confirm that figure. The fleet includes Tesco's Gulfstream G550, a top of the range 29-metre aircraft which has capacity for up to 18 passengers.
The news comes just days after the struggling grocer revealed last Thursday that its trading profit for the 26 weeks to August 23 fell by 41% to GBP937 million, while its pretax profit was down a huge 92% on the prior year to only GBP112 million. Group sales, including VAT, fell by 4.4% to GBP34.01 billion, while UK like-for-like sales were down 4.6%, as the supermarket price war continued.
Besides falling profits and sales, Tesco is still being investigated by the UK Financial Conduct Authority into the hows and whys behind its "accounting issue" which saw the retailer admit it had overstated its half-year profit expectation by GBP263 million, slightly more than the GBP250 million impact the retailer had announced last month.
Tesco has said that the GBP263 million practically all refers to the "timing of commercial income", admitting that some commercial income had been recognised in its accounts too quickly while accrual of costs in the UK food business had been delayed.
Tesco Chief Executive Dave Lewis told journalists last week that the group is undertaking a full review of its portfolio of businesses, and did not rule out either asset sales or a rights issue at some point in the future, although said it was not working on one at the moment. He said the retailer's balance sheet leverage is too high, and is considering "all options" to allow flexibility, including making sure its pension deficit is a "sustainable model going forward".
There has been speculation that Tesco could look to sell assets including its Blinkbox video streaming service, its Giraffe family-friendly restaurants, Dobbies garden centres and its Harris + Hoole coffe chain stake. The Daily Telegraph speculated its Asian business could be spun off, while Sky News also reported recently that private equity groups were circling its Clubcard loyalty scheme in the hope it will be sold.
Tesco shares were trading 0.6% lower Monday afternoon at 167.72 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Tesco