Acquisitions help Co-op to boost profits

THE Co-operative group is to pay a bumper dividend after its profits jumped 85 per cent in 2009.
Buying Somerfield helped the Co-op record a £402m profit while revenues surged by almost a third.

Dividends totalling £55m will be dished out to its members as a result of the profits hike.
The group merged its financial services business with Britannia as well as acquiring Somerfield in what chairman Peter Marks dubbed a “historic year”.

He said: “Our business has continued to thrive in spite of economic pressure, and I am pleased to report that we are on track with the integration of both Somerfield and Britannia.”

But he warned: “We expect the economic pressures to continue until the end of this year or the first half of 2011.”

Underlying like-for-like profits rose by three per cent to £174.3m in the company’s financial services arm.

Operating profits also rose in the Co-op’s funerals arm by 11.5 per cent to £43.7m
The Co-op – which has five million members and is the UK’s fifth largest grocery chain – saw profits at its pharmacy arm plunge by 21 per cent to £29.9m. However, sales across all divisions in the Co-op group rose 31 per cent to £13.7bn.

Marks added: “Sustaining the level of success we have enjoyed over recent years will not be easy. All of our businesses are operating in fiercely competitive markets which will only get tougher. We will be redoubling our efforts to help our customers.”

The Co-op traces its roots to the founding of the co-operative movement in Rochdale, northwest England, in 1844.