Tesco Plc revealed in an official statement today that it appointed Mr. Richard Cousins and Mr. Mikael Ohlsson as new members of its board. The transition is to take effect on November 1st. The step is considered part of the companys strategy to strengthen its board at a time when it is dealing with investigations of an accounting error.
Tescos Chairman Richard Broadbent said in the companys statement, cited by Bloomberg, that the new board members “have been updated on and are wholly supportive of the steps being taken by the new management team to rebuild trust in Tesco”.
Richard Cousins has an experience as Chief Executive Officer of Compass Group Plc for eight years, and Mr. Mikael Ohlsson, has been heading IKEA for four years and is also a non-executive of Volvo Car Corporation, Ikano S.A. and Lindengruppen.
The new appointments come only days after September 22nd, when Tesco revealed it had suspended four of its senior executives during the investigation of £250-million ($405.7-million) overstatement of its profit forecast for the first six months of the fiscal year.
The U.K.-based grocery chain has also faced strong criticism, because its board has been considered to be lacking retail experience. The appointments of Mr. Cousins and Mr. Ohlsson are expected to add the proper skills it takes to restore the company from sliding market share and problems related to profit forecast overstatement.
As reported by Bloomberg, an analyst working at Shore Capital, Mr. Clive Black, wrote in a note: “Both gentlemen are expert in their field, highly regarded by investors and bring much needed international consumer market experience to the fold for the struggling supermarket group. or Tesco such appointments are particularly significant given the near comical series of events that has materially tarnished the reputation of the company and served to materially de-rate the group’s stock.”
Tesco Plc added 1.99% to trade at GBX 175.58 per share today, marking a one year drop of 51.43%. The company is valued at £13.98 billion. According to the Financial Times, the 18 analysts offering 12 month price targets for Tesco Plc have a median target of GBX 202.50, with a high estimate of GBX 325.00 and a low estimate of GBX 165.00. The median estimate represents a 17.63% increase from the last price of GBX 172.15.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
