Shore Capital welcomes new Tesco chairman as turnaround continues

18th Feb 2015 10:25

The appointment of Dixons Carphone chairman John Allan as the head of Tesco's board has been applauded by analysts at Shore Capital, who said it represented "another job completed in the repair of Tesco".The broker, which kept a 'hold' rating on the supermarket stock, said that Allan "has a distinguished past", previously having run logistics company Exel and recently overseeing a merger between Dixons Retail and Carphone Warehouse."Mr. Allan's turnaround experience may be highly valuable to Tesco and whilst not necessarily the centre of his time, he may have beneficial insights into logistics progress too," ShoreCap said.Investors are likely to welcome Allan's appointment and the "ongoing evolution" of the board under new chief executive Dave Lewis, the broker said."We would expect further evolution of the non-executive elements of the Tesco board in forthcoming weeks and months, and Mr. Allan's appointment brings such necessary change, in our view, closer.""And so with another box ticked off the company's lengthy 'to do' list Tesco continues to make steps forward with its recovery, although how many more baked beans and loaves a new chair will add to the tills is a debating matter."Nevertheless, it said that Allan's appointment was a positive for the company: "We believe that he can contribute to the important job in hand of assembling a credible medium-term strategy and supporting shareholder's interests."While Shore Capital expressed its confidence that Lewis' turnaround plan will engineer better sales and margin recovery, it said: "uncertainties surrounding what and when mean that much of the upside for shareholders from the potential improvement in the company is already arguably factored into the share price to our minds; there is no quick fix to Tesco."The stock was up 0.6% at 245.85p by 11:17 on Wednesday.