Despite a challenging economic backdrop, Co-op has delivered a robust sales performance, with revenues marginally down on H1 2022, driven by lower revenue in the food retail business, resulting from the impact of the petrol forecourt sale, according to the results announced today (21).
Underlying operating profit increased by £44m, driven by annualisation of £101m cost savings achieved in 2022 and further cost savings in H1 2023, streamlining operational processes and realising the benefits of lower costs to serve as a result of previous investments in supply chain infrastructure and IT systems.
Underlying loss before tax of £9m, £59m less than H1 2022, helping mitigate inflationary headwinds and invest in our members, colleagues and communities.
Continued work to strengthen the balance sheet, resulting in a net debt of £123m, a substantial reduction of £608m on H1 2022. Focused intent on growth of our most profitable channels delivering an additional £35m cash from operations, Co-op stated.
Reiterating its aim to provide additional support amidst the cost-of-living crisis, Co-op stated that it invested £20 million in H1, with a further additional £70m investment announced in July, to ensure lower pricing across key lines. It also invested £5m in extending its 30 per cent colleague discount on Co-op branded products in food retail stores to the end of the year and a further £4m in winter support payments to colleagues in Q1.
Commenting on the figures, Shirine Khoury-Haq, Chief Executive of the Co-op, said, “I am very proud of our success over the last six months, particularly given the prevailing economic and market conditions. This performance wouldn’t have been possible had we not taken the decisions we did, as early as we did in 2022, when it came to better management of our members’ money and running the business more efficiently.
“While the economic environment remains challenging, we have again improved our underlying financial strength, significantly grown our membership base and delivered more for our members and their communities. We have done this while staying true to our Rochdale Principles, cooperating through partnerships and campaigning on topics which matter to our members most. We have invested heavily in supporting our members, communities, colleagues and customers through the cost-of-living crisis, and we will continue to do so.
“The business momentum established in the second half of the last financial year has carried through into the first six months of 2023 and has allowed us to significantly strengthen our membership offer and proposition – we have put our member-owners at the heart of what we do. We have listened to what they need, and we have not hesitated in our response.”