Asda forced to share unaudited results with investors after signing delay

EY has resigned as Asda's auditor as one of its former partners became romantically involved with billionaire chief executive Mohsin Issa. Photo: Jamie Lorriman

Asda was forced to share preliminary results with investors after its auditor failed to sign off on the company's accounts, The Telegraph reports.

The supermarket's management made the unusual decision late to hold a private presentation to creditors. last month, during which Asda reported unaudited profits of £248 million on revenue of £25.6 billion for 2023.

Despite posting a profit of £441 million in 2022 after a loss of £112 million, finance costs fell by £441 million. of the retailer's £4.2 billion debts.

The decision to delay the publication of Asda's results comes after EY resigned as the company's auditor in July last year after one of its former partners became romantically involved with billionaire boss Mohsin Issa.

The Big Four accountant was subsequently replaced by KPMG, although Asda did not provide public information about the changes at the time.

A source close to Asda said investors receive updates every quarter.

It is understood Asda's release of data is not public. is expected before the end of this month, having previously been expected to be released in March.

The delay represents another headache for the billionaire Issa brothers and private equity firm TDR Capital, who co-own Asda.

Asda has since been burdened by rising financial costs caused by high debt levels. Issa and TDR bought the business for £6.8 billion in 2021.

The document, seen by The Telegraph, shows financial costs remain an issue for the supermarket as they ultimately jumped from 101 million pounds to 157 million pounds. quarter 2023.

The financial difficulties coincide with growing concerns about Asda's trading performance as the supermarket has lost customers to rivals in recent years.

The supermarket now accounts for just 13.8% of the grocery market, down from 14.8%. at the beginning of 2021. According to Kantar. In contrast, Tesco has 27.2% of the market and Sainsbury's 15.2%.

Asda sales rose just 0.8% in the 12 weeks to March 23 compared with a year earlier, according to data from the analytics firm. NIQ, which showed that the supermarket lags behind all major competitors.

Leading retail store. The analyst said: «When they are still lagging behind their competitors in terms of sales, the question has to be asked: 'How long will this continue?'

The decline in sales has raised concerns among senior business executives. , leading to speculation about Mohsin Issa's role in running the company.

Its management has made significant cost cuts over the past 18 months, such as reducing the working hours of tens of thousands of employees in an attempt to reduce the wage bill.

This has sparked discontent among workers, which has been exacerbated by questions about the company's ownership.

In February, The Telegraph reported that Zuber Issa was trying to sell his 22.5% stake in the business, following claims of a rift between him and by his brother Mohsin.

The pair have denied claims of disagreement.

Most recently, the company was rocked by an IT glitch that resulted in thousands of staff receiving incorrect payslips.

p>A spokesperson for Asda said: “We have made significant progress in executing our strategy in 2023, making significant investments in the business to deliver long-term sustainable growth, while continuing to deleverage and repay debt.”

Source closed. Asda said: “We are fully on track with this year’s audit, which will be consistent with the final accounts we submitted at the end of April – in both 2023 and 2022. When we sent our results to the media last year in March, they were not verified.”