Bob Robbins, head of Tesco’s UK stores, sold 50,000 shares days before profits warning wiped £5bn off retailer’s value
guardian.co.uk, Friday 13 January 2012 19.00 GMT
The head of Tesco’s UK stores sold more than £200,000 worth of shares just a week before a profits warning wiped £5bn off the value of Britain’s biggest retailer.
Noel “Bob” Robbins, Tesco’s UK chief operating officer, sold 50,000 shares at 404.5p on 4 January, a week before the company revealed its worst British Christmas sales in decades, triggering a 16% drop in its share price.
Selling the shares last week allowed Robbins to pocket £47,450 more than if he had sold them at the 316.8p they closed at on Friday afternoon.
The share sale, which was approved by Tesco’s chief executive, Philip Clarke, took place three days ahead of a “close period” preventing executives from selling shares before a key trading update.
On Thursday, Clarke said the supermarket’s disastrous festive sales in the UK had led to a lot of “soul searching” at the company’s Hertfordshire headquarters, which raises questions about how much Robbins knew about Christmas trading before he sold his shares.
A Tesco spokesman said Robbins “was not in possession of any price-sensitive information at the time the sale was approved”. However Tesco confirmed that he has immediate access to daily sales data, and a source confirmed that Robbins would have been involved in the “soul-searching” discussions with Clarke and other leading executives.
On Thursday Clarke announced plans for a radical shake-up of the UK business – which accounts for two-thirds of Tesco’s profits – spending hundreds of millions of pounds cutting prices and refurbishing stores, and starting a radical scaling back of what was once seemingly endless expansion.
The Financial Services Authority (FSA), the City regulator, said it regularly warns management against selling shares when they have access to inside information. An FSA spokesman said there were no hard-and-fast rules banning executives from selling shares in advance of a trading update, but that executives were banned from selling shares 60 days before full-year results and 30 days before quarterly results. The regulator declined to comment specifically on Robbins.
Two weeks before Robbins’s share sale, Ken Towle, the director of Tesco’s internet operations, sold £154,000 worth of shares. In total, five Tesco executives have sold £2.7m worth of shares since October last year.
Market data has shown Tesco steadily falling behind its rivals in the UK and analysts have said a shake-up is required in Tesco’s British business.
Andrew Higginson, Tesco’s chief executive of retail services, sold £1.4m worth of shares at 403.4p in November, while Laurie McIlwee, finance director, and Tim Mason, head of Tesco’s US subsidiary Fresh & Easy, sold £540,000 and £460,000 worth, respectively, in October.
Tesco said: “Bob Robbins sold less than 5% of his substantial shareholding in Tesco for necessary family expenditure. The sale, which was not made within a close period, was approved in the usual way.
“We are confident that Bob was not in possession of any price-sensitive information at the time that the sale was approved. Tesco did not complete its Christmas trading period until after the sale was made.
“In fact, the significant movement in the share price on Thursday was, we believe, primarily due to the announcement on profit guidance and UK investment plans for 2012/13. Bob was not party to discussions around the profit guidance or the investment plans at the time he made his sale.