Co-op profit dive steps up pressure

The Co-operative Wholesale Society will come under renewed pressure today as it reports that pre-tax profits have more than halved. Andrew Regan's Lanica Trust, which is stalking the Co-op, is likely to use the decline in performance to highlight the movement's inefficiencies and press the CWS Board to consider its approach to buy parts of its non-food businesses.

Though Mr Regan has received advice from political quarters not to go ahead with his bid before the general election, others in his camp have counselled that the prospects of a Labour government would not necessarily undermine his attempts. The poor trading figures may therefore act as the spur for Mr Regan to seek a special meeting of CWS members to discuss his proposal. He would need 10 of the 150 regional societies that control the CWS to support his campaign to requisition a special meeting.

John Owen, who stepped down from the Society's executive committee a week ago, said yesterday that though Mr Regan might have the backing of some smaller societies it would be unlikely that his support base was wide enough to pull off a deal. "I think he has very little chance of getting any significant support. There may be some people out there with a chip on their shoulder but I think he is on to a losing situation. We consider this an intrusion and an unwelcome distraction from what we are trying to do."

He added that the 30-plus members of the CWS board represented around 90 per cent of the membership "and they are unanimous in their opposition to the Lanica proposal".

CWS trading results for last year are expected to show a decline in pre- tax profits from pounds 31.4m to just pounds 14m due to falling trading profits and the effect of exceptional items. Trading profits fell from pounds 58.7m to pounds 48.8m.

CWS is also thought to have reported a loss of pounds 5.6m on pulling out of some activities and a further pounds 36m loss on a property venture with P&O called Slough Observatory.

There are also costs associated with redundancy payments. The accounts should also detail the retirement package of David Skinner, the former chief executive, who was paid pounds 388,000 last year.

As the Co-operative Bank which is owned by the CWS, recently announced profits of pounds 45m, the figures will call into question the operating performance of the remaining businesses. Some, such as the funeral parlours, are thought to be trading profitably. This would mean that other parts of the business, most notably the food retailing operation, must be trading at a loss.

Graham Melmoth, who took over as chief executive of the CWS last autumn, is expected to use the publication of the group's figures today to outline his strategy for improving the Society's performance.

This is expected to include plans to reduce central costs as well as improving staff incentives.

Though the Co-op is keen to trim its cost base, it is reluctant to do so at the expense of the CWS's federal role within the movement.

This includes acting as the administrative centre for the other regional societies as well as supporting the Co-operative union, the movement's secretariat in Manchester.

Lanica Trust has estimated the Co-op's cost to be pounds 16m. Andrew Regan would cut pounds 10m from these costs if his bid were successful, as well as offering incentive programmes for workers while pruning middle management jobs.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Digital Marketing Exec / Online Marketing Executive

£35 - 40k: Guru Careers: Our client has a new role for a Digital Marketing Exe...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'