Revenues rise by 14% at Co-op thanks to £137.5m acquisition

Revenues at the Co-op group rose by 14% to £10.2bn, according to the firm’s annual report.

The increase was largely driven by the £137.5m acquisition of Scunthorpe based Nisa just under 12 months ago.

The Co-op, which is based in Manchester, said like-for-like revenues continued to grow in food (+4.4%) and the Co-op has now seen five consecutive years of like-for-like revenue growth.

Profit before tax from continuing operations was up 27% to £93m but underlying profit before tax remained flat at £43m.

Capital expenditure of £414m which included £326m within the food business which was invested in new stores, refits and new infrastructure.

Net debt rose due to the Nisa acquisition, but remained below the £900m debt ceiling target.

The Co-op saw its fastest growth in seven years in its food division.

Like-for-like sales were up 4.4% and £75m was invested in opening more than 100 new food stores and refitting 138 existing stores. The expansion created 1,600 new jobs.

The acquisition of Nisa and expansion of the wholesaling business has significantly grown footprint and capacity.

The planned sale of our insurance underwriting business for £185m will allow the focus to shift.

The sales and profit figures for the insurance business are not included in the profit before Tax line, but within discontinued items.

The loss of £230m includes the write-down of net assets but does not reflect the anticipated value to be generated from the 13 year distribution agreement included within the sale proceeds.

Steve Murrells, chief executive of the Co-op, said: “Over the past year we have continued to successfully transform the Co-op, leading to a 14% increase in revenues to £10.2bn and the return of £60m directly to our members and £19m to over 4,000 community projects across the UK.

“The acquisition and integration of the Nisa wholesale business has been a game changer in expanding our food footprint and we have also set out the path by which we can offer our members a broader range of compelling Co-op solutions in Insurance and Health.

“We continue to demonstrate that the Co-op is a good business that does good for society as we lead on issues including single use plastics, funeral affordability and social housing.

“It is this determination to make a positive difference for all of our stakeholders which will ensure that we fulfil our ambition to build a Stronger Co-op and Stronger Communities.”