Turnover and trading profit is up at East of England Co-operative, which credits a strategy to invest in its “business, people and properties for long-term prosperity” for healthy 2016/17 results.
The retailer, which has 275,000 members and over 230 trading outlets across Norfolk, Suffolk, Essex and Cambridgeshire, has announced that 2016/17 turnover increased by 2.8% to 347.7m (2016: 338.5m), while underlying trading profit increased by 17.1% to £4.4m (2016: £3.8m). Profit before tax and distributions are down from £7.8 to £6.1m and its members’ fund decreased by £25.6m to £207.5m.
However profit before distributions and taxation was down 22% to £6.1m (2016: £7.8m), with profit for the financial year down 54% to £1.9m (2016: £4.2m). This, says the society, was due to a £0.6m write-off of goodwill and assets relating to a number of optical branches and food stores; a reduction in investment income from funeral bonds of £1.4m; and no profits being realised on disposal of property this year, compared with £2.8m last year.
Despite lower margins, the East of England Co-op’s food, distribution, travel, forecourts, optical and property businesses all saw an increase in trading profits.
“We are delighted with our sales growth, especially in our food business which saw a 2.3% like-for like increase,” said Doug Field, joint chief executive. “This has been driven by a number of changes, including improved operational standards, employee engagement, store refurbishments and investment in technology.”
During 2016-17 the retailer refurbished a further 33 food stores in the region and opened its flagship new generation store in Woodbridge, Suffolk. East of England also expanded its Funeral Services business into Cambridgeshire for the first time with the opening of a new funeral branch in Ely.
There was a rise in the co-operative’s property portfolio revenue of 3.4% (£1.6m), taking the rental income over £7.3m, and on a comparable 52-week basis, its four forecourts saw a sales growth of 6.2%, selling an additional 1.4million litres of fuel. Its security business, Secure Response Services, saw sales more than double this year.
Profits from its funeral services business decreased, due to investment in new branches and a decrease in sales.
This year was also the 10th anniversary of East of England’s Sourced Locally, initiative, which saw a 4.1% increase in yearly sales to £17.5m. The scheme, which sees the retailer working in partnership with over 100 local producers and stocking thousands of products, has generated over £57m for the regional economy.
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“We are a people business and these results are testament to the true co-operative spirit and dedication of our 4,300 colleagues,” said Mr Field. “Thanks to their hard work, key investments and improvement in our standards across the board, we are reaping the awards with growth in both sales and trading profits.”
He added that the organisation would “remain focused on the three cornerstones of our business” – continuing its food strategy; continuing the expansion of its funeral services; and investing in its property estate.
“There will be inevitable new challenges ahead, but with our strategy firmly focused on future-proofing our business, we can, and will, continue to thrive.”
At its annual members’ meeting on 13 May, the society approved a £3m dividend payment to be shared among its 150,000 members.
Joint chief executive Minnie Moll said: “We’re delighted to be sharing a good dividend again this year. Since 2010 we’ve been able to give back 2p for every qualifying £1 spent by our members. This year we’ve seen a strong business result, particularly in our food stores despite challenging market conditions.”
The meeting also included the results of the vote for the election of board directors, with nine candidates standing for five available places. Judi Newman, Fiona Powell and Richard Youngs were appointed as new directors, while existing directors John Cook and Chris Newbury were re-elected.
Later this month, the board vote on on the replacement for society president Sally Chicken, who is taking time out from the Board to spend more time with her family.
Ms Chicken, who has been a director since 2009, will continue her credit union activity and helping to lead the Shotley Pier restoration project.
The society will also be saying “a fond farewell” to Colin Barrett, vice president on the board, after 23 years’ service.
- A full breakdown of the East of England Co-operative’s audited figures is now available online at www.eastofengland.coop/annual-report-and-accounts
