£2.5bn Co-op loss in ‘disastrous’ year
THE Co-operative Group has confirmed a £2.5bn annual loss after its “worst year” in a 150-year history.
The mutual, which has interests in banking, food, pharmacies and funerals, has been rocked by the failed takeover of 600 Lloyds branches, massive banking losses, senior resignations and a scandal involving a former executive.
It said it had been hit by “significant” losses at the Co-op Bank, the writing-off of much of the group’s stake in the bank, an impairment associated with its 2009 acquisition of the Somerfield supermarket chain, and reduced sales in its food business.
It made a statutory loss of £2.3bn, up from a loss of £557m last year, but this figure rose to £2.5bn after taking into account several other charges associated with pensions and disposals.
Interim chief executive Richard Pennycook said: “2013 was a disastrous year for The Co-operative Group, the worst in our 150-year history. Today’s results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.
“These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are.”
In the year to January overall sales slipped from £11bn to £10.5bn, while underlying operating profits were down from £297m to £210m.
Like-for-like food sales were down 0.2% and profits were down, reflecting store disposals. Revenues at the funeral arm rose 3.3% to £370m, pharmacy sales slipped 0.5% to £760m, and general insurance sales were down 18% to £476m.
Net debt which was £600m five years ago stands at £1.4bn, although it is down from £1.68bn following the disposal of some property assets and the motor dealerships.
The group said it was continuing to explore the disposal of the pharmacies and its farms. Since the year end the various businesses have traded “consistently with management expectations”.