ANGLIA Co-op members have been given an upbeat assessment of the society's current financial position and future prospects despite a significant drop in profits for the year ending September 3rd.
Members attending the recent annual meeting in Peterborough were told that the society's record capital expenditure of £ 34.8 million – the money spent on buying seven department stores from United Co-operatives plus four local stores and petrol stations in East Anglia and also expenditure on the funeral fleet and new technology – had impacted on trading figures.
The annual report presented to the meeting says turnover increased by £ 18.6m (6.1 per cent) thanks largely to the acquisition of the department stores in Yorkshire and Greater Manchester, while the like-for-like turnover increased by just 0.2 per cent as a result of the slowdown in retailing and increased competition in Anglia's main trading area.
The society's trading surplus before distributions amounted to just over £ 3.5 million as opposed to £ 6.8 million for the year ended September 2004.
However the directors' report points out that tangible assets increased by £ 29.3 million (39.1 per cent) following the investment in new stores and net assets increased by 2.1 per cent. The report adds that although trading properties are included in the balance sheet at "net book value" there is an excess of current market valuations over net book values of £ 39 million.
The report goes on: "The society finances its operations through retained reserves and bank loans, which are term loans at agreed fixed rates of interest and, as such, the society is not unduly exposed to interest rate fluctuations.
"The acquisition of the new stores has not only added growth to the Non-food Group, but is opening up opportunities to improve buying terms; to introduce new in-store trading partners and to extend product ranges. The society will continue to look for new opportunities to grow our core brands."
Anglia – which currently operates 33 non-food stores and outlets throughout England – is on course to become the Co-op Movement's biggest non-food retailer following the decisions by United and the Co-operative Group to exit the department store sector and is in ongoing discussions with the Group with a view to acquiring some of its 36 stores which are being sold or closed.
It is understood that an announcement regarding the possible sell-off of Group stores will be made early in the new year.
Anglia's current non-food portfolio includes nine AHF home furnishing stores, mainly in East Anglia and the south of England; 22 Westgate department stores stretching from Chipping Norton to Hartlepool; plus electrical and textile superstores in Abingdon, Oxfordshire.