Co-Operative Group on track for recovery with half-year profits

The Co-Operative Group is on track for financial recovery, according to the latest figures from the Manchester-headquartered business.

In the half-year period ending July 4, the company saw pre-tax profits rise to £64m from a loss of £1m in 2014, while its net debt fell to £0.6bn, down from £1.4bn last year.

Meanwhile, capital expenditure rose from £97m in 2014 to £144m at the beginning of July, as the group invested in 10 new funeral homes and 35 new convenience stores.

Commenting on the results, the Co-Operative Group’s chief executive, Richard Pennycook, said: “We’ve made a good start on the three-year journey to Rebuild The Co-operative Group.

“These early days are about fixing the basics - putting in place new leadership teams and providing the investment to deliver the strategies for our businesses.”

He added: “Our customers and members are beginning to see the difference.”

The Co-Operative’s growth was driven by the performances of its Food and Funeralcare segments. The group’s convenience stores collectively saw like-for-like sales increase by 3.3%, while overall underlying profits in its Food arm rose to £120.4m, an increase of 21%. During the half-year period, the Co-Operative announced the recruitment of 1,000 new members of staff.

The group’s Funeralcare segment saw a productive start to the year, its busiest since 2008. Sales rose by 16% to bring the underlying Funeralcare profit to £51.8m.

Elsewhere, Co-Operative Group’s General Insurance and Legal Services arms reported small underlying profits of £0.5m and £0.2m respectively, while Electrical made a net loss of £0.9m.

The Co-Operative Group’s independent non-executive chair, Allan Leighton, said: “The commercial improvements we’ve made in the first half of 2015 have gone hand in hand with the further strengthening of our Board, Council and senior management teams.

“Our members are now represented through a highly experienced Board who are already providing sage guidance, and through the Members’ Council, which has a new leadership team.”

Allan continued: “I look forward to working with them as we revitalise the engagement of our broad membership in our business and community activities.”