Co-op has reported a small increase in revenue, up £0.3bn to £11.5bn, however has warned that ongoing inflation will continue to affect its profit.
In the 52 weeks to 31 December 2022, the convenience retailer saw underlying EBITDA down by £15m to £490m and maintained its underlying operating profit at £100m.
However, group profit before tax for the period saw a rise of £190m to £247m and food revenue was up by £134m to £150m.
Co-op said that despite these “very challenging markets” it absorbed £100m of additional energy and salary inflation and invested £37m in the fourth quarter to hold prices on key products.
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It added that it was impacted by the sale of its petrol forecourts, with reveue £150m down and underlying profit £10m lower as a result of the sale.
Last August, Asda purchased all 132 petrol forecourt sites from Co-op, and if the deal is accepted by the CMA, this is expected to generate net proceeds of £408m and reduce lease commitments by £171m.
While the board has said it “remains confident” in its strategy to drive growth through the core business, it expects the “volitile external environment and turbulent economic headwinds, including inflationary pressures to continue.”
Co-op chief executive, Shirine Khoury-Haq said: “It’s clear that our early action to significantly reduce our debt, improve our cash position, and tighten cost controls, has made a significant difference to the financial strength of our Co-op and has enabled us to look forward with confidence, despite continuing market uncertainty.”
She said that Co-op now has a “better foundation” to grow its business, which will see it looking to grow its membership, “with ambitious plans to both attract new members, and deepen relationships with existing members.”
Co-op chair, Allan Leighton agreed that its future focus on growing membership is “vital for ensuring the future success” of Co-op, “for generations to come.”
He added: “The inflationary challenges facing most consumer-facing businesses are well known, so for our Co-op to have delivered this level of performance over the year is encouraging.
“We are, rightly, judged by our members on both the financial and social value we can create and it’s clear that we’ve delivered on both sides of this equation.”
