Britain’s Cooperative Group biggest mutual owned by 8.5 million members and founded in 1844 has returned to profit and reduced its debt mountain. The hard work of rebuilding the Group for the next generation is underway, its chief executive Richard Pennycook has told members, the Guardian reports.
The group’s profit before member payments was £124m last year, with revenues of £9.4bn. The Co-op benefited from a £216m gain on the sale of its pharmacy and farming businesses. This compares with a £2.3bn loss in 2013 following the discovery of a £1.5bn black hole at its banking arm and its part-disposal along with a writedown of the value of the group’s Somerfield store chain.
In a disastrous year, the Co-op Bank came close to collapse and lost its mutual status. It was rescued by bondholders, led by US hedge funds, while the Co-op Group’s stake was reduced to a minority holding of 20%. The bank’s former chairman, Paul Flowers, nicknamed the Crystal Methodist, was fined for drug possession last spring. The Co-op Group’s former chief executive Euan Sutherland was forced to quit after a furore over his pay.
Pennycook added without the profit from the pharmacy sale and property disposals, the Co-op would “at best, have broken even”. The group, which is now focused on food, funerals, insurance and legal services, also reduced its borrowings to £808m from £1.4bn.
Group is the UK’s fifth biggest food retailer with almost 2,800 convenience and medium-sized stores. The group opened 82 new convenience stores and refurbished more than 700 shops last year. It hopes to add another 100 convenience stores this year.”