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The Co-op moved back into operating profit last year as strong membership growth and increased like-for-like food sales boosted performance at the group.

Overall revenues for 2023 fell £0.2bn to £11.3bn, with the reduction primarily driven by the exit of its petrol forecourts business during 2022.

Excluding the impact of the petrol forecourt sale, revenue increased 4.7% or £0.5bn.

Food revenue was marginally down at £7.3bn from £7.8bn, driven primarily by the sale of the petrol forecourt business. Excluding the forecourt disposal, food revenue was up 4.3% or £0.3bn from £7bn of comparable sales in 2022.

Food performance was boosted by Co-op investing £70m, annualising to £90m, into lowering pricing across 770 key product lines to support its member owners, including the introduction of almost 200 member prices, which was further extended to include branded product lines in early 2024.

The group surpassed its own expectations with membership growth, with 14% uplift and over a million new members joining to reach five million active member-owners.

Sales penetration from members in food stores reached a historic high of 37%, with members now averaging 12.9 visits every 12 weeks compared with 12.4 visits last year.

Online sales also continued to grow, reaching £311m from £222m. The Co-op secured the top position in the quick convenience market in the second half of the year, according to NIQ, expanded its partnership with Just Eat to over 1,000 stores, and aims to grow from 23% currently to capture 30% of the overall quick convenience market share in the next four years.

Food underlying operating profit increased 11% year on year to £154m from £139m, attributable to enhancements in cost efficiencies, including improvements in availability, waste reduction, optimised stock-holding, and overall reduction in its cost-to-serve.

Group-wide underlying profit increased by £14m, or 17%, to £97m.

Its overall operating profit was £66m, having been a loss of £12m in 2022.

Ongoing progress in strengthening the balance sheet resulted in a further reduction in net debt to £82m – a decrease of £240m year on year.

Elsewhere in the business, wholesale revenue grew by £39m, or 2.9%, to £1.4bn, though profitability decreased to £13.2m from £21.2m due to investment in enhancing its proposition to retailers.

Franchise revenue increased to £56m from £54m, with the addition of three new franchise stores and a new trial format in three petrol stations.

Co-op said the work undertaken over the past two years to significantly strengthen the Co-op’s financial position had “enabled us to effectively navigate any ongoing economic volatility and we are now well-positioned to pursue our strategic growth initiatives across our business”.

CEO Shirine Khoury-Haq said: “Our relentless focus on strengthening our financial position has enabled us to navigate a highly turbulent external landscape, delivering increased value for our member-owners and planning for a future with confidence and with membership firmly back at the heart of our business. Over the last two years, our net-debt has reduced by 90% from over £900m, to £82m today. Whilst markets remain challenging, we are in firmly in control of our Co-op and our destiny.

“Our success in attracting new members has seen us surpass our expectations with new sign ups last year higher than the previous two years combined. This momentum has continued into 2024 as we now stand at 5.2 million active member owners, and we expect to continue this journey and substantially increase the number of member-owners to eight million by 2030. We look forward with confidence as we focus on growing our business for our member-owners, while simultaneously enhancing the value we deliver to them and their communities.

“2024 marks a significant shift as we begin putting in place the building blocks for our strategic growth plans across our Co-op, with a focus on growing our existing businesses including increasing our share of the quick commerce market and expanding our presence within the life services sector.”

Co-op chair Debbie White added: “I’m delighted to have joined the Co-op at a pivotal moment. As we mark the 180th anniversary of the Co-op, its relevance in today’s world has never been more apparent.

“The dedication and hard work of our 56,000 colleagues delivered both a financially strengthened Co-op, which ended the year in a much stronger position than the previous year, as well as a reinvigorated Co-op, which is well-placed to continue to grow membership and create more value for its member-owners. This includes expanding financial rewards, fostering more opportunities for engagement, and facilitating meaningful contributions to communities across the UK.”

Morning update

French packaging giant Mondi has secured an extra two weeks to make a final offer for DS Smith.

The two companies previously announced that they had reached an agreement in principle on the key financial terms of a possible all share offer by Mondi for DS Smith.

Mondi had a deadline of 4 April to announce a firm intention to make an offer or step away from a deal, but has seen that deadline extended to 23 April after DS Smith requestion an extension from the Panel on Takeovers and Mergers.

DS Smith said it was continuing discussions with Mondi regarding the deal.

Elsewhere, Ocado has announced its chairman Rick Haythornthwaite will step down from the board due to his recent appointment as group chair of NatWest Group.

Haythornthwaite explained: “Since the announcement of my appointment as group chair of NatWest I have given extensive thought to my workload, listened to all parties and reflected on how I ensure that I deliver effectively on all fronts. With the benefit of time and greater visibility of the expected growth in requirements of the publicly-listed portfolio, it has become evident that pressure on my time is likely to increase over the medium term.

“Given that Ocado has a strong and stable board, a high-quality management team as well as good momentum in business performance, I have made public my intention to step down a year from now to ensure that the company has sufficient time for a measured chair succession.”

Ocado CEO and founder Tim Steiner said: “Needless to say, we will be disappointed to lose Rick but we fully understand the reasons why he is stepping down as chair to focus on his new role at NatWest. Rick has done a great job strengthening corporate governance, providing the executive team with wise advice and, together with a renewed and refocused board, helping us grow the business over the last three years.

“We are pleased that he will continue as chair for the next 12 months, allowing us plenty of time to find a suitable replacement and ensure an orderly transition. We are confident that we can then further build on the strong foundations that Rick has helped put in place.”

Greggs has appointed Tamara Rogers as an independent non-executive director with effect from 1 June 2024.

She is currently the chief marketing officer of Haleon, the FTSE100 listed consumer healthcare company, and has over 30 years’ experience across a range of commercial and marketing roles.

She joined GSK in 2018 having spent almost 25 years with Unilever, where she held significant leadership positions, and was appointed as CMO at Haleon ahead of its demerger from GSK and listing in 2022.

Matt Davies, chair of Greggs, said: “We are delighted to announce Tamara’s appointment to our board. She brings a wealth of experience across marketing, customer insight, and digital commerce which will be of significant value as Greggs continues its journey as a multi-channel consumer business.”

On the markets this morning, the FTSE 100 is up 0.2% to 7,956.8pts.

Early risers include Greencore, up 2.5% to 130.4p, Just Eat, up 2% to 1,246p and PZ Cussons, up 1.8% to 89.7p.

Fallers include THG, down 3.1% to 64p, Domino’s Pizza Group, down 1.9% to 340p and Ocado, down 1.6% to 432.4p.

Yesterday in the City

The FTSE 100 close yesterday broadly flat at 7,937.4pts having fallen away from the 8,000pts barrier breached on Tuesday.

Risers yesterday included Deliveroo, up 3.8% to 125.4p, Just Eat, up 3.2% to 1,222p, Bakkavor, up 2.7% to 113.5p and McBride, up 2.6% to 102p.

The day’s fallers included Glanbia, down 2.8% to €17.34, B&M European Value Retail, down 1.9% to 528.8p, PZ Cussons, down 1.7% to 88.1p, Britvic, down 1.6% to 806p and Unilever, down 1.4% to 3,879p.

Tesco meat supplier Hilton Food Group ended the day up 1.6% to 868p after posting its annual results.