Co-op’s back in black and going for growth
THE Co-op group is targeting health and money markets in a new expansion drive after moving back into profit having cut its ties with troubled lender the Co-operative Bank.
The mutual giant, whose businesses range from food retail and insurance to funerals, is also spending £3.6million to increase the number of academy schools it sponsors from 12 to 40 in the next three years.
It has been rebuilding since the disastrous mismanagement of its banking business plunged the group £2.5billion into the red four years ago. It sold its last remaining stake in the bank last year.
It posted an annual pre-tax profit of £72million after a £132million loss last time when it wrote off its stake in the bank. Revenue was flat at £9.5billion.
Chief executive Steve Murrells said it would be trialling initiatives in the health and money markets in the next few months.
He said: “We have a growth plan for the first time for some while. As well as really fast tracking core areas we will do some venture work in health and money.
“We don’t own a bank and have no ambition to go back to high street banking, but financial markets and health we can go into in a capital light way.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future. We have recovered our campaigning mojo. We must become more and more successful as a commercial entity, but then we can choose to put that success into social programmes and activities because it is in the Co-op’s DNA, values and principles.”
The Co-op’s food retail business, which has 2,532 shops and has enjoyed four consecutive years of like-for-like sales growth, posted profit of £182million on sales of just over £7billion.
It will open 100 new stores this year and is also looking at more wholesale deals having struck an agreement to supply 2,200 convenience stores across the Costcutter network.
Funeral profit was down £35million to £66million following the sale of its crematoria, while underlying insurance profit was flat at £11million.