Major turnaround at the Co-op with profits up by 25%

The Co-op saw a major turnaround in its fortunes over the last 12 months and has managed to turn a £132m loss into profits of £72m.

The Manchester based organisation has endured a torrid couple of years due to the challenges of the retail sector and problems with its banking arm.

The losses the previous year were largely due to a write-down on the Co-Op Bank but this year’s final results make encouraging reading.

And the recovery plans put in place are starting to bear fruit which is reflected in the fact members will share £61 million in personal rewards.

The Co-op has also announced a £50m investment to reduce prices in stores and plans for 100 new convenience store openings.

Profit before tax stood at £72m while underlying profits before tax were £65m, an increase of 25 per cent on the previous 12 months.

Operating profit was £126m while revenues remained stable at £9.5bn.

Debt has also been reduced to £775m compared to £885m the previous year.

Steve Murrells, chief executive of the Co-op, was delighted with the results.

He said: “Today’s results show how much progress we have made. All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.

“The success we are enjoying shows that the Co-op’s difference really resonates today – a different ownership model and a different approach to business, based on returning profits to our members and their communities.

“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future.

“Whether it’s in our existing business areas or through new ventures, we want to make the Co-op ever more competitive, relevant and innovative. That is why we are launching the Stronger Co-op, Stronger Communities plan.

“To really succeed as a Co-op we need to be even more successful commercially and our community efforts need to be concentrated on the things that matter to people. We are going to deliver more Co-op products and services to more people throughout the country and that is what will really allow us to spread our difference.

“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.”

Allan Leighton, independent non-executive chair of the Co-op, added: “With profits up 25%, debt down and membership up by more than 1.2 million since we launched our new scheme, we are stronger than ever before and ready to create a new, modern Co-op that is fit for the future.

“As we do that, we will remain true to our social purpose and continue to make the right decisions and campaign on the big issues where business really should have a voice.

“It is vital that our Co-op continues to innovate and be relevant to meet the changing needs of our stakeholders. The plans we have in place to do this are rightly challenging. We have much to do, but we are confident in our ability to deliver our ambition and create an even stronger Co-op.”