FOR IMMEDIATE RELEASE
TESCO 20-YEAR VALUE PERFORMANCE SHOWS COMPANY’S NON-UK ACTIVITIES ACHIEVED ECONOMIC LOSSES OF £6.1bn
London – 29th November 2016. vysyble today announces the publication of ‘Tesco plc – A Contrarian Shareholder Value Perspective’. This is an examination of the financial and economic performance of the company from 1995 onwards with a focus on value creation and the achievement of economic profit.
The 24-page report assesses the company’s performance against its own strategic objectives and direction. Central to this enquiry is the metric, economic profit – a measure which combines information from the profit and loss account and the balance sheet and therefore considers all the costs of doing business. It is a metric which has been used by some of the world’s truly great value creators – for example; Coca-Cola under Roberto Goizueta, Gillette under the leadership of Jim Kilts and Lloyds Bank when the great Brian Pitman was at the helm. This measure provides a true reflection in the creation or destruction of value within club balance sheets.
Roger Bell, author of the report, commented: ‘Retail and the media is fixated by like-for-like sales which is a misleading measure. The transparency afforded by calculating economic profit and thus value creation gives rise to a clear perspective in terms of what has been a turbulent period in Tesco’s fortunes. From our calculations, Tesco has destroyed £6.4bn during the period of analysis from non-UK operations, which demonstrates that international expansion has been a highly challenging pursuit in terms of strategic and economic value.’
The report also investigates the company’s management performance against value-based criteria such as total shareholder return together with a detailed analysis of the company’s economic performance against the company’s own strategic objectives.
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