Tesco cuts its profit forecast

Struggling supermarket Tesco has cut its full-year profit forecast to £2.4bn from £2.8bn.

In a statement, it said the "challenging trading conditions and ongoing investment...continued to impact the expected financial performance of the Group".

The new start date for new chief executive Dave Lewis has been brought forward to Monday "in order to improve its competitive position".

The dividend has also been cut.

The company said it anticipated a

75% cut in its dividend, compared with last year, to 1.16p per share.

It also plans to cut costs in IT and slow the roll-out of its store refresh programme. It says capital expenditure for the current financial year will be no more than £2.1b - £400m less than planned.

"The Board's priority is to improve the performance of the Group. We have taken prudent and decisive action solely to that end," said chairman Sir Richard Broadbent.

"The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position," he added.

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