In its half-year report, Central England Co-operative has welcomed an “encouraging financial performance and strong investment” with sales up 2.6% to £460.2m.
The report said trading profit for the half year to 12 August was £11.9m – “well ahead of our budget expectations but £1.0m lower than the prior year, primarily as a result of implementing improved pay rates for our colleagues and other cost increases”.
It added: “Our year-on-year performance also reflects the continued impact of intense competition in the grocery sector and in particular, a significant pressure in our large stores and supermarkets. Importantly, strong cash generation of £24.6m in the first half was in line with the prior year and remains a key driver of our expansion plans.”
The society said its “ambitious growth strategy” is a “strong indication” of its health, with £19.2 million invested in the first half of the year, up from £14.2m in 2016.
“This has seen the core food business and funeral arm of the society grow significantly,” it added, “with further new openings and refurbishments planned for the second half of the year and on into 2018.”
The society also pointed to:
- Strong cash generation of £24.6 million, consistent with the previous year
- £2.6 million distributed to members, colleagues and the community
- Five new food stores and four funeral homes opened and a further 25 refitted as part of a major, on-going refurbishment programme
- Fifty-two groups shared over £100,000 from the Society’s Community Dividend Fund
- £1.5 million fund-raising target raised for Newlife the Charity for Disabled Children and Dementia UK was chosen as new corporate charity partner by colleagues
- Over 1,000 hours of colleague time donated to a wide variety of volunteering projects.
Chief executive Martyn Cheatle said: “We are encouraged by our progress and have a clear strategy in place to respond to the challenges and opportunities ahead.
“With the support of our fantastic colleagues, we remain committed to delivering sustainable growth for the benefit of our members, customers and local communities.
“We expect the trading environment to remain challenging and highly competitive for the foreseeable future, but are remain confident in our strategy and our co-operative point of difference which enables us to provide a relevant and attractive proposition to our members and customers.”
The food retail arm of the business enjoyed a positive performance, with further like-for-like sales growth in its convenience stores and strong trading during key periods such as Valentine’s Day, Mother’s Day and Easter. The society was also encouraged by customer satisfaction showing continued improvement.
The society’s investment programme continued, including the £500k refurbishment of three stores in Wooldale, West Yorkshire, following the transfer of engagement with Wooldale Co-operative Society in July.
Central England said its funeral business “experienced a more challenging period in the first half of the year with arrangement numbers reflecting a decline in the death rate in the second quarter”.
But it said progress had been made with a pre-paid funeral plan offering via tailored marketing campaigns and continued investment in the refurbishment of funeral homes “against a backdrop of a highly competitive marketplace”.
The society said its 19 Travel shops have traded positively in 2017, with the niche holiday sector and tailor-made holidays performing well.
It added: “As a responsible business, Central England Co-operative is proud to have launched a variety of initiatives to benefit communities and the environment. These have included signing a pledge to tackle the stigma of mental health in the workplace and continuing work to reduce its carbon footprint, which has fallen by 35.8% since 2010.”