‘Transformed’ Co-op posts increased revenues

The Co-operative Group recorded increased revenues of 8.4 per cent for the first half of 2010, but the rebranding of the Somerfield stores it acquired last year had caused “disruption,” it said today.

Turnover grew to £6.9bn compared to the same period last year, resulting in a pre-tax profit of £307m. The Somerfield rebranding and integration saw food sales fall by one per cent. Last year, profits from Somerfield store disposals had boosted profits.

The half-yearly report said ‘unavoidable disruption that comes with large scale integration’ but that the group had been ‘transformed’ over the last three years.

“As a result, profit before payment to members is £169.2m against £244.5m the previous year,” it said. “However after stripping out the volatile one-off impacts, underlying Group operating profit increased by 14 per cent to £307m (£269m) and underlying profit before payments to members is up 17 per cent to £260m, reflecting a strong core trading performance.”

Peter Marks, chief executive of the group, said: “The Group has delivered another strong performance over the past six months, with continued growth in revenue and underlying profits. Over the last three years, the group has been transformed.

“We have made further significant progress in the integration of both the Somerfield and Britannia businesses in the first half. This consolidation will continue through the rest of this year, with a strong focus on ensuring that we continue to drive efficiencies and make the most of the opportunities that come from operating across a number of business areas.

“We are reaping considerable benefits from our new found scale — a 7.6 per cent grocery market share — with better buying terms being reflected in keener prices. When we acquired Somerfield we said that, to be successful, the integration needed to be done at pace — one business within two years. That is still our plan and we are on track to deliver it by early next year.”

“We are confident that our unique approach to business — combining value with values — will enable us to continue to make solid progress.”