This week has been dominated by preparations for the release of the Co-op Group annual results for 2016 on Thursday.
The headlines have predictably focused on the decision to write down the value of our holding in the Co-operative Bank to nil. Although the headlines say this means we just get it to be “worthless”, in fact it simply points to the impossibility of being able to put a clear value on the shares at a time when a sale is in prospect and uncertainty is being fuelled by (often misleading) press speculation.
The newsworthiness of this item and the fact that the write-down turned our year end profit into a loss have hidden a lot of other good news:
- All three of our core businesses (Food, Funerals and Insurance) have shown growth in both sales and market share.
- Strong uptake of our new membership scheme, and re-engagement of many members with the Society.
- Operating profit was up 32% year on year.
- Underlying profit before tax was slightly down on last year, but ahead of our budget and unsurprising given the scale of re-investment we are making across our businesses and in re-launching our brand and membership proposition.
The full press release can be found here.
Our markets remain fiercely competitive, of course, so the next couple of years will be challenging. Nevertheless we now have a stable and much stronger platform from which to develop and launch our plans for the future. It was interesting that the BBC coverage ended up focusing on what markets the Co-op might choose to enter next and disrupt. That’s quite a change from just three years ago when everyone was wondering whether the Group could even survive!