Manchester-based Co-op Group said its 2023 profit before tax fell almost 90% to £28 million as the mutual’s group revenue fell £200 million to £11.3 billion and it announced further reductions in its net debt, which it has been cut by £827 million in the last two years.
“Group profit before tax in FY 2022 and consequently the variance in 2023 includes £319m profit on disposal following the strategic divestment of the petrol forecourt business,” said Co-op Group, which is owned by its member customers.
The group’s net debt fell to £82 million in 2023 — a decrease of £240 million year-on-year. The debt was over £900 million two years ago.
Underlying operating profit increased by £14 million or 17% to £97 million.
More than a million new member-owners joined the Co-op in 2023, increasing its active membership base to 5.2 million member-owners.
Co-op Group CEO Shirine Khoury-Haq’s total pay in 2023 was £1.689 million including a £844,000 bonus. Chief financial officer Rachel Izzard’s total pay was £454,000 including a £179,000 bonus. Group secretary and general counsel Dominic Kendal-Ward’s total pay was £626,000 including a £226,000 bonus.
Co-op Group said its food revenue fell about £500 million to £7.3 billion “driven primarily by the sale of the petrol forecourt business.” Food revenue was up 4.3% excluding the impact of the petrol forecourt sale.
Food underlying operating profit increased 11% year-on-year to £154 million “attributable to enhancements in cost efficiencies, including improvements in availability, waste reduction, optimised stock-holding, and overall reduction in our cost-to-serve.”
Online food sales continued to grow, rising to £311 million from £222 million.
Wholesale revenue grew by £39 million or 2.9%, to £1.4 billion “while profitability decreased to £13.2 million (2022: £21.2 million) due to investments in enhancing our proposition for retailers to ensure their ongoing competitiveness.”
Funeralcare revenue increased by £6 million to £281 million and profit before tax increased £2 million to £13 million.
The Co-op’s legal business saw revenue rise 47% year-on-year to £68 million and underlying operating profit rose 162% to £21 million. “Our largest practice areas of probate and estate planning demonstrated strong performances, with a 20% increase in probate cases and a 37% increase in new estate planning cases,” said the group.
Insurance revenue increased by £5 million to £29 million. “Growth was primarily driven by strong performance in travel and pet,” said the group. “Pet insurance sales increased 44% year-on-year, supported by our members’ input to shaping a differentiated offer for adopted pets.”
CEO 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 £900 million, to £82 million 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 8 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.”