Movement records rise in performance

CO-OPERATIVES UK chairman Bob Burlton delivered a generally upbeat performance review to Congress, but warned struggling small societies that it was wrong for them to continue using up...

CO-OPERATIVES UK chairman Bob Burlton delivered a generally upbeat performance review to Congress, but warned struggling small societies that it was wrong for them to continue using up inherited assets without seeking help on future strategies and direction.
Mr Burlton (right) told Congress that, for the second year in succession, there had been a general improvement by the Movement in 2002, with turnover up to nearly &#163 12.6 billion; net profits soaring by 18.3 per cent to &#163 320 million and trading profit after depreciation rising by &#163 54 million to &#163 351 million.
However due to the &#163 280 million write-down of CIS investments as a result of stock market fluctuations, &#163 125 million had been transferred from reserves.
"There has been a modest, but definite upward movement of net profit and trading profit," said Mr Burlton. "But none of us should delude ourseves into thinking the performance of our retail sector is satisfactory and we must continue to strive for further improvement."
He pointed out that although the return on capital employed in UK co-ops was 6.9 per cent in 2002, this still fell well short of the 10 per cent target set by the Co-operative Commission.
The statistics released by Co-operatives UK at Congress show the expanding Phone Co-op as Britain&#039s most successful co-op in terms of return on capital employed last year, though their 16.7 per cent has been distorted by the fact that capital employed includes cash used in the business.
Radstock Society achieved a 14.4 per cent return on capital employed, but again this figure is overstated because no revaluation to current value of land and buildings was available.
So, excluding the Phone Co-op and Radstock Society, the top performing society in terms of return on capital employed was Colchester & East Essex Co-op with 12.3 per cent; followed by United Co-operatives (9.3 per cent); Lincoln and Heart of England (both 8.8 per cent) and Channel Islands (8 per cent).
Two Scottish societies, Lothian, Borders & Angus and the small Nith Valley Co-op also achieved figures of almost 10 per cent, but again Co-operatives UK statistician Steven Kay says the per centages are likely to be inflated becuse of the absence of land and property revaluations.
Mr Burlton told Congress that the results from some small societies were less satisfactory and raised serious concerns about their futures. He said Co-operatives UK would do all it could to help under-performing societies; insisting that it was wrong for co-ops to survive simply by using assets accrued by previous generations and urged directors of struggling co-ops to seek help quickly.
But the chairman wanted to finish on an upbeat note and commented that the process of reversing the Movement&#039s decline was now well underway.
Mr Burlton said the Co-operative Group&#039s acquisition of the Alldays chain, while not fully reflected in the performance review, had put the Movement in pole position the convenience store market. There are now over 3,000 Co-op food stores in the UK and the Movement now has a 5.8 per cent share of the market ? a figure that is likely to rise once the full impact of the Alldays acquisition is known.
"We have been in retreat for some years past, but now there is evidence that the sleeping Co-op giant is reawakening," said Mr Burlton. "Last year&#039s increase to 5.8 per cent grocery market share is a small, but significant step in the right direction.
"Now the aim is to get that market share past the 6 per cent mark and Co-operatives UK will do everything in our power to make it happen."

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