The society, Britain’s biggest independent with nearly 930,000 members, 8,000 staff and over 400 outlets, reported a six per cent rise in sales to £848m, despite the impact of the economic downturn. Capital investment amounted to over £20m and Midlands’ retained profit increased from £10m to £24m.
Chief Executive John Fitzgerald commented: “It is with great pleasure that I am able to report record trading results and increased sales across all core businesses, despite the worsening economic conditions.
“The society’s established business strategy of consistent investment in core businesses, funded by strong operational cash flow and without significant borrowings, stands us in good stead to not only weather the current economic storm but also to prosper.”
He added: “Midlands Co-op is in the fortunate position to be able to build on our current strength and continue our growth as the UK’s largest independent society. I would like to thank all the staff and members for their hard work and commitment.”
Although the society’s net asset value reduced due to the downturn in the investment property market, its positive operational cash flow increased to £47m.
Stores have been purchased at Dronfield Woodhouse, near Chesterfield, and in Birmingham and four acquired Somerfield stores are due to be transferred to the society this month. The annual report says significant progress has been made on the £6m integrated retail business system, Aldata Gold, with the project on target for completion by the end of January 2010.
Challenging conditions for the society’s travel businesses meant that investment in some areas has been offset by cost reduction exercises in others. But, overall, sales increased to a record figure of £260m.
Midlands say the success of its foreign exchange operation has been boosted by the acquisition of the previously outsourced Eurochange business.
Sales in the society’s retail business rose to £528m, with convenience stores and community supermarkets benefiting from an increase in local shopping, resulting from a change in consumer behaviour driven by the economic climate.
Despite the ongoing decline in the national death rate, funeral sales increased to £23.8m, a 1.8 per cent increase on the previous year.
Midlands Co-op’s property business generated a rental income of nearly £8m, and although the net asset value of the property portfolio has not escaped the downturn in property values, the society says it continues to view property as a long term investment aimed at underpinning the trading businesses.
Midlands’ stakeholder strategy, which recognises and rewards members, employees and the community, has seen distributions of £3.2m in the last 12 months.
In addition, fundraising by staff saw £260,000 for the British Heart Foundation in the first year of the society’s two-year partnership with the charity.