Windfall for customers as profits rise.
THREE million customer members of the Co-operative Group are to share pounds 50m after the business reported an 11% increase in annual profits.
The UK's largest mutual retailer posted pre-tax profits of pounds 217.6m in the year to January 10, which saw the total member dividend payout boosted by pounds 5m.
Sales at its supermarket business - which includes Somerfield following a recent takeover - rose 5% on a like-for-like basis and excluding fuel. First quarter comparable sales in the current year rose 6.5%, according to the Co-op.
The results compare well with its bigger supermarket rivals, with Tesco and Sainsbury's lagging behind with annual sales growth of 3% and 4.5%.
Payments to members is based on their spend within the group over the year and will be paid out after final approval following the Co-op's annual meeting.
The Co-op said it was benefiting from the trend for cash-conscious consumers to shop locally, with its convenience store format appealing to those not wanting to travel by car to the supermarket. The mutual is the now the UK's fifth largest food retailer, the third largest pharmaceuticals chain, the biggest provider of funeral services and the largest independent travel business in the country.
Its pounds 1.56bn takeover of Somerfield helped strengthen its position behind the "big four" supermarkets, while also boosting total group staff numbers to around 110,000 working across 4,900 retail outlets.
Co-op is also merging its financial services business with Britannia Building Society to create a "super-mutual" with more than 300 branches - a deal which is expected to complete on August 1. The financial services business has already reported annual profits showing a 2.8% drop to pounds 148.7m after it took a knock from the general insurance business..
But its banking operation showed resilience in the face of the financial crisis, with a 70% rise in underlying profits as it said customers flocked to the group in search of security.
Peter Marks, chief executive of Co-op, said the group was "coming into its own" amid the recession. "While the economic outlook clearly remains difficult, we believe that The Co-operative Group is in a strong position - our focus on financial success combined with social responsibility is more attractive than ever before," he added.
Co-op, which prides itself as a customerowned group with an ethical focus, said it contributed pounds 11.5m to the community in 2008, up 10% on the previous year and equivalent to 9.9% of pre-tax profits..
PAYING OUT The Co-operative.
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|Publication:||The Journal (Newcastle, England)|
|Article Type:||Financial report|
|Date:||May 7, 2009|
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