Britain’s Co-op looks to rebuild after return to profit

The Co-operative Group, a British supermarkets-to-funerals operator that almost collapsed in 2013, said it was rescued by selling assets and could now focus on rebuilding.

The Co-op reported pretax profit of £124 million for the year to January 3rd, against a loss of £255 million a year earlier, on revenue of £9.4 billion, helped by disposals. The mutually owned group said it had emerged from the rescue phase of a three-year turnaround as a slimmer business focused on its food stores, funerals, insurance and legal services. It has cut net debt to £808 million from £1.4 billion.

Chief executive Richard Pennycook said the hard work of rebuilding the group was now underway after the completion of its rescue plan.

“A significant element of our 2014 profit relates to one-off disposal gains on the sale of our farms and pharmacy businesses and property disposals,” he said. “Without these we would, at best, have broken even.”

It sold its pharmacy business to the privately owned Bestway Group for £620 million last July and raised £249 million by selling its farms to charitable body the Wellcome Trust in August.

Britain’s biggest mutual was bought to its knees by a series of blunders, including an ill-fated takeover of Britannia building society, in 2009, that resulted in it losing control of its banking arm.

It reported a loss of £2.5 billion in 2013, the worst in its 150-year history.– (Reuters)