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Tesco admits to making €300 million mistake in its books. Oops...

Expected profits down for the third time this year as world’s second-biggest retailer looks into the screw-up.

TESCO HAS DOWNGRADED its expected profits after admitting to “an overstatement” in its finances – to the tune of over €300 million.

The UK company, the world’s second-biggest retailer, told investors today there had been some accounting mistakes in its financial forecasts from August and it was anticipating to make about £250 million (€318 million) less than expected for the first half of the year.

It was the company’s third profit warning so far for 2014 after it said late last month that “challenging trading conditions” meant it was expecting to make a lower-than-expected £1.1 billion (€1.4 billion) in profits for the first half of the year.

Tesco’s interim financial results will now be released about three weeks late on 23 October and in the meantime it has ordered an independent review into the error.

“Work is ongoing to establish the extent of these issues and what impact they will have on the full year,” the company said in a statement.

Tesco Twitter / Sunny_Mangat Twitter / Sunny_Mangat / Sunny_Mangat

A serious “issue” (aka screw-up)

Tesco Group chief executive Dave Lewis said the company had “uncovered a serious issue and (we) have responded accordingly”.

“The Chairman and I have acted quickly to establish a comprehensive independent investigation,” he said.

The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”

In August Tesco announced it was expecting to turn a trading profit of £2.4 billion to £2.5 billion for the latest financial year – down from £3.3 billion in 2013/14.

The company has put its flagging performance down to a weaker and more competitive UK market, where it does the biggest share of its business, and a sped-up shift to online shopping.

It has also been spending money as part of its moves into Asia, where it has been expanding its business in South Korea, Malaysia, Thailand and India.

READ: Companies too worried about themselves, not enough about jobless: Tesco boss

READ: Irish people need to stop expecting to pay €5 for a steak, say farmers

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