Manchester-based Co-op Group said on Thursday its first-half revenue was flat at £5.6 billion for the 26 weeks to July 2, 2022, while underlying EBITDA fell to £218 million from £248 million in the first half of 2021.

“Energy and wage inflation increased costs by around £50m versus H1 2021 before mitigating cost savings, and rates holidays in H1 2021 create a further £20m adverse variance,” said the Co-op.

“Strong cash flow management has generated a significant improvement in cash generation, with £189m reduction in net debt versus £162m increase in net debt over same period last year.

“The sale of our non-core petrol forecourt estate (completion due H2) will further reduce debt and allow headroom to reinvest in our core convenience business.”

In August, Co-op Group announced it sold its petrol forecourt estate to Leeds-based Asda for an enterprise value of £600 million.

Co-op Group CEO Shirine Khoury-Haq said: “Against a highly challenging economic backdrop, we have made significant progress in strengthening our balance sheet, whilst continuing to support the needs of our colleagues, members, customers and the communities in which we operate.

“Our clear focus on developing our businesses, whilst controlling costs, improving our cash-position and reducing debt is paying dividends.

“Looking ahead, while we are mindful of the continued economic challenges, we have great confidence in the underlying strength of the Co-op and all our businesses.”