Future of tesco, morrisons

2010

Expect another drop for Tesco on Monday when they make a statement about the book fiddling.
Warren Buffet must have lost a small fortune when he dumped 245 MILLION share in them recently.
He still has 3% which he`ll probaly dump in stages.
Their other main investor Blackrock recently sold 150 million.

With NAV at 135p, pencil in 150p shortly.

Scarpacci

Dave Lewis apparently sent a memo to Tesco staff yesterday and, according to media reports of the message, he expressed his belief that they will be able to give a full and accurate picture of the profit shortfall in the results this week. A investigation by the FCA, however, will still be ongoing.
http://uk.reuters.com/article/2014/10/17/uk-tesco-accounts-lewis-idUKKCN0I621L20141017

He also mentioned that in recent weeks Tesco had delivered its best numbers for a long time, so it looks like there's been some short-term improvement already.

Sky are also reporting that the profit shortfall is likely to be lower than first estimated, falling perhaps around £225m. http://sky.com/story/1355802/tesco-profit-shortfall-better-than-feared

Steve_xx

Scarpacci wrote: »

Sky are also reporting that the profit shortfall is likely to be lower than first estimated, falling perhaps at around half of the £250m first announced. http://sky.com/story/1355802/tesco-profit-shortfall-better-than-feared

I'm not reading the Sky report as you are. As I read it it says that the likely shortfall might be midway between 200 and 250 million. That would not be a half of what they were projecting at first.

Sky News understands that the supermarket chain plans to announce alongside its first-half results on Thursday that it had previously overstated earnings by between £200m and £250m.
The final figure was likely to be somewhere close to the middle of that range, a banking source said.

Scarpacci

Steve_xx wrote: »

I'm not reading the Sky report as you are. As I read it it says that the likely shortfall might be midway between 200 and 250 million. That would not be a half of what they were projecting at first.

Sky News understands that the supermarket chain plans to announce alongside its first-half results on Thursday that it had previously overstated earnings by between £200m and £250m.
The final figure was likely to be somewhere close to the middle of that range, a banking source said.

You're right. That's my mistake for posting & reading in a rush. So around £225m does seem to be the suggestion, then.

Steve_xx

Scarpacci wrote: »

You're right. That's my mistake for posting & reading in a rush. So around £225m does seem to be the suggestion, then.

Yes that's more like it!

2010

2010 wrote: »

With NAV at 135p, pencil in 150p shortly.

Seems I might have been too generous.

How Tesco PLC Could Drop To 100p!

http://www.fool.co.uk/investing/2014/10/22/how-tesco-plc-could-drop-to-100p/

kangoora

Well, I'm certainly not an expert but I was looking at these with a view to buying some and a few thing stood out to me.

1. Their actual overstatement for this years 'only' £118m, the rest of the £263m was from previous years.
2. I would imagine the new boss has told them to throw every possible charge or forecast charge that can conceivably be negative in this half years numbers (within legal and accounting limits this time hopefully). Firstly to get it out of the way and secondly so he can look like a miracle worker when/if they improve.
3. They've had a 92% drop in profits on 4.6% drop in sales - really? That also seems to reinforce the idea for me of them bunging all the bad news in this half years numbers.
4. They've been posting regularly £2bn+ profits, even if they've been inflating them by £100m that's still an awful lot of profit each year.
5. Aldi and Lidl may have improved their market share but at around 10% taken together they are still only roughly 1/3 of Tesco's market share.
6. If you work on the assumption that we are coming out of recession then when the economy is booming the discounters tend to lose market share to the bigger, plusher operations.
7. Finally, on their worst news day for about 20 years including the fact they slashed their dividend a couple of months ago they have only lost about 6.5% so far so it seems people are in there buying and holding up the stock price.

Having said all that, no doubt it is possible for the share price to still fall a lot. In my opinion, unless they discover a huge amount of other shenanigans in the cupboard, they've got the existing market share and the cash reserves to turn it around - even if it means selling off some non-core business which they have a fair amount of.

Minrich

My feelings as a shareholder is that they should run the UK business for 3 years at 1% profit margin . None of the others could match this and at the same time put Tesco Banks into their larger stores . This is what current account holders want , a bank on the high street , other banks have been closing them all around the country . Also to start to make big statements with the policies and plans , like openly supporting the farmers and food producers of this country . This would radically improve their image with consumers .

But then .... What do i know about it !

Thrugelmir

Minrich wrote: »

My feelings as a shareholder is that they should run the UK business for 3 years at 1% profit margin .

How do you run a business to create a 1% profit margin?

at the same time put Tesco Banks into their larger stores . This is what current account holders want , a bank on the high street , other banks have been closing them all around the country .

Banks are closing branches due to lower usage. The digital age. Tesco bank is growing organically. Possibly isn't able to roll out in scale as yet. As the infrastructure isn't in place.

Minrich

But then what do i know about it is a clue , lidl/aldi run at about that don't they ?