Scotmid Co-op’s interim results see operating profit rise more than 50%

The society welcomed a steady performance in its report for the half year to 29 July against a 'background of unprecedented uncertainty'

Scotmid Co-operative says it managed a steady performance in the first half of 2017, with operating profit up 54% to £2,445,000 (30 July 216: £1,590,000).

Trading profit saw a slight rise to £1,984,000 (30 July 2016: £1,977,000), despite a small drop in turnover to £184.7m (30 July 2016: £185.5m), the society’s interim report revealed.

Chief executive John Brodie said: “Scotmid delivered another solid half-year performance against the background of continued uncertainty and cost pressures.”

He added: “The result was achieved in a period when the Society had to absorb significant additional costs including the Scottish rating revaluation, apprenticeship levy, increased costs of imported goods and the ongoing impact of the National Living Wage.

“I expect the second half of 2017 to be equally or even more challenging with increased cost growth from external factors and the continued market uncertainty over the Brexit outcome.

“Consequently we will continue to focus on innovation and our ‘make it simple’ programme in order to overcome these challenges and invest for long-term sustainable growth.”

Scotmid chief executive John Brodie

Scotmid’s balance sheet strengthened further with the asset base growing by £1.4m to £92.9m, the report said.

The Society’s surplus before tax at the half-year was £1.4m, £1m up on 2016 and this improvement was largely due to the profit crystallised from the sale of a central Edinburgh investment property.

The report said: “The society’s food convenience business delivered a solid performance with turnover growth driven by the continued rollout of food-to-go and efficiency enhancements from our ‘make it simple’ programme.

“Our Semichem stores delivered a sales performance ahead of the non-food market in Scotland, but the bottom line result was impacted by supplier price increases.

“Scotmid Property had a very successful six months delivering a strong half-year result and making significant progress on the portfolio diversification strategy. The sale of a major retail commercial property (Morningside Road, Edinburgh) has been completed and the programme of reinvestment of the proceeds in quality industrial and residential assets is well advanced.

“The Funeral business had more mixed results with good growth in pre-need funeral bond sales but a reduction in the number of funerals conducted.”

During the period, the society invested in the development of its food-to-go offer, store refits and its Post Office transformation programme, and an energy efficiency drive continued with new ceiling lights, LED signage and fridge lights installed across the estate.

Regarding its membership offer, Scotmid has appointed a new membership officer for the Lakes & Dales to develop the area; worked on cleansing its database; and established its new community engagement initiative, Community Connect, which was trialled in the North region.

The regional committees continue to provide support to local communities via the Community Grant funds with 579 groups supported this year.

The society’s members, colleagues and customers raised £345,000 during the year for their charity of the year, Childline. The money raised will help fund 86,250 contacts from young people.

The Samaritans has been announced as the society’s new charity of the year, with a broad range of activities planned.

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