Co-op back into profit after break with bank
£72m GAIN FOLLOWING £132m LOSS IN 2016
THE Co-operative Group swung back into profit last year after it made a clean break from its troubled banking business.
The Manchester-headquartered mutual posted a pre-tax profit of £72m in 2017, compared with a £132m loss the year before when it wrote off the value of its stake in the Co-operative Bank.
Hedge funds now control the lender and it has severed ties with the group.
On an underlying basis, profit before tax rose 25 per cent to £65m off the back of an improving business performance and reductions in the Co-Op’s cost base.
Revenue for the funerals-to-food group were flat at £9.5bn.
Chief executive Steve Murrells said: “Today’s results show how much progress we have made.
“All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.
“The success we are enjoying shows that the Co-op’s difference really resonates today – a different ownership model and a different approach to business, based on returning profits to our members and their communities.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future.”
Like-for-like sales at the Co-Op’s grocery arm rose 3.4pc, while ‘core convenience’ comparable sales were up 4.3pc.
Sales at its food arm were flat at £7.1bn, which the firm said reflected the impact of a strategy to close larger stores.
Operating profit was also broadly flat at £202m.
Funeral and Life Planning revenues increased 4pc to £343m, but operating fell from £71m to £66m after selling its crematoria.
The Co-Op’s insurance unit saw gross written premiums rise 3pc to £496 million but slipped to £331m from £439 million due to a new reinsurance contract.
Membership numbers rose 15pc to 4.6m as chairman Allan Leighton said the firm was ‘stronger than ever before.’
“With profits up 25pc, debt down and membership up by more than 1.2m since we launched our new scheme, we are stronger than ever before and ready to create a new, modern Co-op that is fit for the future,” he said.