British supermarket Tesco slides into first-half loss

Britain's biggest retailer Tesco said Wednesday the supermarket group had fallen into a net loss during its first half, partly on costs linked to an accounting scandal.
Losses after tax stood at £365 million ($557 million, 494 million euros) in the six months to the end of August, compared with a net profit of £6.0 million during the corresponding period a year earlier, Tesco said in a results statement.

"We have delivered an unprecedented level of change in our business over the last 12 months and it is working," chief executive Dave Lewis said.

Tesco is overhauling its business after reporting the biggest annual loss in its near 100-year history of £5.74 billion for the year to February.

The supermarket titan declared Wednesday that it was "on track" towards delivering a planned £400 million of annual cost savings from its ongoing radical restructuring.

The company is also facing a fraud probe after a huge accounting scandal that saw it overstate profits by £263 million owing to errors stretching back to before 2013.

Tesco has additionally been hit by falling sales on fierce competition from low-price supermarket rivals Aldi and Lidl, as well as restructuring charges and writedowns to its property portfolio.

The British group had meanwhile last month announced an agreement to sell South Korean unit Homeplus to a consortium led by private equity firm MBK Partners for more than £4.0 billion.

Around midday in London, Tesco shares rose 0.42 percent to 192.95 pence, having earlier fallen by almost 4.0 percent in initial deals.

"Tesco results ... highlighted the problems that the sector as well as the group have had over the past two years," said Graham Spooner, analyst at online trading firm The Share Centre.

"However, the retailer did beat analyst consensus expectations... in what is proving to be a challenging turnaround."

Operating profit in Britain and Ireland, excluding exceptional items, sank 69 percent to £166 million. That however beat market expectations of £130.5 million according to analysts polled by Bloomberg News.

Like-for-like sales -- a key retail measure which strips out the impact of new floor space -- fell 1.1 percent in Britain.

Tesco added Wednesday that it has decided against selling its Dunnhumby data analytics business following a strategic review.

Back in February, Tesco announced it would axe as many as 10,000 jobs under restructuring plans to shut 43 stores.

As part of the company-wide overhaul, the group slashed capital expenditure, revised its store building programme and put a number of assets up for sale.

Tesco has since disposed of its broadband Internet division and its TV-streaming service Blinkbox, as well as Homeplus in South Korea.