Recovery will take five years, new chief executive of Co-op Richard Pennycook warns
Friday 05 September 2014
Reviving the beleaguered Co-operative Group after two years of turmoil could take as long as five years, the new chief executive declared yesterday.
The Co-op — whose former boss Euan Sutherland branded the business “ungovernable” — has appointed Richard Pennycook as its new, permanent chief executive, less than five months after it gave up control of its controversial bank, which had a £1.5bn black hole.
The wider group narrowed pre-tax losses to £9m in the half-year to 5 July, vastly improving on last year’s £2.5bn loss.
Mr Pennycook — the interim boss who previously said he had no intention of taking on the job full-time — laid out a five-year plan for the mutual, likening the Co-op to a hospital patient.
He said: “We’re out of the operating theatre and in the recovery room. In time we’ll be on our feet again.”
But he also warned that the mutual is braced for a three-year “rebuild” phase and a further two-year “renewal” phase following a year of scandals and fallouts during which its banking chairman, Paul Flowers, was convicted for possession of cocaine, crystal meth and ketamine.
Debts hit an incredible £1.4bn last year but a series of disposals, including its pharmacy, farming and security businesses in recent months, will cut the debt pile significantly this year.
“Co-op is a reshaped business and the businesses we have are all really well suited to the type of organisation we are,” Mr Pennycook said.
“This is now primarily a convenience retail business and that will be a foundation for our future.”
Last week, the mutual voted through plans by the former City minister Lord Myners to create a new board of governors with outside experience to improve corporate governance. But analysts have questioned whether senior business leaders would be willing to put themselves forward.
Its chairwoman, Ursula Lidbetter, admitted she has yet to be approached by anyone looking to fill posts on the new board, but said the pay would be within the “median” range for non-executives.
Ms Lidbetter added: “We will be a median payer but we clearly realise that excessive pay is a major issue for our members.”
Co-op’s food business managed underlying profits of £107m for the period, down 8.5 per cent compared with a year ago, while profits at its other major business, funerals, also fell by 17 per cent to £35m.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 3 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 4 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
- 5 The Greece debt crisis explained in less than 100 words
Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Man who was struck and killed by lightning in Brecon Beacons 'was carrying a selfie stick'
Greece debt crisis as it happened: EU chiefs at loggerheads hours before Alexis Tsipras’s last ditch deal proposals
Florida teacher sentenced to 22 years in prison for sexually abusing three pupils
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...