Midcounties announces operating profit of £5.4m for half year

CEO Phil Ponsonby said management teams continued to work towards the co-op’s long-term objectives despite the pressures of the Covid crisis

Midcounties Co-operative has announced an operating profit before significant items of £5.4m for the six months to 24 July.

This is down from £7.1m the previous year, but the co-op adds that after significant items the figure represents an increase – standing at £4.7m, up from £3.7m.

In the report to members, group CEO Phil Ponsonby said co-op’s management teams had come under “significant pressure” from disruptions to its operations and business planning but it had “continued to deliver toward the board’s longer-term objectives by investing in growth, developing new partnerships and supporting our communities”.

Gross sales for the half year were £434m, 7% lower than the same period last year when the co-op, in line with other retailers, saw a sales spike as customers stockpiled for the first lockdown.

Total sales comparisons are also affected by the sale of the co-op’s pharmacies, which were still operating in the first half of last year.

Mr Ponsonby added that there were “profitability improvements to our childcare, travel, healthcare and post office operations, while our funeral services and utilities businesses are slightly negative to last year.”

The half year also saw Midcounties agree to to transfer the majority of its funeral homes to Central England Co-operative, subject to approval by the Competition and Markets Authority.

The society opened six new food stores and started building work on two ‘new generation’ Little Pioneers nurseries, which will open during the second half.

Tech investment includes development work on a new communications platform for members, and an ‘Everymind at work’ app to support colleagues’ mental health.

Mr Ponsonby added: “We have formed working groups to support colleagues from ethnic minorities and LGBTQIA+ groups in developing their careers and improving working environments.

“We also continue to support our communities, having now made over 130,000 home deliveries of food to more vulnerable members and supplied 10,000 meals to vulnerable children in the West Midlands. We have partnered with the charity ‘Go Beyond’ through our Travel business to help support deprived children to experience holidays.”

This work saw the society rated highest out of 20 similar businesses by the Business in the Community (BITC) responsibility tracker, he said.

Mr Ponsonby warned that, looking ahead, “the prevalence of confusion and uncertainty for consumers continues to damage confidence, particularly impacting our travel operations.

“We are hopeful that industry pressure will result in the UK government implementing protocols consistent with most other European nations, which would undoubtedly serve to improve consumer confidence.

“We are also feeling some of the longer-term effects of restrictions and, most probably, Brexit with labour shortages in logistics and frontline services such as food retail and childcare.

“While these operational challenges and cost pressures will remain with us for some time ahead, I am confident in the abilities of our teams to meet them with the resilience and professionalism demonstrated throughout the last year and a half.”