Co-op
Half-year profit of £66m for The Co-op Group, which has named Richard Pennycook as its permanent CEO
The Co-operative Group has posted a return to profit.
The group reported a half-year underlying profit of £66 million for the 26 weeks to 5 July – down from a profit of £116m in the same half-year period in 2013, but bouncing back from the full-year loss of £2.5bn posted in April.
The food business saw like-for-like sales up by 1% overall, albeit with underlying operating profit falling by just over 8% to £107m.
Furthermore, the group has appointed Richard Pennycook as chief executive on a permanent basis, and has started to implement a three-year turnaround plan.
Pennycook, who had been working as interim CEO, said: “2014 has marked a defining period for The Co-operative Group. We have delivered the changes we set out including fundamentally reforming our governance and we are developing clear plans to drive our success for the future.
“We took the tough decisions to re-shape our group to ensure it is on a sustainable footing and the disposals of our pharmacy, farms and Sunwin Services businesses as part of this will repair our balance sheet.
“Our Group strategy is to build on our existing strengths as a convenience food retailer and to optimise the performance of our new consumer services division, comprising of funeral care, general insurance and legal services. We are now in a position to rebuild and restore the group and can look to the future with greater confidence.”
By the end of the year, the group’s food business plans to have launched 100 new stores, with over 300 further refits, 800 new products launched and 4,000 products now under our ‘Loved by Us’ range.
Retailer completes sale of former logistics hub after moving operations to M1 site in 18-month major logistics overhaul.
The Co-operative Estates has completed the sale of its former East Midlands regional distribution centre (RDC) to a logistics company.
The RDC, at Blenheim Industrial Estate, Nottingham, has been sold to logistics firm Great Bear Distribution, which plans to use it for storage and distribution.
The 208,000 sq ft warehouse was closed as part of The Co-operative’s restructuring of its national distribution network. Operations have been consolidated into a new 500,000 sq ft RDC at Castlewood, at junction 28 on the M1.
The sale included an adjacent vehicle maintenance unit of 7,600 sq ft, with both the areas covering around nine acres.
“The lack of speculative development in recent years now means that demand for large industrial units outweighs supply which has aided the sale,” said Geoff Player, director of commercial and investment property with The Co-operative Estates.
Player said it is the company’s tenth major industrial property transaction since it began restructuring its UK warehouses 18 months ago.
David Willmer, senior director at GVA, who acted on behalf of The Co-operative Estates, said: “The quality of the unit, together with its excellent accessibility to the motorway network, ensured that strong interest was received from both potential occupiers and investors.”
Results of a survey by Ethical Consumer readers come after scandal surrounding Paul Flowers, group’s ex-chairman
The Co-operative Group has been voted the most ethical company in the UK over the last 25 years.
The results of a survey by the readers of the Ethical Consumer magazine come shortly after a scandal surrounding Paul Flowers, the group’s former chairman, who pleaded guilty to the charge of possessing cocaine in May.
It also revealed losses of £2.5 billion for the financial year ending April 2014
Ethical Consumer co-director Tim Hunt, said: “Many commentators have had their knives out for The Co-op Group in recent months. Ethical Consumer’s readers, however, are able to see through the spin and realise that despite the problems, The Co-op remains an ethical business at heart – at least for the time being.”
In order to generate capital, The Co-op Group has sold its farm business to the Welcome Trust for £249 millions.
Peter Pereira Gray, managing director of investments at the Wellcome Trust, said: “The Co-operative has its own form of ethics. We wouldn’t necessarily seek to be exactly replicating theirs. We have our own very high standards.”
Award is the first level of accolade in the Responsible Business Awards, run by the charity Business in the Community
East of England Co-op has been recognised with a ‘Big Tick’ as part of the prestigious Responsible Business Awards 2014 –
The Big Tick is the first level of accolade in the Responsible Business Awards, run by the charity Business in the Community, which recognises businesses that are making a positive difference to society and to the environment.
The award organisers noted the way that East of England Co-op’s Sourced Locally programme has had a transformational effect on the regional economy since it began in 2007.
Through payments to local growers and producers, more than £24 million has been ploughed back into the local economy, and helped producers to create over 300 new jobs, as well as protecting many more.
Kevin Warden, local and fresh foods manager for East of England Co-op, said: “The success of Sourced Locally keeps growing and gaining the Big Tick again this year is great news. We’re always talking to new suppliers, and looking for new products to add to our shelves. We have saved food miles, encouraged local suppliers to work together and given customers the chance to buy products which are produced and grown in their area.”
A Big Tick is a leading endorsement of responsible business, and companies are awarded for initiatives tackling a range of issues: from stimulating local or rural communities, building long-term partnerships with schools, inspiring young talent, to embedding environmental sustainability into how products and services are used by customers.
Stephen Howard, chief executive at Business in the Community, said: “The Responsible Business Awards shine a much needed spotlight on the powerful impact of business. Each of the companies recognised are playing their part to build a new contract between business and society and a more sustainable future for us all. I congratulate the East of England Co-op for its’ Big Tick reaccreditation, which is a powerful symbol of business doing more to bring about change.”