One of the largest independent co-operative societies in the UK, Central England Co-operative, has reported that profits have increased in spite of tough market conditions.
The society runs food stores, funeral services, petrol stations and property investment along with trading interest in travel shops, coffin manufacture and optical services. Central England boosted its profits by 5% to £19.8m, compared with £18.8m in 2014/2015.
Profit before tax was £8.8m, up £3.4m from the previous year, which included a dividend of £4.7m related to the society’s investment in Thomas Cook Co-operative Travel Limited. The Co-operative Travel runs as a joint venture between the Thomas Cook Group, the Co-operative Group and Central England Co-operative.
The society’s annual results, which cover the period to 23 January 2016, also show total gross sales (excluding VAT) of £844.7m – 3.0% lower than in the previous year – attributed to difficult market conditions.
As part of its growth strategy, the society invested £29.5m in ten new food stores, four new funeral homes and refurbishment across the business.
Stakeholder groups of members, employees and communities received a £4.7m pay out, a similar figure to last year’s payments, which totalled £4.9m. The society also saw a strong performance from food retail, which accounts for the largest proportion of its business, with increasing sales in convenience stores.
Trading conditions in the retail sector continue to be challenging with food and fuel price deflation having a major impact
The annual report also highlights that net debt reduced to £8.4m (£21.3m 2014/15), driven by strong cash generation, good cost control, lower capital investment and planned property disposals.
The society’s president, Maria Lee, said: “Our strategy remains focused on optimising the society’s point of difference as a strong, member-owned, member-controlled, co-operative business.” She said that strengthening links with members and local communities was at the heart of the society’s strategy, supported by the co-op’s membership and Community Councils initially set up in 2014. Another change announced last year saw more than 6,000 front line store colleagues receive an 8.5% pay increase over two years.
Chief executive Martyn Cheatle also commented: “Trading conditions in the retail sector continue to be challenging with food and fuel price deflation having a major impact. Against this backdrop, the society has delivered a solid business performance, and reduced its liabilities, building an even firmer foundation for its continued growth strategy.
“As one of the largest independent co-operatives in the UK, our society has continued to make major investment in its ethical point of difference and it is pleasing to see such a wide range of these activities receiving recognition during the year. Although pressures on the retail sector will continue in the coming years, we are confident that our clear business strategy will ensure our continued success, both financially and ethically.”
Last year the society also launched the My Co-op Community website, promoting the its Community Dividend award scheme.
Additionally, the society reached the £1m fundraising target for its corporate charity partner, Newlife Foundation for Disabled Children.
Last year brought a number of accolades to the co-operative. Central England was a finalist in Business in the Community’s 2015 Responsible Business Awards in the Inspiring Young Talent category for the Society’s SENse to Aspire programme. That same initiative won the Employability Award at research and training charity IGD’s annual awards.
In December 2015, the society obtained the Carbon Trust’s environmental certification, becoming the first retailer worldwide to achieve all four Carbon Trust Standards.
As part of its corporate responsibility strategy, the society has launched a colleague volunteering scheme to enable all employees to participate in up to three volunteering days per year, supporting good causes across the society’s trading area.
Central England Co-operative expects to achieve sales of £958m in 2016/2017.