Revitalised Co-operative Group delivers improved performance across its family of businesses
Preliminary results for The Co-operative Group for the 52 weeks ended 1st January, 2011
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||Growth vs 2009* |
Trading Group sales
Underlying Group operating profit **
Trading Group underlying operating profit
CFS underlying operating profit
|Underlying profit before payments to and on behalf of members (equivalent to the pre-tax profit of a plc)***
|| +48.3% (£367.9m)|
Total Dividend to be paid in 2011****
||down 9.8% (£1,597.4m) |
Another record year with solid results across the Group, against backdrop of economic uncertainty
- Revitalisation of the business continues due to ongoing investment in our store and branch estates
- Integrations of Somerfield in Food and Britannia in Financial Services on track
- Completion of three-year business plan under which we have exceeded targets – doubling profits, sales and membership numbers
- Successful launch of next phase of Group development with moves to maximise the potential of the Co-operative family of businesses and increase our membership numbers to 20m by 2020
- Co-operative Financial Services and Food business increasing co-operation with the set up of in-store banks
- In-store electrical retailing trials with “pods” offering full internet range of goods in food stores
- Co-operative Farms working with Food business to increase percentage of Co-operative UK grown fresh food in stores from 6.5% to 25% by 2015
- Executive management structure realigned behind new strategic focus
- Balance sheet remains strong and cash position well managed
- Proposed Dividend to consumer members up 55% to £77.4m
- Food business delivered strong result, in spite of difficult economic conditions and disruption associated with integration of Somerfield
- Sales up 4.8% to £7.5bn
- Operating profit before significant items up 33.3% to £382.6m
- A further 524 stores refitted and by April 2011 all stores will be operating under the Co-operative brand
- Winner of Green Supermarket of the Year, and Responsible Retailer of the Year
- 350 more stores planned by 2013 creating around 7,000 jobs
- £70m planned investment this year in food logistics network
- 350 new products launched in 2010 and 50 more to be added to premium TI range this year
- Financial services business enhanced its financial strength over the period
- CFS revenue up 23.6%
- Operating profit up 17.7% to £208.6m
- Capital and liquidity position remains strong: Bank core tier 1 ratio was 9.6%, Bank customer funding ratio at 107%
- 79% increase in current account switchers in 2010
- Fundamental transformation of the business continues following Britannia merger, delivering an enhanced customer experience
- Named the Financial Times Most Sustainable Bank of the Year
- Foundations laid for launch of Ethical Operating Plan, positioning the Co-operative Group as the UK’s most responsible business
- The Plan sets out ambitious new targets and heralds a new era for sustainable development both in our business, and beyond – seeking to improve our own performance while encouraging customers and members to take action and campaign to influence public policy
- Foundation of Enterprise Hub to nurture more than 350 enterprises to create and grow thriving and sustainable community-based co-operatives
- Support for the formation of the Schools Co-operative Society, which seeks to establish and support 200 co-operative schools
Peter Marks, Group Chief Executive, The Co-operative Group, said:
“I am delighted to report that 2010 was another record year for the Co-operative Group, with solid results right across the Group and continued growth in sales and profitability. The past year caps what has been a truly remarkable and exhilarating period for the Group, marking the completion of our three-year business plan following the merger of the Group and United Co-operatives in 2007. When we brought the two societies together we knew we were creating a business with the potential to radically reassert The Co-operative on the high street and drive the renaissance of the wider Co-operative movement. We set ourselves some very ambitious performance targets – and three years on, we have not only met but exceeded those targets against the backdrop of the economic downturn.
“We have achieved our success due to continued investment in our store and branch estates and in our brand, our products and our service. In addition, we made two ambitious and transformative acquisitions - Somerfield in Food and Britannia in Financial Services.
“We have now embarked on the next phase of our journey – working to ensure that we maximise the potential of the Co-operative family of businesses to better serve our 6.5m members. At the same time, our ethics and social campaigning will continue to be at the forefront as we work to reaffirm The Co-operative Group as the pre-eminent ethical business in the UK.
“Looking ahead, we had hoped to see signs of economic recovery by the start of 2011, but the downturn is clearly biting deeper than we had expected. We now anticipate challenging trading conditions through to the end of this year and into 2012. With consumers feeling the squeeze on their spending, I know that all of our businesses will have to fight for their market share. That means we must make even greater efforts to ensure we are responding to the needs of our members and customers and are giving them good reasons to continue to trade with us.
“But, despite the difficult economic environment I am confident that we are well placed to meet the challenge. During 2011 we will still be a business in transition, however, all the work done over the past three years means we are in good shape to continue to weather the downturn and make the most of opportunities when the economic situation improves. We will continue to set ourselves challenging, but achievable targets for both our business performance and our social goals because that is what our members ask for and expect. It is that drive and ambition for excellence that I believe will ensure our long-term success.
“Finally, this time last year I welcomed the interest being shown by all the mainstream political parties in our ownership model, and the potential they saw in co-operatives to drive improvements in the delivery of public sector services. Since then there has been a great deal of talk, but little by way of action. What is now needed, to take ‘Big Society’ thinking from mere rhetoric to something tangible, is a ‘one stop shop’ where those who want to set up a co-operative can meet the experts and actually make things happen. This is something we plan to launch this year. We are also committing to spend £11m to support the growth and development of co-operative businesses and schools in the UK. All of this gives me the confidence to say that we are firmly on the right path to meet our vision of creating a better society.”
The Co-operative Group:
Martin Henderson 07770 925 959
Russ Brady 07880 784 442
Contact Susanna Voyle/Lucy Legh Tel: 020 7353 4200
*Results for 2010 represent the 52 weeks to 1stJanuary 2011, 2009 represent 51 weeks to 2nd January 2010
**Underlying Group operating profit measures the normal underlying business performance and removes from operating profit the following volatile or one-off costs: property disposal profits, investment property valuation fluctuations, significant items, fair-value amortisation, Financial Services Compensation Scheme levies and short-term investment fluctuations
***Underlying profit before payments to members is underlying Group operating profit less underlying interest (interest excluding fair value movement and other net financial income) plus the Group’s share of the operating result of associates and joint ventures
****The Dividend payment is subject to approval by members at the Group's AGM on 21stMay2011. The total Dividend includes an interim Dividend of £16.4m which was approved by members on 6th November, 2010.