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
Sport
sportWWE latest including Sting vs Triple H, Brock Lesnar vs Roman Reigns and The Undertaker vs Bray Wyatt
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing