Co-op on a roll as Nisa deal helps fuel surge in revenues

Annual results show group returned £79m to members and local projects

Co-op has cashed in on its acquisition of the Nisa convenience store network after reporting a double-digit hike in revenues.

Annual results show that the food, funerals and insurance giant saw total revenues leap 14 per cent to £10.2 billion in the 52 weeks to 5 January, driven by the addition of Nisa and a strong performance in the core food business.

Like-for-like food sales rose by a healthy 4.4 per cent, marking the fifth consecutive year of growth.

Profit before tax from continuing operations was up 27 per cent to £93 million, though underlying pre-tax profits were flat at £43m.

The results come in the wake of the Co-operative Group’s acquisition in 2017 of convenience store network Nisa – a deal which formally completed in May of last year and has seen Co-op products appear in Nisa shops.

Steve Murrells, chief executive of the Co-op, said the integration of Nisa had been a “game-changer” which significantly expanded the group’s food footprint.

The Co-op operates some 2,600 food stores, around 1,000 funeral homes and provides products to more than 5,100 other stores.

The group also hailed a year of community initiatives, as it returned £79m to members and local projects.

Murrells said: “Over the past year we have continued to successfully transform the Co-op, leading to a 14 per cent increase in revenues to £10.2bn and the return of £60m directly to our members and £19m to over 4,000 community projects across the UK.

“The acquisition and integration of the Nisa wholesale business has been a game changer in expanding our food footprint and we have also set out the path by which we can offer our members a broader range of compelling Co-op solutions in insurance and health.

“We continue to demonthe strate that the Co-op is a good business that does good for society as we lead on issues including single use plastics, funeral affordability and social housing.”

The funeral division posted a 1 per cent decline in revenue, amid fierce competition in the market. It has been competing with Dignity, the other major player in the sector, by cutting the price of its simple funeral package.

The group also said that its pension fund was “responding to the UK’S social housing crisis”, by looking to pump up to £50m into the social and affordable housing market.

Allan Leighton, non-executive chairman, said: “In these uncertain economic times we have the opportunity to demonstrate that the Co-op way of doing business has never been more relevant than it is today.

“With the continued support of our colleagues, members and communities, I have no doubt that we will thrive in the years ahead. I am confident and excited about the path we are following and the greater social impact we can create for our members and their communities.”

sreid@scotsman.com