Scotmid gets lift from weather as profits warm up

But the co-operative retailer reiterates its warning of a challenging backdrop

Co-operative, the Edinburgh-based convenience store retailer, has overcome “significant” cost pressures to deliver a double-digit hike in profits.

The group, which also has funeralcare and property businesses, posted a £2.3 million trading profit for the 26 weeks to 28 July – up 16 per cent on the equivalent period last year.

During the half-year, trading turnover increased by £3m to £184m while Scotmid also highlighted its strong balance sheet with assets of in excess of £100m.

The “positive” results are said to have been driven by strong sales figures from the core food convenience business and were achieved against a backdrop of “significant external cost increases”.

The society, which can trace its roots back to 1859, warned that background trading conditions for its Semichem healthcare and beauty products chain continued to be “challenging”, though the trading result improved at the half-way mark because of action taken to reduce costs.

Scotmid Funerals recorded a strong performance in the period underpinned by a “significant” increase in funeral numbers compared to a “difficult” first half last year and, as a result, the business registered growth.

Meanwhile,thegroup’sproperty business posted another record surplus for the first half driven by improved rental income during the period.

John Brodie, chief executive of Scotmid Co-operative, said: “Scotmid delivered a good half-year performance – even though the society was facing into a challenging landscape of continued uncertainty and ongoing cost pressures.

“These challenges included the trading environment, cost increases, ongoing Brexit uncertainty and the sluggish retail market, but the biggest factor impacting on the society’s results during the first half of the year was extreme weathscotmid er – snow with the Beast from the East followed by the hottest summer for 40 years.

“When the sun came out, our food business took full advantage of people changing their shopping habits and that upturn in our food retail business drove the overall society result for the first half of the year.

“Despite the continuing uncertainty around Brexit, the residential and commercial property markets have remained relatively robust and Scotmid’s property business continues to benefit from the net investment in our property portfolio.”

He added: “The likely return to more normal weather will make the second half of 2018 more challenging. So we will continue to focus on innovation, effective investment and tight control of costs to continue to make progress in this unforgiving retail market.”

In April, the society reported a trading profit of £4.8m for the year to 28 January, down from £5.3m in the prior 12 months. It pointed to an “avalanche” of cost challenges and a troubled economic backdrop.

sreid@scotsman.com