The Co-operative Group has announced that it is back in profit after the near-collapse of its bank, as it emerges from the “rescue” phase of its turnaround.
In the year ended January 3rd, the formerly troubled group posted a net profit of £216 million for 2014, compared to a loss of £2.3 billion the previous year.
Group revenue hit £9.4 billion (down from £9.7 billion in 2013), but central corporate costs were reduced by £30 million, whilst net debt was significantly reduced to £808 million.
Chief executive of The Co-operative Group, Richard Pennycook said "We made solid progress in 2014 as we successfully concluded the rescue phase of our turnaround. The hard work of rebuilding The Co-operative Group for the next generation, and restoring it to its rightful place at the heart of communities up and down the UK, is now underway.
"We significantly reduced net debt, even after meeting our outstanding contributions to The Co-operative Bank. This followed the successful sales of our Farms and Pharmacy businesses and detailed work to ensure we have the right cost base in place. Our core businesses continued to deliver for customers, with their financial performances reflecting challenging trading conditions across all of our markets and the different stages they are each at in terms of Rebuild.
"A significant element of our 2014 profit relates to one-off disposal gains on the sale of our Farms and Pharmacy businesses and property disposals. Without these we would, at best, have broken even. Against that backdrop, and given the need to invest in all our businesses, the Board will not be recommending a dividend to members and believes that a resumption of dividend payments is unlikely until the Rebuild phase is complete and we have returned to sustainable profitable growth."
The outlook for The Co-op Group is positive as it is looking to upgrade its IT systems and open a further 40 stores in the funerals business.
