Tamworth Co-op reports reduced annual surplus but beats expectations

Chief executive Julian Coles highlighted issues such as the increased national living wage and and restructuring costs

Tamworth Co-op has recorded a pre-tax surplus of £687,000 for the year to 26 January 2019, down from £800,000 the previous year.

But chief executive Julian Coles said the results exceeded the budgeted targets set by the board at the start of the financial year.

“For several years now, our results have shown a pattern of continual improvement, so it’s always going to be disappointing to buck such a positive trend,” he said. “However, the figures just released were actually ahead of the board’s expectations.”

The annual report showed the value of the society’s net assets had risen by more than half a million pounds to £13,681,000.

Mr Coles highlighted several specific reasons for the fall in surplus. The previous year’s results were boosted by one-off credits totalling £96,000 from the Co-op Food buying group which related to past trading.

In addition, property repairs this time around were far higher, with £60,000 being spent on one building alone. Implementing changes to the department store structure also impacted on the figures.

“The furniture department has been in decline for many years now because of market forces and changing shopping trends which were out of our control. We needed to take action, so now we are concentrating purely on our successful fashion area on the ground floor,” said Mr Coles.

“These changes have come at a cost of £74,000, which includes redundancy payments. We’ve never made any bones about the fact that the department store has long been challenging but obviously having to lose valued staff saddened us.”

The report shows a general increase in the society’s expenses, particularly in relation to the national living wage.

Mr Coles added: “Our funeral division carried out fewer funerals during the period under review, while the food division also delivered a lower trading surplus. However, the benchmark in both these areas has been set very high in previous years and they remain vibrant parts of the society.”

The Staffordshire-based co-op, which operates 20 sites, carried out extensive makeovers at the Pelsall funeral home and Kingsbury Co-op convenience store. This saw the Kingsbury store closed for several weeks but sales figures are now up 8%. Planning approval has also been granted for a new purpose-built store on the site of the former Cuckoos Rest public house in Dordon.

The report shows that the Society’s pension liability reduced from £6.8m to £6.5m.

“We gave deserving organisations on our doorstep a total of £26,000 which is a remarkable amount,” said Mr Coles. “The money came from our Community Dividend Fund and Cash in the Bag initiatives.

“The Community Dividend Fund is now in its tenth year and our loyal shoppers and members will have read various reports in the press about the wonderful groups it is helping. Giving back to the areas we trade in is at the very heart of what we do.”