Black hole at Tesco may be much bigger

THE black hole i n Tesco’s accounts could be much bigger than first thought, according to an investigation by a leading investment bank.

Analysts at JP Morgan Cazenove have published research showing what could be a £174m gap in the grocer’s profit.

This is on top of the £263m figure Tesco already identified from independent analysis conducted by accountant Deloitte.

The investigation looked back at the accounts of nine Tesco subsidiaries filed at Companies House. It showed that, historically, when the profit figures are grouped together the total is very close to the profit figure Tesco Group posts annually.

JP Morgan tracked the trend over the past eight years adding together the profit from Tesco Stores, Tesco Property Holdings, Tesco Distribution, One Stop stores, dunnhumby, Dobbies, Blinkbox and Giraffe.

Two years ago the disparity stood at just £3m, but when the figures were crunched for the last year, the year in which there has been an accounting scandal, there is a much bigger £319m disparity.

Analyst Jaime Vazquez said: ‘The difference of £319m in 2013/14 includes £145m of the profit over- statement announced by the company of which £70m related to 2013/14 and £75m related to prior years. However this still leaves a gap of £174m, which compares with an average gap of £28m in the previous seven years.’

Tesco said that the data would not have included ‘intra company balances’ and was not a complete set of data. It urged caution on drawing conclusions.

The emergence of more woes for Tesco would stretch the credibility of new chief executive Dave Lewis who has insisted the £263m black hole was the final figure.

The shares rose 0.7p to 168.15p.