Tesco warns on profit guidance Live!

1632: “Tesco started today´s session with a second consecutive downwards gap, the upper part of which comes in at 229.6p (Friday´s closing level), making for a very nasty technical picture. To take note of, trading volumes were already quite high last Friday, which makes one wonder whether someone might not already have suspected that something might be amiss. In any case, until the stock is able to clamber back above the aforementioned level on a close-of-day basis then the outlook would appear to be quite clear cut. There are no obvious areas of technical support until the 156.8p mark,” muse technical analysts at Digital Look.

1324: In a note to clients analysts at SocGen highlight the lack of detail provided to shareholders by Tesco´s management, with the company having offered no breakdown between the commercial income from suppliers and delayed accrual costs to explain its reduced profit guidance.

1249: Worth noting that Mark Armour, a non-executive director of Tesco, is a director of the accounting watchdog, the Financial Reporting Council, Mark Kleinmann points out.

Worth noting that Mark Armour, a non-executive director of Tesco, is a director of the accounting watchdog, the Financial Reporting Council.

— Mark Kleinman (@MarkKleinmanSky) September 22, 2014

Just interviewed Dave lewis CEO of tesco. He says 250m is an estimate could be more and discrepancies could date back further than H1 2014

— Simon Jack (@simonjacktoday) September 22, 2014

1243: “This is clearly an early blow for the new CEO, who took up the reins on 1 September. […] Given the ongoing uncertainty this issue creates, we are moving our recommendation to Neutral while we await further information,” write analysts at Killik.

1119: Analysts at BNP Paribas say they don't expect Tesco chief executive Dave Lewis to take drastic actions. "As a ‘brand man’ we don’t expect Dave Lewis to be too blunt in his use of price as a weapon," BNP said in a note. "However, Tesco urgently needs to regain trust on price and he has just one shot at getting supplier support. As such we expect Sainsbury’s main competitor will get closer to ASDA on price. It means more margin pressure for Sainsbury and is why we’re 12% below consensus for estimates for the 2016 financial year."

1108: “Having earned the nickname "Drastic Dave" after restructuring Unilever UK in 2007, Tesco’s new CEO Dave Lewis will certainly need to take drastic action again if he is to rebuild the group’s reputation, left in tatters after Philip Clarke’s time in charge," said Julie Palmer, partner at corporate restructuring specialists Begbies Traynor.

1022: Mark Kleinman, Sky News' City correspondent reports that Carl Rogberg, Tesco's financial director, is among the executives suspended by the company.

1012: Tesco may have been looking to get ahead of the Groceries Supply Code of Practice (“GSCOP”), to obtain extra supplier payments, as GSCOP’s investigative powers do not come into full force until December of this year, Cantor´s Dennis adds.

0956: Mike Dennis at Cantor Fitzgerald is highlighting to clients how as far back as November 2013 he was incredulous as to how it could be that Tesco was able to support 5.2% trading margins in the UK in the face of rising costs and falling sales. The answer? By deducting monies from suppliers´ trading accounts or extending payment dates without notice. Hence, Dennis was of the belief that Tesco had been over stating its UK commercial gross profit by over £200m per annum. Nevertheless, as Alex Bueso, Editor in Chief at Digital Look points out, it is fairly typical in some European countries for supermarket operators to in essence use suppliers to obtain cheap financing. That much at least should not come as a surprise to anyone. Nevertheless, practices such as extending payment dates without notice means Tesco has overstepped the mark, Dennis adds.

0955: Tesco chief executive Dave Lewis said four senior executives are leaving the company and the group has brought in outside attorneys and auditors to investigate the issue. In a statement, the company announced the misstatement was due to booking revenue early and delaying costs, and there were preliminary investigations into its UK food business.

0939: Troubled retail giant Tesco has shocked analysts on Monday morning after saying that it had identified errors in its recognition of revenues and costs. As a result, its previous profit guidance for the six months ended on 23 August was overstated by £250m, the company has found. Analysts´reactions have been quite negative with some even asking for the structure of the board to be re-examined. Clive Black, Head of Research at Shore Capital went as far as saying that the news must raise "fundamental questions" regarding the chairman´s position. As of 09:19 shares of Tesco were lower by 7.62% to 212.1p.