Tesco’s (LON:TSCO) chief executive Dave Lewis has told a court of his ‘genuine shock’ upon learning of the £250-million overstatement of the company’s profits, the BBC has reported. The scandal broke about three weeks after Lewis took over as chief executive of Britain’s largest supermarket back in 2014.
Tesco’s share price has jumped in London in today’s session, having gained 2.04 as of 13:46 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having fallen deep into the red and currently standing 1.41 percent lower at 7,045.15 points.
Dave Lewis testifies in trial
The BBC reported yesterday that Tesco’s chief executive Dave Lewis had told Southwark Crown Court he had ‘no indication at all’ of the accounting black hole until it was brought to his attention by the supermarket’s legal department. His comments came as he was giving evidence in the trial of former Tesco directors.
Lewis said that his initial reaction to learning about the overstatement was “one of genuine shock, the level of what was implied in the paper was a way of operating I had not ever seen before”.
Tesco’s share price plunged more than 11 percent in September 2014 after the grocer warned that its pre-tax profits for the six months to August 23 had been overstated by an estimated £250 million.
Analysts on blue-chip grocer
Berenberg Bank reaffirmed Tesco as a ‘buy’ this week, valuing the shares at 295p. According to MarketBeat, the blue-chip grocer currently has a consensus ‘buy’ rating and an average price target of 268p.
Kepler Cheuvreux lowered its price target on the blue-chip grocer this week, pointing to Tesco’s troubles in Thailand where the company has been trying to renegotiate its deals with food manufacturers.