Operating review
Overview
The retail environment continues to be challenging across the country and the East of England is faring no differently.
In a year with significant disruption, we have been able to generate an underlying trading profit from continuing operations of £2.0m, an increase of £1.0m from last year’s results. This marks a third successive year of increasing profitability and demonstrates the positive actions of colleagues across the Society.
As a result of the positive trading result and growth in our property portfolio, members’ funds have grown by £1.1m.
Turnover
Sales have reduced by 4.6%
Sales have decreased by £17.9m compared with the prior year. This result is expected in line with the decisions being taken by the Society to focus on our convenience offering.
Food sales down 4.6%
Food sales have decreased by £14.9m, partly as a result of active decision making to rationalise the trading estate to focus on driving higher profitability.
£9.2m Property income
Investment property income has increased by £1.2m compared to the prior year. A strong indicator of improvements in the management of our portfolio.
£0.2m increase in Funeral sales
The funeral market faces considerable pressures as customers move more towards lower cost funerals but, through careful review, we have protected our position and achieved a slight increase of £0.2m in sales but suffered a slight reduction in margin.
Looking at other parts of our business, Petrol filling stations saw sales fall by 10.4%. Travel sales reduced by 2.2% and Co-op Secure Response rose by 4.1%.
Profitability
Underlying trading profit £2.0m
Our underlying trading profit improved by £1.0m year on year.
The margin from our food business increased by 0.5%, a result of continued focus on the right products.
Property and Travel continue to deliver a positive contribution and, this year, Funeral has turned from a loss to a profit.
Continued focus on managing costs has ensured that our general and administrative costs have reduced year on year.
Members’ funds
Members’ funds £230.7m up £1.1m
The continued underlying trading profit alongside growth in the values of our property portfolio and in the assets of our defined benefit pension scheme have led to an overall increase in members’ funds.
Cash flow
Our net cash decreased by £7.7m
At the year-end we had net debt of £20.8m compared with £13.1m last year.
We continued to invest across our business with new food stores in Ipswich, Hellesdon in Norfolk, as well as refurbishment of some other stores in our estate; development of new houses in Witham that will be ready for rental in 2026 and significant investment in our technology. The focus has been on ensuring the Society is preparing for the future and improving our processes.
The Society continues to use its overdraft to manage its working capital requirements and a revolving credit facility to support capital investment. We work closely with our bank on ensuring that we maintain our net debt in line with our covenants.
