ScotMid Co-operative Society has written off a multi-million pound sum related to the purchase of convenience chain Morning Noon & Night.

The Edinburgh-based society reported an operating surplus of £1.1m for the year to January 28. This added up to a £19.9m loss after the cost of a restructure and a £12.6m writing down of acquisition goodwill for Morning Noon & Night.

ScotMid spokesman Malcolm Brown said: "We paid more than the market value for Morning Noon & Night but felt it was strategically important to be present throughout Scotland.

"We decided to take the goodwill accounting charges this year, although we could have written them off over a longer period. The trading environment has been difficult."

The society acquired 50 Morning, Noon & Night c-stores in 2004 for an estimated £27m. It was one of the most profitable c-store chains in Scotland, with annual operating profits of £1.9m on sales of £46m.

Brown said ScotMid had no immediate plans to rebrand the Morning Noon & Night stores.

ScotMid was transforming from a supermarket into a convenience retailer, and although the transition had been difficult, it was a strategic necessity, he added.

John Brodie, chief executive, added: "This process of continual improvement is well underway, but make no mistake, we face many challenges ahead."

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