Co-op Group profits up 49%

THE Co-operative Group has announced strong interim results for its family of businesses.
In the six months to 28 June, the Group&#039s income rose by 10 per cent (&#163 357.4 million) to &#163 3.9 billion and consolidated operating profit, before exceptionals, was up 49 per cent (&#163 55.8 million) to &#163 169.7 million.
This was made up from profits from trading activities, up by &#163 27.6 million to &#163 60.7 million and profits from the Co-operative Bank and CIS (Co-operative Financial Services), up by &#163 8 million to &#163 75.3 million and up by &#163 21.2 million to &#163 33.7 million respectively.
The Group says the improved trading performance was mainly due to its food retailing business and the strategy of focusing on the top-up shopping sector.
A heavy investment programme in store refits and acquisitions, and the expansion of the Welcome convenience store format, helped it achieve a 75 per cent rise in profits, before exceptionals, up by &#163 19.6 million to &#163 45.8 million , with sales up 27 per cent to &#163 1.4 billion.
Like-for-like sales during the period were also up four per cent ? well ahead of the current market.
Profit improvements at CFS resulted from a four per cent rise in the Co-operative Bank&#039s operating income and a 14 per cent reduction in the charge for bad debts.
The profit improvement in CIS&#039 general insurance business was helped by a lower claims ratio, due to better than average weather conditions..
In June, the Group acquired the Balfour chain of convenience stores and newsagents for &#163 31 million, strengthening its position as the UK leader in top-up food shopping.
Other acquisitions included Travelcare&#039s purchase of Sunshare Vacations, to boost its direct sales business via the internet and the Co-operative Bank&#039s acquisition of Northern Rock&#039s credit card portfolio of 90,000 accounts.
The Group has also won its share of accolades. Travelcare was voted UK Travel Agent of the Year in leading industry awards; the food retailing business received The Grocer Magazine&#039s Gold Award for Marketing Excellence and the Group&#039s financial services businesses won four categories in the Guardian and Observer Consumer Finance Awards.
"The last six months have shown part of what we can achieve as a Group ? but only part. We are committed to maintaining the pace of progress and demonstrating that the co-operative business model can be successful, profitable, responsible and relevant to today&#039s society and today&#039s customers," said Chief Executive Martin Beaumont.