Co-op Group edges back to profit after banking losses

The Group said the half year results represented a group 'in transition'.

The results show an overall return to profit, following significant losses in 2013, which reflected the impact of The Co-operative Bank recapitalisation and impairment of goodwill relating to the acquisition of Somerfield.

Group capital expenditure fell to £99m (2013: £126m) following the Bank's separation and 're-focusing of strategic priorities'.

Richard Pennycook, Group Chief Executive of The Co-operative Group, said:

“2014 has marked a defining period for The Co-operative Group. We have delivered the changes we set out including fundamentally reforming our governance and we are developing clear plans to drive our success for the future. We took the tough decisions to re-shape our Group to ensure it is on a sustainable footing and the disposals of our Pharmacy, Farms and Sunwin Services businesses as part of this will repair our balance sheet. Our Group strategy is to build on our existing strengths as a convenience food retailer and to optimise the performance of our new Consumer Services Division, comprising of Funeralcare, General Insurance and Legal Services. We are now in a position to rebuild and restore the Group and can look to the future with greater confidence.

“At the same time, much remains to be done. These results clearly reflect an organisation in transition and show the scale of work necessary to restore the Group to full financial health. Underlying profitability in the business has been curtailed by the deliberate actions we are taking to implement our detailed rebuild plan and to face into the tough trading conditions prevailing in the markets in which we operate. Looking ahead, we are confident that we are doing the right things to ensure that the performance in all our businesses is what our millions of members and customers expect. By focusing on our customers, our members and their communities, we will revitalise The Co-operative Group.”