Co-op back in black after it ditches bank
THE Co-operative Group’s boss shrugged off the chaos afflicting Britain’s high streets as the mutual announced it had returned to the black after selling its stake in the troubled Co-operative Bank.
The company, which runs food shops and funeral parlours, as well as offering insurance and legal services, made a pre-tax profit of £72m in the year to Jan 6, up from a £132m loss the year before.
Steve Murrells, chief executive, admitted the high street was in “crisis” but said the Co-op’s food business had benefited from its decision to close large shops to focus on convenience stores “just around the corner in people’s local areas”.
It also sold 298 very small shops to rival Mccoll’s, which left its annual food revenues flat at £7bn, despite a 3.4pc rise in sales from the remaining stores. The chain plans to open another 100 shops this year, taking its total beyond 2,600.
The previous year’s loss came after a £140m write-down of the group’s stake in its eponymous bank, which it has since sold. The troubled lender was bailed out by US hedge funds four years ago after it discovered a £1.5bn hole in its balance sheet. A second rescue deal last year saw the Co-op shed the last of its holding. Group revenues were flat at £9.5bn and the company said it had saved £16m by cutting back office costs.
Turnover in the Co-op’s insurance business, its second largest division, officially fell 25pc because of a new reinsurance contract that forced it to change the way it accounts for revenues, but gross written premiums were up 3pc at £496m.
The Co-op also announced plans to sponsor 28 academy schools in the next three years in addition to the 12 it already has. It hopes to hire 250-300 workers from the schools by 2022, but Mr Murrells said the move was based on its aim to “do good in society” rather than for business reasons.
He added: “We are able to bring Co-op values and principles to these academies, we are able to bring work experience and a number of Co-op employees sit on every governing board. That allows us to take these failed schools and turn them around.”