Staffordshire-based retail society Tamworth Co-op has announced a trading surplus of £940,000 for the year to 25 January.
The society, which operates a fashion/outlet store, a supermarket, 11 convenience stores, eight funeral service locations and five post offices. Annual turnover exceeds £20m, said the results exceeded expectations. It had budgeted for a small drop in trading surplus but instead the figure rose by 1.5% on the previous year.
The figures included the impact of the National Living Wage and the cost of expensive property repairs, including a new roof over the funeral vehicle garage.
The overall surplus before taxation was £541,000, down £146,000 on the previous year. The report said this was due to a £122,000 dip in the market value of the society’s property assets. In the previous financial period, the value of the portfolio rose by £42,000, so the swing year-on-year totalled £164,000, it adds.
Chief executive Julian Coles said the latest results were “comparatively strong”, bearing in mind factors outside the society’s control.
“In general, the figures for the financial year ending on January 25, 2020 show that the society is in sound financial health,” said Mr Coles.
“The results were ahead of our budget and point to us also having assets totalling £13m. That’s all positive news to report. In addition, the food division recorded an overall increase in trading surplus against the previous year.”
Mr Coles said the rolling programme of improvements to outlying food locations had continued, most recently with a major refit for the Rosliston convenience store.
But the headline development was the new purpose-built Dordon store which is nearing completion on the site of the former Cuckoos Rest pub. This is expected to open in summer, when the society’s existing store in the village will close; the site is designated for a housing development.
Mr Coles said the funeral division remains a “robust part of the society’s operation”, despite carrying out fewer funerals than in the previous financial period – reflecting lower mortality rates over the period.
But town centre trading is more of a concern, warned Mr Coles. “The former department store continued to record losses and there was also a decline in sales at our supermarket in Church Street.”
He also sounded a note of caution in relation to pension fund liability, which rose to £7.5m from £6.6m the previous year.
“This relates to the final salary scheme which closed to future accrual in 2009,” said Mr Coles. “During the year we have paid £375,000 into the scheme, as well as covering the running expenses.”
Property income was slightly down on the previous year from £504,000 to £493,000.
Tamworth Co-op’s Community Dividend Fund, now in its eleventh year, handed out an average payment of £769 to 13 worthy groups, in addition to a £5,000 donation from its Cash in the Bag scheme to Tamworth’s homeless shelter.
The society also embarked on a new initiative to redistribute food that would otherwise have gone to waste through the FareShare charity.
Mr Coles warned that even before the pandemic the board had predicted a lower level of trading profit in the next financial year, with difficult town centre trading conditions and a 6.2% rise in the National Living Wage.
“The world has changed very significantly since the latest financial report was signed off,” he warned. “For a start we have had to temporarily close our fashion store in line with the government’s coronavirus guidelines.”
The food and funeral divisions have already been affected by the pandemic, added Mr Coles. “We are trying to support families with very limited funeral arrangements being possible at this time. It has also been an incredibly difficult period for our highly dedicated and compassionate funeral staff.
“In terms of our food division, food sales have been at much higher than anticipated levels since the end of March, but we have had extra staffing costs. We are now in the process of processing additional reward payments for employees who have been working so incredibly hard at all our locations. I do want to thank all of our staff for the exemplary way that they have responded to the exceptional demands arising from the international pandemic crisis.”
The report adds: “The society entered the pandemic with cash reserves and it is hoped this will enable the operation to weather the storm a little better than many other businesses.”