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Co-op has returned to the black as it boosted food sales and grew membership numbers by almost a million year on year.
Group revenues in the first half of 2024 increased 1.5% to £5.6bn, with food sales up 3.2% to £3.7bn.
Co-op said it had experienced “strong” sales across its food stores and online as the retailer invested another £55m in pricing, with £34m of that targeted at members.
It also registered a 20% growth in the number of active members to 5.5 million and said it was “firmly on target” to reach 8 million members by 2030.
Q-commerce sales soared 62% in the half to £217m as the group became the largest grocery provider on Deliveroo, Just Eat and Uber.
However, wholesale revenues fell 2.9% in the period to £700m, with the division falling to a loss of £8m as it invested in lowering prices across hundreds of products to support its partners in “an increasingly challenging market”.
Leakage costs associated with theft and fraud also jumped by 19% to £39.5m as The Co-op continues to campaign for more to be done on retail crime.
Underlying operating profits in the food division, which is the largest part of the group, increased 10% to £85m, despite £39m going towards pay increases for staff and the further investment in lowering prices.
It helped underlying operating profits at the group nudge up by £4m to £47m as membership and q-commerce growth offset ongoing inflationary headwinds.
And the group returned to a pre-tax profit of £58m, compared with a £33m loss in the same period last year, driven by lower interest payments and a reduction in exceptional costs.
Co-op also further reduced net debt by £55m to £42m.
Chairwoman Debbie White said the results demonstrated how much progress had been made over the past six months.
CEO Shirine Khoury-Haq called it “a strong performance” as the strategy started to gain real momentum.
“lthough the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets while significantly increasing our investments in our colleagues, pricing and in the growth of our businesses,” she added.
Morning update
Kitwave has acquired family-owned food wholesaler Creed Catering Supplies in a £70m deal.
It will pay £60m in cash initially and a further £10m over two years dependent on performance target being hit.
The group also separately raised £31.5m in a placing at 305p a share to help fund the deal.
Creed generated annual revenues of £124m and a pre-tax profit of £7.8m in 2023.
West African agribusiness Dekel Agri-Vision has announced a 10% fall in first-half revenues to €18.6m as crude palm oil prices decreased.
However, the group increased EBITDA by 12% to €3.7m thanks to “continued prudent cost control” during the ongoing inflationary environment.
The FTSE 100 is down 0.3% to 8,258.77pts this morning.
Early risers included Hilton Food Group, up 2.2% to 899p, and THG, up 1.8% to 53.5p.
Shares in AG Barr nudged up 0.2% to 607p after the stock sank 8.5% to 606p on Tuesday despite the soft drinks maker reporting positive first-half results.
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