Tesco records 55% drop in profits
UK supermarket giant Tesco PLC has reported a 55% drop in profits for the first half of its financial year.
The £354m figure, compared with £779m recorded for the same period last year, highlights the problems the company is facing in an increasing competitive area of the UK economy.
Falling profits are only part of the problem, as the famous high street brand is also in the middle of a fraud investigation in the UK and dealing with a pending class action in the US.
Now there is news that Tesco has been in talks with the Serious Fraud Office (SFO) regarding a possible deal to conclude a criminal probe into the accounting scandal that led to a £263m black hole in its books.
Although the pre-tax profit was only £74m, it actually represents an improvement over the same period the year before, which came in at £19m.
However, like-for-like sales fell by 1.3% for the UK and the Republic of Ireland.
Fifty-three unprofitable stores have been closed in the UK since the start of the year, and the Tesco-owned South Korean Homeplus business has been sold for £4.2bn in attempts to control the increasingly dangerous situation.
Radical restructuring of operations in the Czech Republic, Hungary, Poland and Slovakia have also taken place, and taken all together, the moves are expected to produce an annual savings estimated to be worth £400m across the group.