Midlands Co-op Profits up by 25%

6 May 08

Midlands Co-op has announced trading profits for the 52-week year ending 26th January 2008 of £15.1m - up 25% on last year, with sales rising by just under 18%. Highlights of the year include:

• Sales of £800m – an increase of 18%

• Comparative trading profit of £15.1m showing an increase of 25%

• Over £25m of capital investment

• Net assets up to £297m – an all-time record

Total sales amounted to £800m and, despite another year of intense commercial challenges, all core businesses (Retail, Travel, Funeral, Property and Transport) reported an increase in sales, supported by the Society’s investment in people, trading outlets and services. The Society also continued its expansion through merger with Raunds Co-operative Society in August 2007, further demonstrating Midlands’ commitment to play a leading role in the development of a strong, financially sound, regional Society.

Retained profits for the year of £10m further enhanced the Society’s net assets to a record high of £297m.

Travel had its strongest year on record with total sales rising to £250m (from £185m in the previous year), reflecting the expansion of the business following the merger with Ilkeston Society for which travel was the main core business, and following the growth of our business travel section with the acquisition of Yorks Business Travel Management in Northampton.

Midlands Co-op Travel’s business strategy continues to be adapted with its shops offering the independent traveller value added service through its internal customer promise programme, the ongoing development of web-based sales and expansion of Co-op Breaks and Holidays – Midlands Co-op Travel’s own dynamically packaged holidays.

Ken Smith, General Manager for Midlands Co-op Travel said: “Growth was achieved predominantly in the second half of 2007 and into early 2008. This was as a result of the bad weather last summer and the message to book early in January for summer ’08 holidays.

“There has been growth in cruise and long-haul as well as foreign exchange sales in our high street travel shops.

“We have been particularly pleased with the growth of our on-line business – Holidays-Direct and its associated websites, including ski-direct and citybreaks-direct.

“Our experience currently is that despite the predicted credit crunch, customers continue to see their annual break as the one luxury item they are still planning and budgeting for.”

The Society’s Stakeholder strategy was introduced in 2004 to recognise and reward members, employees and the community and has seen distributions of £2.8m in the last twelve months.

In addition, employees succeeded in raising the outstanding sum of £250,000 for their corporate charity, the Alzheimer’s Society.

Commenting on the Society’s performance over the past 12 months, John Fitzgerald, Chief Executive, said: “I am delighted that the Society has produced such an outstanding set of results across all our businesses even though trading conditions remain challenging and against a backdrop of rising energy and utility costs, At the same time we have continued to invest in our employees, in our estate and in our infrastructure to ensure that we face the future with confidence. Midlands Co-op is in a very strong financial position, as evidenced by strong cash flows from operating activities and an extremely healthy balance sheet. The financial position is such that we can pursue our plans for expansion with conviction, and give full consideration to any business opportunities that might arise. Our position as the leading regional community retailer is assured.

“I should like to place on record my thanks to staff and members for their hard work and commitment to Midlands Co-op.”

Ends