Co-op falls into the red after stock market hit

The Co-operative Group has slumped into loss after a £285m write-down in the stock market value of investments held by its CIS insurance business. The Co-op's operating profits of £231m were wiped out by the charges, pushing the group into a loss of £88m for the year to 11 January.

It is the first time the Co-op has consolidated the CIS performance into its group figures. Martin Beaumont, the new chief executive said: "It's sod's law that this would happen this year, but these things even out over time."

The charges overshadowed improved underlying figures at the Co-op though Mr Beaumont hinted at a radical shake-up as part of a strategic review that will be completed this year.

The group makes most of its profit from the Co-op convenience stores, the Co-op Bank, the insurance operations and its funeral business. But a long list of enterprises including dairies, farming, car dealerships, shoes and corporate uniforms make little or no profit.

Mr Beaumont said: "We are undertaking a comprehensive review of why we are in certain businesses and how they fit. It would be reasonable to assume there would be some changes, not just coming out of certain businesses but going into some as well."

Underlying profits were up from £166m to £231m. The Co-op bank contributed £122.5m and the insurance operation £27.5m. Food retail profits jumped 52 per cent to £69.5m helped by store refits and the £133m acquisition of Alldays.