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Co-op has seen its full-year pre-tax profits rise by nearly sixfold, soaring by £133m to £161m, up from £28m the prior year, despite facing over £200m of new headwinds and investment costs across the group.
The surge in profits was driven by increased operating profits, which rose by £34m to £131m, as well as improved Funeralcare plan investment returns.
Full-year revenues remained steady at £11.3bn as the group “continued to right size the business”.
Food revenues rose by 1.9% to £7.4bn amid strong multichannel sales across stores and online, with online sales rocketing 46% to £460m. Food underlying operating profit also increased by £28m to £201m, up from £173m the prior year.
Over the period, the group invested £88m in lowering food prices, £82m in its store estate and £35m in technology innovation.
Elsewhere, its Wholesale business reported a profit loss of £1m, down from a previous profit of £14m, in light of “continued wider challenging market conditions” and a “significant” price investment across hundreds of products, while wholesale revenues fell by 5.5% to £1.4bn.
Franchise revenues increased by 31% to £74m however, as the group opened 20 new franchises over the year, including its first NHS and MoD sites as well as seven new stores with EG On The Move.
Looking ahead, the group said it remains on track to open over 120 new stores across retail and franchise by the end of 2025.
However, it warned of continued wider “external pressures and volatility”, with broader geopolitical issues, the introduction of both extended producer responsibility (EPR) charges and higher National Insurance contributions, and cost inflation.
Co-op said that “whilst not immune from these pressures”, it will focus on medium to long term profitability, adding that its strong balance sheet “enables us to face directly into these external headwinds, compete effectively in challenging markets, and pursue growth”.
Shirine Khoury-Haq, CEO of the Co-op, said: “Our solid business performance alongside the progress we have made in right sizing the business and delivering against our new strategy, is enabling us to create more value for our member-owners every day.
“While broader economic challenges remain, our businesses are delivering strongly against the market and I’m proud that we continue to provide support to our colleagues, members, and their communities through the continued cost of living challenges they face.”
Debbie White, chair of the Co-op, added: “These results show that our strategy on delivering for our member owners whilst also delivering long term financial and operational progress is working. I’m particularly delighted we have increased our active membership by 22%. We continue to focus on long term profitable growth, creating more value for all our member owners and the communities they live in.”
