Co-op profits climb thanks to World Cup and Nisa deal
PROFITS at the Co-operative Group have nearly doubled thanks to strong food sales and a boost from its £143m takeover of Nisa.
The supermarket-to-funerals business recorded an 85pc jump in its firsthalf pre-tax profits to £26m, as sales climbed 10pc to £5bn. The World Cup and hot weather helped the food business continue its winning streak.
The Co-operative also managed to avoid problems caused by the carbondioxide shortage over the summer, which affected other supermarkets’ supply chains. Like-for-like sales in the food business, which exclude store openings and closures, grew for the 18th consecutive quarter at 4.4pc in the six months to July 7.
It came as the Co-operative announced the acquisition of healthcare technology start-up Dimec, which allows patients to use an app to see their health records, make GP appointments and order prescriptions.
The Co-op’s chairman Allan Leighton said that the group’s growth comes despite a tough trading environment and uncertainty surrounding Brexit.
He said: “Against a backdrop of increasing national uncertainty, I’m pleased that the Co-op has continued to perform successfully during the first half of the year.
“It is in these times of volatility that our way of doing business, which gives back to our members and the communities we operate in, becomes even more important.”
Nisa, the corner-shop chain and wholesaler, struck a deal with the Coop after talks with supermarket giant Sainsbury’s fell flat.
Co-op’s wholesale business booked sales of £269m following the Nisa acquisition, but sank to a £5m loss due to the cost of the deal.
By the end of this year, the Co-op will supply 850 of its own-branded product lines to Nisa partners.
The Co-op’s funeral business performed well in the period, with sales up 5pc to £174m, thanks in part to a higher death rate in the first quarter.
Revenues at its insurance business, however, slipped by 2pc to £160m, as increased competition in the motor insurance market took its toll. Underlying losses widened from £1m in the first half of 2017 to £4m as the bad weather at the start of the year also weighed on the division.