Source: Asda

Top story

Big four accountancy firm EY has resigned as auditor to Asda in the latest blow to the Issa brothers, according to reports.

The firm quit in the summer but the supermarket has not yet disclosed the exit in Companies House filings or to MPs during recent questioning of the senior management team by the Business and Trade select committee.

The Telegraph, which first reported the news over the weekend, said Asda notified lenders of its listed bonds about the resignation in August.

EY confirmed to the paper that it had stepped down as auditor.

Nadine Houghton, national officer at the GMB Trade Union, said Asda’s failure to disclose the resignation of its auditors highlighted “once again the complete disregard for the importance of transparency”.

Asda has faced intense public scrutiny since the Issa brothers teamed up with TDR Capital to acquire the supermarket from Walmart for £6.8bn.

MPs have raised concerns about the size of the £4bn debt mountain and the complicated ownership model.

Asda did not comment on The Telegraph article but provided a statement to City AM this morning.

A spokesperson told the newspaper: “In a letter last summer, EY confirmed that they would not be able to undertake the enlarged audit – taking into account the acquisition of the EG UK&I business and the significant increase in scale and complexity of the group within the timetable to issue their audit opinion for the year ended 31 December 2023. We notified investors about this on 8 August 2023.”

Morning update

It’s a quiet morning on the markets for fmcg news.

The FTSE 100 is up 0.3% to 7,656.24pts so far.

Early risers include Greencore, up 1.8% to 104.5p, and Science in Sport, up 1.7% to 15p.

Hilton Food Group has dropped 4.3% to 782p, while McBride is down 2.5% to 69.3p.

This week in the City

Diageo will be keen to avoid disappointing the City again following last year’s surprise profits warning. The drinks giant reports on its first-half performance tomorrow.

Tuesday also brings the latest Kantar grocery market share report, while Pets at Home issues a Q3 trading update and caterer SSP puts out Q1 numbers. Over in the US confectionery giant Mondelez and coffee chain Starbucks report quarterly results.

Meat processor Cranswick reports in its Q3 performance on Thursday, alongside Irn-Bru maker AG Barr, which puts out a pre-close full-year trading update.

Amazon reports Q4 numbers on Thursday evening.