?Divi’ returns as profits rise

THE Co-operative Group has unveiled plans for the return of the ?Co-op Divi&#039 and also revealed a 41 per cent increase in annual operating profits to &#163 327.3 million.
A dividend has always been paid to corporate members, which this year has increased 12 per cent to &#163 16.7 million, but later this year it will pay a flat rate of around &#163 10 to consumer members.
From 2005, the dividend will be based on the amount members spend with the group&#039s businesses ? the first time since the ?Divi&#039 died out in the 1960s/70s.
Across the whole group pre-tax profits were &#163 385.4 million for the year to 10th January 2004 compared with last year&#039s loss of &#163 112.5 million, which was due to fluctuations in the value of CIS investments.
The Co-operative Bank results increased 6.2 per cent to &#163 130.1 million. While CIS blamed "difficult market conditions" on its premium income falling to &#163 1.79 billion from &#163 1.95 billion in 2002.
In the group&#039s food arm, profits rose 63 per cent to &#163 113.4 million on sales of &#163 3 billion, up 17.4 per cent. The Welcome convenience stores brand saw like-for-like sales increase by 3.4 per cent, about 1 per cent ahead of the market.
Non-food showed a decline in profit from &#163 3.3 million in 2002 to &#163 0.3 million. It said the fall was driven by commercial pressures on sales as the current department stores fall behind market standards.
Co-op Pharmacy profits grew by 21 per cent, with prescription sales being particularly strong with like-for-like sales up 8.7 per cent. Farmcare produced a profit of &#163 1.6 million ? the first profit since 1997.
Funeralcare, which remains the largest funeral provider in Britain, saw profits rise by 43 per cent to &#163 18.2 million.
Travelcare returned to profitability, although it said the travel market remained difficult. The acquisition of justflights.com and cheapestflights.co.uk added five call centres to Travelcare&#039s existing network, helping to achieve its target of boosting sales through direct channels.
A reduction in operating costs at Priory Motors helped the chain achieve a 17 per cent increase in profits to &#163 1.4 million.
ACC Milk produced profits of &#163 5.5 million in 2003 on sales of &#163 310 million, with the return to profitability helped by an improved market in liquid milk. As announced in the News in April the Co-operative Group is still standing by its statement to explore options for the sale of ACC.
Syncro, the engineering and building services operation, reported losses of &#163 4.7 million for the year, although new management produced some recovery in the second half.
Martin Beaumont, Chief Executive of the Co-operative Group, said: "We are making sustained progress in unlocking the potential within the Co-operative Group, and the 41 per cent rise in profits for 2003 to &#163 327 million demonstrates our success.
"We maintain a highly commercial approach to running our businesses to ensure that we maximise profitability for the benefit of our members while still upholding the core values of a co-operative organisation."