Co-op pre-tax profits fall to £7m

The Co-op has revealed its group pre-tax profits fell 84% to £7m in the first half of the year as it was impacted by “challenging market conditions”.

It also revealed that underlying operating profit was down £33m to £18m.

The firm said that in “very challenging markets” it delivered a “robust” sales performance, with revenues broadly flat versus H1 2021 at £6.5bn. It added that Co-op Food also revived its market share to 6.5%.

Co-op added its “clear focus on cost reduction” has helped offset some of the material external cost headwinds impacting the group. Energy and wage inflation increased costs by around £50m versus H1 2021 before mitigating cost savings, and rates holidays in H1 2021 create a further £20m adverse variance.

Shirine Khoury-Haq, CEO of the Co-op, said: “Against a highly challenging economic backdrop, we have made significant progress in strengthening our balance sheet, whilst continuing to support the needs of our colleagues, members, customers and the communities in which we operate. Our clear focus on developing our businesses, whilst controlling costs, improving our cash-position and reducing debt is paying dividends.

“Looking ahead, while we are mindful of the continued economic challenges, we have great confidence in the underlying strength of the Co-op and all our businesses. Having faced into some tough decisions in the first half, focused on cutting costs and improving efficiency, we ended the period stronger both operationally and financially.”

She added: “Since then, we have progressed further with the planned sale of our non-core petrol forecourts business. This will strengthen us more and provide the means to invest in our core businesses, whilst enabling us to support our members, customers, colleagues and communities through the cost-of-living crisis.

“I’d like to thank every single one of our colleagues for their leadership in delivering our results and vision this year.”