The Co-op has posted a 50% hike in underlying profits, driven by strong growth in its grocery business.
The group’s total revenues for the 52 weeks to 4 January were up 7% to £10.9bn, driven by its continued strong performance from food and the annualisation of its Nisa wholesale acquisition.
Revenue in its food business rose 3% to £7.5bn, with like-for-like sales up 1.9%.
The Co-op said this uptick in grocery sales meant it had now delivered six years of like-for-like food revenue growth.
It opened 79 new stores, refitted 152 stores and extended 10 during the year, with investment of £342m in its food business.
Wholesale like-for-like revenues increased by 1.1%, outperforming the market by 1.4%, with Nisa attracting 94 new partners to the business.
Group underlying profit before tax (excluding the impact of the adoption of IFRS 16 accounting standards) rose 50% to £50m from £33m last year.
This increased profitability was primarily due to food delivering underlying operational profit of £283m – which was £235m on a like-for-like basis excluding IFRS 16, against £204m in 2018.
Underlying profit before tax including IFRS 16 fell to £31m.
The Co-op also said that profit before tax for 2018 has been restated, reduced by £10m, following the identification of some historical accounting errors within Nisa.
“The Co-op made further financial progress through 2019, showing that co-operation is working,” said CEO Steve Murrells said. “While we didn’t know it at the time, that performance set us up well to withstand the impact of the Covid-19 crisis and to enable us to support the communities we operate in.
“No part of our business has been unaffected by the outbreak of the virus and we have played a critical role in communities throughout the UK. Our Food business has helped to feed the nation and our Funeral colleagues have been there for families at their time of greatest need. All of this work will continue and I could not be more proud of our people who have delivered – day in, day out.”
During the year the Co-op returned £76m to members and local causes – £59m to members directly and £17m to 4,400 local causes chosen by members and colleagues.
More than £260m has been paid to members and communities over the past three years.
The group now has an active membership at 4.6 million after a successful focus on driving young membership, with 36% of new members aged 35 or under.
With regards to the coronavirus outbreak, Co-op said its food and funerals staff have been recognised as key workers, with 56,000 frontline colleagues rewarded with a £150 bonus and an extra day’s holiday, all worth more than £13m in total.
It also created temporary jobs for more than 7,000 people out of work as normal workplaces closed, with all posts filled within seven days.
The outbreak has created an “uncertain” outlook for 2020.
The Co-op said it expects additional costs associated with Covid-19 to be in excess of £200m, which will in part be offset by increased food sales and the expected business rates relief announced by the Chancellor.
“Against this backdrop, we are clear on strategy to deliver sustainable growth for the Co-op and to continue to add value for members and for communities,” it stated.
Allan Leighton, independent non-executive chair of the Co-op, added: “The Co-op is drawing deeply on our values of commercial responsibility and community concern to play our part in responding to Covid-19. Our commitment is to do all we can to help our members, customers and colleagues through the weeks and months ahead. It is already clear that Covid-19 will have profound consequences for the UK and global economy and our Co-op members and customers will not be immune.
“Against that backdrop, our results for last year show that we are in a strong position to keep playing our part. At the Co-op, however, we measure our success differently.
“Looking ahead, we believe that co-operative business endeavours and co-operative ways of working will be needed in the future even more than they were in the past.”