Healthy trading performance despite challenging conditions

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Following a year of investment we've delivered a healthy trading performance in challenging conditions, despite overall sales and trading profits having fallen in the past year.

Our annual results for 2015/16 show a 0.9% decrease in turnover.  Profit before tax and distributions are up £3.3m to £7.8m, whilst the underlying trading profit dropped to £3.8m from £4.3m the year before. Members’ funds saw an increase of £16.2m to £233.1m.

Doug Field, Joint Chief Executive said: “This year our focus has been to ensure the long-term prosperity of our business, investing over £15m to improve our business and taking a number of difficult decisions.

“Looking to enhance the overall shopping experience for our members and customers, this investment included the refurbishment of 46 stores, the opening of four new food stores and 10 new post offices. 

“Extending our offering to our members and customers we also entered into new retail partnerships with Subway, Brantano and others, as well as expanded our trading area with new optical branches in Chelmsford and Braintree.”

The permanent closure of stores and the temporary closure of stores for refurbishment, contributed towards a 1% decrease in food sales. More positively, the majority of revitalised stores are seeing enhanced sales.

Our other businesses saw increased sales, with the exception of forecourts (due to the falling price of fuel) and the Distribution Centre (which saw a 2.2% decrease in sales) reflecting the challenging food retail market.

Our travel business did particularly well; an impressive 19.5% increase saw sales approach £5m for the year. Welcoming more tenants contributed to a 3.4% increase in income from our extensive property portfolio.

Our Funeral Services also saw year-on-year growth with sales up 4.8%. Doug commented: “This year’s sales growth was supported by the opening of 14 new funeral branches across the region as part of our plans to maintain and grow our market share. We now hold £35.9m of pre-need funerals which support the future growth of this area of the business.

“Our funeral business strategy not only focuses on new branches but has also seen us refit parts of existing food stores to create entirely separate funeral branches – ensuring we’re making the very best use of our property portfolio.”

Sourced Locally, the multi-award winning initiative, has seen continued success with a further 15% increase in yearly sales. Since Sourced Locally began in 2007, over £45m has been ploughed back into the local economy helping to protect many jobs in the region. 

Doug Field concluded: “Our performance this year has been underpinned by the continued hard work of our dedicated and professional colleagues."

“There is no doubt that 2016 is going to be a tough year, with the introduction of the National Living Wage and the removal of tax breaks for purchasing green energy. The new business tax for apprenticeships is also an additional cost in the future that’s beyond our control."

“However, we are committed to the continuation of the refurbishment of our existing stores, with the expansion of our funeral business also a key area of focus for the year ahead.”

Download our Annual Results here.