Co-op issues profit warning for 2023
The Co-operative chair Alan Leighton has said that group profits in 2023 are likely to fall, warning of “another year of economic uncertainty and higher prices”.
This comes alongside the group’s financial results for 2022, with the Co-op seeing an increase in revenue of £0.3bn, however its underlying operating profit was unchanged from 2021, remaining at £100m.
The co-op said entered 2022 targeted cost savings of £50m, but in recognition of a challenging economic environment this was raised to £101m, which was met.
The group said the sale of its petrol forecourt business in October meant that group revenue and profit took hits of £150m and £10m respectively. However this contributed to a reduction in net debt for the group, down to £333m by the end of 2022, compared to £920m a year prior.
It added that active Co-op memberships had grown for the first time in five years to 4.41 million members. The group has set a target of welcoming one million new members over the next five years.
Co-op said its board remains confident in its strategy as it looks to drive growth through its core businesses via physical and digital routes.
“We expect the volatile external environment and turbulent economic headwinds, including inflationary pressures, to continue. However, the early action taken last year to strengthen the Co-op’s financial position, leaves our Co-op well placed to face into, whilst not being immune from, such headwinds. Costs arising from this are expected to dampen profitability in the short-term”, the group said.