The Co-operative Group has swung back into profit after making a clean break from its embattled banking operations and implementing cost-cutting measures.
The mutual – of which the Co-op retail and food arm is its biggest division – posted a pre-tax profit of £72 million in 2017, compared with a £132 million loss the year before when it made a £140 million writedown of its stake in the Co-operative Bank.
Hedge funds now control the bank and it no longer has ties with the company.
On an underlying basis, the Co-op Group’s profit before tax increased 25 per cent to £65 million on the back of an improving business performance and reductions in its cost base.
Meanwhile, revenue was flat at £9.5 billion.
“Today’s results show how much progress we have made,” chief executive Steve Murrells said.
“All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.
“The success we are enjoying shows that the Co-op’s difference really resonates today – a different ownership model and a different approach to business, based on returning profits to our members and their communities.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future.”
In the Co-op’s grocery arm, like-for-like sales rose 3.4 per cent, while “core convenience” comparable sales were up 4.3 per cent.
Meanwhile, sales at its food arm were flat at £7.1 billion, which the Co-op attributed to its strategy to close larger stores.
Operating profit was also broadly flat at £202 million.
Finally, overall membership numbers at the mutual rose 15 per cent to 4.6 million.
“With profits up 25 per cent, debt down and membership up by more than 1.2 million since we launched our new scheme, we are stronger than ever before and ready to create a new, modern Co-op that is fit for the future,” chairman Allan Leighton said.
The company is still awaiting approval from the Competition and Markets Authority for its proposed £143 million takeover of convenience chain Nisa.