Channel Islands Co-operative has reported a £3.3m (1.96%) increase in turnover for the year ending 8 January 2017 and delivered a 4% dividend to members.
Operating profits have fallen to £7.6m, from £9.2m the previous year. But the society said the 2015 profit had been boosted by an increase of £2.969m in revaluation gains of trading and investment properties.
“Moreover,” its annual report said, “the sale of two investment properties during the year, coupled with the termination of the lease on another, resulted in a reduction in other operating income of £0.113m.
“Taking these factors into account, operating profit from recurring trading activities increased by £1.490m.”
The society’s income was also hit by a £3.352m increase in the deficit of the Defined Benefit Pension Scheme.
Turnover was £192.9m, with improved performance across all the society’s businesses apart from Travel, hit by reduction in currency exchange transactions, and Homemaker, which suffered from online competition, showing a fall in turnover of £0.498m (4.8%).
The report said plans were being implemented to “minimise the overall impact this change in shopping habits will have on the society in the medium and long-term”.
The society’s Food business performed strongly with an overall increase in turnover of £3.788m (2.6%), despite the disruption at St Helier Grand Marché caused by refurbishment works and the closure of the Charing Cross store in St Helier for a major £16m development.
Overall performance was boosted by new stores at La Colomberie, St Helier and a full year of trading at St Sampson En Route, which are performing above expectations.
The society’s Medical Services business increased its turnover by £0.082m (7.7%), and the Pharmacy business improved its turnover by £0.046m (0.5%).
“While the overall result is not as good as the board would wish, your society has continued to perform better than the grocery market generally and has been able to deliver a dividend of 4% once again,” said the report.
“All of the major food retailers in the UK have struggled to maintain profitability, and no major UK co-operative has been able to offer a return to its members’ close to the return offered by your society.”
The society is also donating more than £18,000 to charities, youth clubs and sporting associations in Guernsey and Jersey this year through its Helping Hands fund.
More than 30 organisations have been chosen to receive a share of the fund set up in 1995 to provide financial support to good causes. During its 22-year history, the fund has provided more than £250,000 to help groups in Jersey and Guernsey.
Chief executive Colin Macleod said: “2016 was a year of consolidation on the one hand and preparing the business for delivering our new member-endorsed vision on the other.”
He said the society bringing its legacy IT systems up to modern standards, reviewing its ways of working and building its community focus. Investments include a custom-built community van, which can be put to a range of uses, from serving refreshments at events to providing health checks and functioning as a mobile store.
“2016 was also a year where we applied considerable effort and investment into integrating our new pharmacy and medical businesses, whilst ensuring we had the right risk frameworks and processes to support our much larger business,” added Mr Macleod.
“Towards the end of the year we were faced with an unprecedented level of supplier demand for price increases following the currency market reaction to the Brexit vote. I am really pleased that we managed to stave off many of these although protecting members from the impacts of these increases has come at the expense of net profitability.
“That said, our focus on the foundations of the business and making conscious choices to invest in our future, whilst protecting member benefit, will stand us in good stead.”