Midlands Co-operative Society continues its strong business performance with the announcement of its year end results to 26 January 2013, once again reporting the highest trading profit of any independent UK co-operative Society.
The Society maintains its resilience and financial strength in spite of economic challenges with an increase in trading profit in continuing businesses on the previous year, substantial capital investment and its highest ever stakeholder payout.
- Trading profit in continuing businesses (before exceptional items) of £24.3m, up 3.4%
- Payments to stakeholders of £4.3m up 7.9%
- Capital investment of £30.7m
- Gross sales in continuing activities up 2.9% to £670m
- Eighteen new openings, including 15 retail stores and three funeral homes
- Continued recognition of excellence through national awards
Chief Executive Martyn Cheatle said: “It’s two years since Midlands Co-operative Society launched its five year ‘One Vision’ strategy which is underpinned by our core values, and we have already achieved many of our business objectives. Over the last year we have added 18 new sites to our portfolio resulting in an additional £75million in annual turnover and creating 300 new jobs. We’ve also improved our sales and trading profit in continuing business, invested significantly in the future of our core businesses and paid out over £4million to our stakeholders. Our latest annual staff attitude survey shows colleagues have a high level of engagement with our vision and recognition at a series of national industry awards illustrates our high operating standards which, together with our strategy, I believe places the Society in a very strong position for continued success over the next year and beyond.”
Food retail, which remains the Society’s largest business, once again performed strongly, helped by the introduction of a new Sales Based Ordering system which has further improved product availability. The Society also maintained its high customer satisfaction levels at 96%. The year saw the opening of fifteen new food sites which is the highest ever for the Society, including the acquisition of Shaws fuel forecourt and convenience business which included five sites extending the Society’s trading area northward. Plans were also put in place for similarly ambitious growth in 2013. In addition to new sites, investment in the existing estate continues to generate sales growth with 19 refurbishments completed during the year as part of a rolling programme which will maintain high standards across the Society’s retail food business.
High street retailers have faced unprecedented challenges due to the economic climate, the rise in online shopping and change in shopping habits and these changes continued to impact on the Society’s Fashion & Home business. The deterioration in trading performance, in spite of considerable efforts to reverse it, resulted in the Society’s Board of Directors taking the difficult decision to close this business during 2013 in order to protect the long term interests of the Society.
The Society’s Funeral business showed considerable growth with an increase in funerals conducted against a continuing declining death rate, as well as the opening of three new funeral homes in Countesthorpe, Aylestone and Bromsgrove. Following the acquisition of Bretby Crematorium the Society has invested £250,000 helping the site to conduct its highest ever number of services during the year. The Society’s development and launch of ‘The Co-operative Florist’ brand has been a major success and the brand has now been rolled out across a number of shops, following its very first appearance in Leicester. Investment was also made in the existing estate through refurbishments, the vehicle fleet, and colleague development which aims to help the Society realise its aim of becoming the region’s leading funeralcare provider.
As with last year, stakeholder groups of members, employees and communities benefited from the success of the Society’s performance by sharing in a £4.3m payout. The Society’s strong financial performance has also meant that the 10% increase in dividend rate approved by members last year will be maintained for the Society’s next payout.
The Society’s drive for continuous improvement was also recognised through a number of high profile industry awards which included two at the Convenience Tracking Programme Awards for the Retail team plus a range of others for other business areas including its industry-leading Zero Waste to Landfill initiative and external and internal communications.
Initiatives like Zero to Landfill are driven by the Society’s ethical values and, building on work to date, the Society introduced a new Corporate Responsibility strategy which will drive new projects and focus activity on areas of greatest influence and impact. The Society has already made great strides in this area, having just been awarded bronze in the Business in the Community coveted Corporate Responsibility Index on our first year of entry – an achievement which the Society will be looking to improve on over the coming years.
Martyn Cheatle continued: “Once again we’ve delivered a robust financial performance in the face of a weak economy and really demonstrated the strength of the co-operative model, which is particularly pleasing since 2012 was the United Nations International Year of Co-operatives. Our continued success is also inspiring others to find out more about what co-operation has to offer which is great news for us and the co-operative movement which is made up of one billion people world wide.”