Co-op group is back in the black as it reveals members got £74m reward in 2017

The group has put previous struggles, including the near-collapse of its banking operation, behind it

Caitlin Morrison@citycait
Friday 06 April 2018 08:35
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The Co-op announced it was opening 100 new UK stores earlier this year
The Co-op announced it was opening 100 new UK stores earlier this year

The Co-operative Group swung back into profit last year, with sales up and debt “significantly reduced”, in a marked turnaround from the past few turbulent years.

Members of the Co-op received a total reward of £74m in 2017, the firm said, comprised of £61m in personal rewards and £13m going towards community projects. Active membership grew by 15 per cent to 4.6 million last year.

The group reported pre-tax profit of £72m for 2017, compared with a loss of £132m the year before. Underlying pre-tax profit was £65m, up 25 per cent on the £52m reported in 2016, while operating profit fell to £126m from £148m.

Revenues were flat at £9.5bn, with like-for-like food sales up 3.4 per cent, and convenience sales up 4.3 per cent.

The Co-op said revenues from its funeral and life planning business rose 4 per cent to £343m, with sales in will writing and probate up 16 per cent. The group has grown its market share in the funeral plan business to 33.2 per cent.

The firm said its debt pile had shrunk to £775m, compared with £885m in 2016.

The Co-op was rocked by the near-collapse of its banking operation in 2013, after a £1bn so-called “black hole” in its finances was revealed to the market. The group was then further damaged by revelations about its chairman, the former minister Paul Flowers, dubbed the “crystal methodist” after he was convicted for drug possession.

However, the Co-op Group sold off the Co-op Bank last year, and embarked on a programme of investment and restructuring, including the announcement of 100 new UK stores to be opened in 2018.

Looking ahead, the Co-op said the food, funeral and life planning and insurance markets all remain highly competitive against a challenging consumer and economic backdrop. As such, the group added, it will “invest further in all its businesses to drive commercial success and value for members and their communities, whilst maintaining a tight control over costs”, and keeping debt within £900m.

“Today’s results show how much progress we have made,” said the Co-op’s chief executive, Steve Murrells.

“All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.

“We know there are challenges ahead, but we are confident that with the support of our colleagues and our members, the strength of our brand and continued investment in our businesses we will achieve our goals.”

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