Tesco dividend tipped to return after hiatus
TESCO chief Dave Lewis will this week attempt to confirm the supermarket giant’s comeback by restoring its dividend, even as the alleged “colossal fraud” that blew a hole in its finances is laid bare in court.
Mr Lewis, who was drafted in to lead Tesco three years ago after investigators uncovered hundreds of millions of pounds of missing profits, scrapped the dividend months into his reign to help repair the balance sheet. Its expected return as part of Tesco’s half-year results on Wednesday comes as investor nerves are tested by the high-profile trial of three former senior executives accused of masterminding a scheme to “cook the books”.
The trial of Christopher Bush, Tesco UK’S former managing director, Carl Rogberg, the company’s former UK finance director, and John Scouler, former food commercial director, began on Friday. Bruno Monteyne, an analyst at Bernstein, has said that, while the size of any dividend may be small, it will be “important symbolically”.
The City expects Britain’s biggest retailer to unveil half-year sales that have nudged 3pc higher to £28.1bn while operating profits are forecast to have edged 2pc lower to £502m.
Mr Lewis and finance boss Alan Stewart will benefit as they deferred respective £860,000 and £424,000 share awards until 2019 or “until the resumption of dividend payments”.