Co-operative Group is back in profit as it confirms Richard Pennycook as chief executive

 
Emma Haslett
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Richard Pennycook has been appointed as the Co-operative's full-time chief executive (Source: The Co-operative Group)

The troubled Co-operative Group has made interim chief executive Richard Pennycook will take on the role full-time.

Pennycook was promoted from his position of chief financial officer in March after the surprise resignation of Euan Sutherland. His appointment is likely to give the group's investors - including the hedge fund owners of its banking arm - confidence that someone with a financial background is at the helm.

The announcement came as the group posted results showing it was back in the black, with group comprehensive income, measure of pre-tax profit, rising to £116m in the six months to the end of July. This marked a reversal of fortunes from a £1bn loss last year.

However operating profit fell to £43m, down from £105m during the same period last year while sales fell to £5.1bn, from £5.3bn.

The group has spent the past year trying to plug a £1.5bn hole in its balance sheet, uncovered last summer, and repair the PR damage done by the Reverend Paul Flowers. Having brought about the rescue of its banking arm by selling a sizeable chunk of the business to a group of hedge funds, it then set about offloading non-core assets including its farms, pharmacies and, this week, Sunwin Services, its cash security business.

Sales in its food business, which includes its farms, increased one per cent on a like-for-like basis, although underlying profits fell 8.2 per cent to £107.4m. Underlying profits at its funeralcare business fell 15.5 per cent on sales of £187m.

Ursula Lidbetter, the Co-op's chairman, said Pennycook had done a "first-class job" over the past six months.

He has a commitment to Co-operative values and principles and has built a strong rapport with our members.

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