MAY 2018

NEWS
ANNUAL RESULTS
Co-op Group
back in the black
The Co-op Group’s annual results see
it back in the black, as it announces
a new plan for ‘Stronger Co-op,
Stronger Communities’.
Published on Friday, 6 April, the results
show a profit before tax of £72m for 2017
(2016: loss £132m), and an operating profit
of £126m (2016: £148m). Stripping out
one-off items, the underlying profit before
tax was up 25% to £65m (2016: £52m).
Since its rebrand and the relaunch of its
membership offer in 2016, the Group has
seen 1.2 million new members join up, and
its active membership increase by 15% to
4.6 million. Through the ‘5 and 1’ scheme,
Group members received £61m in personal
rewards in 2017, with £13m earned
for over 8,000 community projects.
“Today’s results show how much
progress we have made,” said 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.”
Overall, revenues remained stable
at £9.5bn (2016: £9.5bn) and debt was
reduced to £775m (2016: £885m). Food
core convenience like-for-like sales were
both up (3.4% and 4.3% respectively),
with wholesale sales to independent
societies up 7% to £1.7bn. Funeral and Life
Planning revenues were up 4% to £343m
and Insurance gross written premiums
were up 3% at £496m.
Mr Murrells believes the organisation’s
success “shows that the Co-op’s difference
really resonates today”.
“We’re delighted with our performance,
but we’re hungry for more and ready
to create the Co-op of the future,” he
said. “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.”
He added: “It’s widely recognised that
making communities stronger and more
resilient is an urgent priority for the
UK. Our member-owned business, our
p CEO Steve Murrells says the results show “great progress”
heritage, and community presence makes
us uniquely placed to play a significant
role in that work. Making this happen will
be the outcome of our plans.”
Stronger Co-op, Stronger Communities
aims to “create the Co-op of the future”,
driving growth “by creating a more
commercial Co-op and sharing the greater
value created with members and their
communities”.
The Group highlighted that the plan
would focus on: greater interconnection
between business areas; serving
customers and members; convenience and
relevance; and ventures in new markets
with an “agile, capital-light, digital-first
approach to disrupting markets”.
In support of the plan, the Group
says it has already begun a number of
initiatives in 2018, including a £50m
investment to reduce prices announced in
January 2018, expansion of convenience
store estate, and working with
independent retailers to grow their
businesses through the provision of
Co-op own-brand products.
In Funeral & Life Planning, the Co-op
will continue to hold funeral prices and
help tackle funeral affordability.
A new “Co-op ventures programme”
has been created, which is looking at
initiatives in health and money.
With significant investment being
made in the Stronger Co-op, Stronger
Communities plan, the Group says it is
not expecting any surplus profits being
available for distribution during 2018.
Allan Leighton, independent nonexecutive
chair of the Group, said: “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.”
Mr Leighton also acknowledges the
news that the Groceries Code Adjudicator
is investigating some of the Group’s
practices related to suppliers.
“We need to live our values in our dealings
with suppliers and we know we’ve fallen
short,” he says. “We’ve already been taking
action and have a dedicated team making
sure we have great supplier relationships.
This area has great focus from our board
and we’ll make sure you can be proud of
our practices in the future.”
MAY 2018 | 5