THE Co-operative Group has announced a consolidated operating profit before exceptional items of £ 231.4 million on a turnover of £ 7.8 billion ? up £ 2.4 billion from 2001.
Results for the year ended January 11 make it clear that, as the results of the Group's insurance business, CIS, were not consolidated in 2001, Group income on a like-for-like basis was £ 529 million higher, up 7.3 per cent and profits (before exceptional items) rose by 24 per cent.
Profits from trading activities were £ 81.4m, a rise of 40 per cent, and those from the Co-operative Bank and CIS of £ 122.5 million and £ 27.5 million respectively.
The Group's food retailing business continued to outperform the national grocery market, with like-for-like sales up six per cent in convenience stores.
Total food sales rose nine per cent to £ 2.6 billion and profits jumped 52 per cent to £ 69.5 million. The Group says this was helped by store refits and acquisitions; margin improvements resulting from scale growth and a strong marketing campaign for the Group's convenience offer and ethical values.
Last year, the Co-op Group refitted 262 stores, bringing total refits in the last three years to 835. In October, it acquired Alldays for £ 133 million to become UK market leader in convenience retailing with over 1,700 outlets.
"Alldays gave us critical mass in a sector where we perform strongly. We do not intend that to be our last major acquisition in food retailing, though we are prepared to wait for the right opportunity to come along," said Chief Executive Martin Beaumont (above).
Other profit contributions came from the Group's property business, up £ 2.1 million to £ 13.1 million. National Co-operative Chemists also did well, with profits of £ 9.8 million, up £ 3.9 million.
In contrast, Associated Co-operative Creameries (ACC) and the Group's farming operation, Farmcare, were once again hit by the problems besetting their industries. ACC made a loss of £ 0.2 million after £ 0.7 million of rationalisations, while Farmcare reduced its losses by £ 0.9 million to £ 2.0 million.
The Group's funeral business stabilised its market share at 14.4 per cent, though profits were down by £ 3.1 million to £ 12.7 million due to the falling death rate.
Travelcare increased sales by 6.2 per cent to £ 401.5 million despite difficult trading conditions and reduced losses to £ 0.4 million, down from £ 3.7 million in 2001.
In financial services, 2002 saw the formation of Co-operative Financial Services (CFS) under the leadership of Mervyn Pedelty.
"Bringing the bank and CIS together into Co-operative Financial Services offers great potential for growth," said Mr Beaumont.
"There is surprisingly limited overlap between their customer bases, creating opportunities for cross-selling," he added.
Despite the current global situation affecting the insurance industry, CIS's net premium earned was stable at £ 1,949 million, a rise of three per cent on 2001. Pre-tax profit from general insurance rose to £ 27.5 million from £ 13.8 million last year.
Across its family of businesses the Co-operative Group invested £ 359 million in 2002, while borrowings increased by £ 108 million to £ 368 million (due to the Alldays acquisition). Gearing remained low at 14.1 per cent.
Members' funds stand at £ 2.5 billion after distributions of almost £ 20 million, including corporate members' dividends of £ 14.9 million.
The Group also returned 5.4 per cent of its profits to charitable and community causes, and paid out a record £ 27 million in Dividend payments.