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| Co-op Group says it 'planned' for a 50% profits drop | Co-op Group says it 'planned' for a 50% profits drop |
| (35 minutes later) | |
| Profits at the Co-op Group more than halved to £17m in the first six months of the year, hit by the group's three-year plan to rebuild the business. | Profits at the Co-op Group more than halved to £17m in the first six months of the year, hit by the group's three-year plan to rebuild the business. |
| It has also cut the value of its 20% stake in the Co-op Bank by £45m. | |
| The bank said in April it would remain unprofitable for about two years because of tough trading. | The bank said in April it would remain unprofitable for about two years because of tough trading. |
| Co-op group chief executive Richard Pennycook said the fall in profit "was expected and planned" because of its restructuring programme. | Co-op group chief executive Richard Pennycook said the fall in profit "was expected and planned" because of its restructuring programme. |
| The group announced a £1bn three-year Rebuild programme in 2014. | |
| "We are only half way through the Rebuild and much remains to be done, whether it is investing in our digital capability or campaigning on key issues," said Mr Pennycook. | |
| He said the group is "firmly on track" and that the work is attracting more customers back to the Co-op. | |
| Revenue increased by 2.2% to £4.7bn as customer transactions rose by 3.3% and like-for-like food sales climbed 3.1%. | |
| The underlying profit before tax, which excludes temporary factors and one-off items, was £31m for the six months, down from £63m in the same period of 2015. | |
| Membership offer | |
| The Co-op nearly collapsed in 2013 after the discovery of a £1.5bn "black hole" in its banking operation. But it has since sold around four-fifths of the bank and focused the business on re-establishing the Co-op as a mutual brand owned by its members. | |
| The Co-op has scrapped its famous dividend for the duration of the revamp, but is sending out new Co-op cards to customers to mark the launch of a new membership offer, "placing customers and communities firmly at the heart of the Co-op again". | |
| Members will receive a 5% reward every time they buy Co-op own-brand products and services, while a further 1% will go towards local causes. |