Tesco parachutes in new finance director immediately to tackle profits crisis

Alan Stewart resigned from the department store retailer in July but the terms of departure meant he was not due to start at Tesco until December 1. However, with Tesco in crisis following Monday’s revelations of an accounting error which inflated profits by £250m, the two parties agreed a deal for Mr Stewart to join the supermarket’s board from yesterday.

Tesco has been without a finance chief since Laurie McIlwee officially left the business earlier this month. The supermarket’s new chief executive, Dave Lewis, only started in the job at the beginning of September.

Mr Stewart began his career in investment banking with HSBC before joining Thomas Cook, where he was appointed UK chief executive in 2001. He also worked for WH Smith prior to his move to Marks & Spencer in 2010.

Tesco has suspended four executives in its UK business while it investigates the over-statement of profits. The inquiry will look into the way it treated rebates paid by suppliers and whether they were reported in the right time period.

Mr Stewart is expected to immediately start preparing Tesco’s interim results, the date of which was pushed back on Monday from October 1 to October 23.

Analysts are bracing for further write-offs and negative news on that date.

“Shareholders should certainly brace themselves for a lot of kitchen sinking,” said independent retail analyst Nick Bubb – referring to the practice of companies in trouble of publishing any further bad news to investors in one go. Bernstein Research analyst Bruno Monteyne said new adviser Deloitte and legal adviser Freshfields, brought in by Lewis to investigate the profit overstatement, could find other issues or the same ones in other countries.

“We expect that this isn’t the end of the bad news,” he said.