Tesco Shares vs announcement of £5bn loss

EdGasket

Couldn't Tesco simply have a share-split, then they could have a 'buy one, get one free' offer on the shares to boost demand a bit.

Glen_Clark

veryintrigued wrote: »

Weird comment.

They've done pretty alright under the Tory one the last five years i.e. 3-4billion operating profit each year for the last five.

http://www.tescoplc.com/index.asp?pageid=30

At the risk of stating the obvious it takes time to turn a supertanker around - you didn't get the full effect straightaway, and in any case those profits were clearly overstated.
Try and see through the pre election 'strongest economy in Europe' propaganda where they are counting rent increases as 'Growth' instead of inflation. The National Debt has doubled, UK credit rating has been downgraded so UK bond yields are already more than ten times that of Germany. Yet still Osborne is borrowing £billions to waste on housing market interventions that serve only to increase housing costs and housing benefit costs he is supposedly trying to cut.
Look at the other 3 big middle of the road retailers and you see they are suffering like Tesco.
Look at the cheap end (Aldi/Lidl) and the dear end (Waitrose/M&S food) and you see they are suddenly doing a lot better although they have all been around for many years.
Baliffs and foodbanks will tell you they have never been busier, house repossessions have never been higher, etc etc

veryintrigued

Glen_Clark wrote: »

At the risk of stating the obvious it takes time to turn a supertanker around - you didn't get the full effect straightaway, and in any case those profits were clearly overstated.
Try and see through the pre election 'strongest economy in Europe' propaganda where they are counting rent increases as 'Growth' instead of inflation.
Look at the other 3 big middle of the road retailers and you see they are suffering like Tesco.
Look at the cheap end (Aldi/Lidl) and the dear end (Waitrose/M&S food) and you see they are suddenly doing a lot better although they have all been around for many years.
Baliffs and foodbanks will tell you they have never been busier, house repossessions have never been higher, etc etc

Thankfully am pretty apolitical so I can see through most of the guff.

What I cant see through is your nonsensical post that a political party which was removed from office should take take credit for the five years of multi billion pounds success afterwards.

Does the reverse work for those grocers that didnt do so well in this period?

Now I like an afternoon drink as much as the next person but go easy next time eh?

Glen_Clark

veryintrigued wrote: »

Thankfully am pretty apolitical so I can see through most of the guff.

What I cant see through is your nonsensical post that a political party which was removed from office should take take credit for the five years of multi billion pounds success afterwards.

Pity you can't see through the five years of multi billion pounds success even though the profits were clearly overstated.

sabretoothtigger

elite25 wrote: »

It's it a good time to buy Tesco Shares tonight when they publish the report that talks about the £5bn pound loss?

Quick answer is this news is well anticipated so its in the price mostly. Companies are obligied to open disclosure, your advantage is when nobody knows future effects (on the share price)
If your confident or have some understanding of tesco and its dynamics then go ahead. I missed the whole lidl thing expanding personally, so did Warren apparently and that was pretty obvious

Common phrase, buy the rumour sell the news.

EdGasket wrote: »

Couldn't Tesco simply have a share-split, then they could have a 'buy one, get one free' offer on the shares to boost demand a bit.

If they were allowed free shares with value pizza as a thing, I believe it'd work much like points do seriously

KrytenIceCubeHead

Special offer! Tesco shares at 222.65 each, BOGOF for only 480.00 the pair!

bowlhead99

Glen_Clark wrote: »

Pity you can't see through the five years of multi billion pounds success even though the profits were clearly overstated.

It's not obvious to me that the profits, at least the trading profits, were "clearly overstated". In the current year exceptionals, it's only something like £200m which is being pulled out as a prior year overstatement which is neither here nor there when compared to the billions of profits booked in the last decade or whatever.

That isn't to suggest that the trading profits being recorded in those other years were sustainable for the long term, but there is a difference between making unsustainable profits and the more reckless charge of overstating the profit that you actually made.

Perhaps you are meaning that the profits were overstated because they didn't impair the property assets sufficiently in the previous years. However, that's not cash profits or trading profits, so is less important.

The political points about Osborne's housing market interventions or the activities of food banks or bailiffs, don't seem to be relevant to whether Tesco made the profit it said it did ?

Glen_Clark

bowlhead99 wrote: »

It's not obvious to me that the profits, at least the trading profits, were "clearly overstated". In the current year exceptionals, it's only something like £200m which is being pulled out as a prior year overstatement which is neither here nor there when compared to the billions of profits booked in the last decade or whatever.

That isn't to suggest that the trading profits being recorded in those other years were sustainable for the long term, but there is a difference between making unsustainable profits and the more reckless charge of overstating the profit that you actually made.

Perhaps you are meaning that the profits were overstated because they didn't impair the property assets sufficiently in the previous years. However, that's not cash profits or trading profits, so is less important.

The political points about Osborne's housing market interventions or the activities of food banks or bailiffs, don't seem to be relevant to whether Tesco made the profit it said it did ?

Aren't the over valued property assets part of the so called '3-4billion operating profit each year for the last five' ?
I am not trying to make political points. Just put forward a suggestion as to why all the middle of the road grocers, not just Tesco, are clearly losing customers at both ends. Sometimes these things may be inseparable from politics.
Tesco management might have said its due to rising inequality, were it not to leave them open to comments about the amount of their own remuneration?

bowlhead99

Glen_Clark wrote: »

Aren't the over valued property assets part of the so called '3-4billion operating profit each year for the last five' ?

Without knowing the numbers inside out, I'm going to go with "no", because fixed asset impairments or valuations are not part of operating profit.

Jsscmm

Putting aside the political debate... There is a valid point here... The more divided society suggested above would reduce middle of the road supermarkets such as tesco. The discounters and high end would be fine but the squeezed middle less so. Not saying I agree or disagree with the statement on the economy, but the implications for tesco and it's share price in the medium term could be negative.

Their current cheapest on brands and on essentials marketing suggests that they are trying to straddle that line, but it could be challenging.