Spent Saturday at the Co-op Council meeting: where the main focus of discussion was the publication of our year-end results, which were published last week. You can see the full report at https://assets.ctfassets.net/5ywmq66472jr/4Xi9Pw36VOEkmE2yqZhCQT/4d716091dec9e6e8832a357c718ca47b/Co-op_Annual_Report_2018.pdf
Overall our underlying profit result was flat year on year. But with strong growth in food sales and an increased Profit Before Tax line the reception in the financial press has been very positive. Food’s performance was outstanding with like for like sales up 4.4% – well ahead of the market – and the addition of NISA taking the Co-op’s total turnover to over £10 billion for the first time since we disposed of the Co-operative Bank. Funeralcare results were a little disappointing, with a drop in market share and profitability impacted by our introduction of lower-cost funeral options. However, we still have a very strong platform and many opportunities in that sector and I am confident that we will see that part of our business turn around.
It was very pleasing that the press gave plenty of coverage to other aspects of our performance too, recognising in particular the work we are doing to address crime levels in local communities, the investment by our pension trustees in social housing and the expansion of our network of academies. This year we published the Co-op Way report at the same time as our financial results – which is something I have pushed for over the last couple of years. There’s lots more interesting and encouraging news to draw out from that report, which I will cover in a future blog post.
The Council session also spent a lot of time looking at our work on leadership and colleague culture as well as reviewing remuneration policies which are covered in huge detail in the Annual Report.
During the Directors Q&A sessions we were challenged on a number of areas, including:
- Progress on our IT transformation programme in the Food division (slipping behind schedule which will increase cost and delay service improvements – but we need to take the time required to get it right).
- Reactions to the Grocery Code Adjudicator’s report and whether we were confident that our house was being put in order now: as previously declared, we had got things wrong but were working hard to make sure we treated suppliers well.
- Colleague security: a continuing area of concern, in which we continued to invest time and money.
- Whether it was easier to report to shareholders or to members: we find Council questioning ranges far wider than that of financially-focused shareholders, and appreciate the fact that members take a longer term and broader perspective
Altogether a very positive day, and I very much hope that it does not prove to be my last Council meeting, as the next one will not be until after our AGM in May when I hope to be re-elected!