Central England Co-operative increases trading profit

Central England Co-operative has increased its trading profit by 4.8%. Released earlier this month, the society’s results for the year ending 24 January confirm a trading profit in continuing businesses before exceptional items of £21.5m.

This represents an increase from the previous year, when the society achieved a trading profit of £20.5m. Central England has also absorbed the loss of corporate dividend income from the Co-operative Group of £2.1m, following the society’s decision to not offer the dividend after last year’s record loss.

Central England, which has 430 trading outlets across 16 counties, has also increased payments to stakeholders by 25.9%, from £3.9m in 2013/2014 to £4.9m.

During the year, the co-operative invested £42.5m in 23 new openings, including 17 retail stores, five funeral homes and a florist. Gross sales have also increased by 19.8% to £871.5m, reflecting the increased size of the business following the merger with Anglia Society.

Food retail, which accounts for the largest proportion of the society’s business, witnessed a 21.4% increase in sales compared to the previous year. According to the report, the performance was driven by strong growth in convenience stores and the increased size of the business. The society has also been running a refurbishment programme and has rolled out a new concept supermarket format at five stores.

The funeral business faced a challenging year in 2014, with a decline in funeral arrangement numbers as a result of a lower death rate and the increased competition. Gross sales reached £38m; with the society opening four new funeral homes during the year in Mickleover, Sinfin, Ward End and Solihull. The Society also acquired a funeral directors and masonry business in Stoke-on-Trent and opened a floral shop in Birmingham.

Central England’s 21 travel shops experienced growth in long haul, tailor-made and cruise bookings and increased foreign exchanges sales. The report notes that the society’s three optical sites continues to perform well while its specialist vehicle construction business experienced a difficult year as a result of a downturn in demand from one of its major customers.

Through its community dividend scheme, Central England has granted awards to 61 projects across the society’s trading area. The co-op is also using a donations fund to support local charities, schools and community groups. Central England extended its two-year partnership with Newlife by another 12 months in order to reach the £1m fundraising milestone.

The society’s membership and community councils, which include 10 lay members and nine employee-members have also supported a wide range of activities on important issues including healthy eating, food banks and Fairtrade. Since October 2014 the membership and community relations team has delivered workshops on healthy eating at 15 schools.

Central England has also paid £115,000 to the Co-operative Party in 2014. The amount includes support at national level as well as grants to the four society party councils.

In terms of colleague engagement, an attitude survey revealed a reduction with a score of 76, two points below the one in 2013. However, due to the society’s efforts to raise awareness, an increased number of employees feel encouraged to get active and eat healthier.

Following the merger of Midlands Co-operative with Anglia in December 2014, the newly formed Central England Co-operative continued to hold a share in Anglia Home Furnishings Limited, a worker co-operative that spun out of Anglia’s non-food operations. Central England received a net amount of £62,000 from Anglia Home Furnishings Limited in 2014.

Due to the merger the governance structure changed, with directors losing office receiving a severance payment. During the year, payments totalling £206,500 were paid to 15 directors.

Regional committee members and member relations committee members who did not stand or were unsuccessful in the election to the board of membership and community councils in 2014 also received payments.

Commenting on the annual results, chief executive Martyn Cheatle said: “Yet again the society has driven significant growth of the retail estate through continued capital investment.  The merger with Anglia Society in the previous year significantly increased our geographical reach and sales potential and resulted in a subsequent period of transition which has been successfully completed, leaving us in an excellent position for future growth.”