The Co-operative Group reports pretax loss of £9 million after a difficult year
The Co-operative Group has reported a pretax loss of £9 million for the last 26 weeks of this financial year, compared to a pretax profit of £110 million at this point in 2013.
The group has had a difficult year addressing its net debt, which reached £1.4 billion at the end of the last financial year and currently remains at the same rate.
The group has also announced the appointment of Richard Pennycook as chief executive. Pennycook has been managing the group since Euan Sutherland’s sudden departure in March.
Despite investing in £74 million in its food arm, with the refurbishment and opening of new stores, the group witnessed a decrease of 8.2% to £107.4 million in operating profits for the group’s food business.
This decrease was in line with expectation for the group and driven principally by the disposal of non-core stores as well as investment in price reductions, service, product innovation and the focus on refurbishing and opening new stores.
The group’s funeral service FuneralCare has also witnessed a fall in underlying operating profit, down 15.5% to £34.6 million.
The group have agreed the sale of the Pharmacy business to Bestway for £620 million and the Farms business to the Wellcome Trust for £249 million.
Richard Pennycook, Group Chief Executive of The Co-operative Group, said: “2014 has marked a defining period for The Co-operative Group. We have delivered the changes we set out including fundamentally reforming our governance and we are developing clear plans to drive our success for the future.
“We took the tough decisions to re-shape our Group to ensure it is on a sustainable footing and the disposals of our Pharmacy, Farms and Sunwin Services businesses as part of this will repair our balance sheet. Our Group strategy is to build on our existing strengths as a convenience food retailer and to optimise the performance of our new Consumer Services Division, comprising of Funeralcare, General Insurance and Legal Services. We are now in a position to rebuild and restore the Group and can look to the future with greater confidence.”
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