Martin Beaumont, the new chief executive of the UK Co-operative Group, has plenty to be happy about in his first week in the post. Taking over from Sir Graham Melmoth, one of the first tasks he faced was the announcement of a strong 67 per cent increase in operating profit for the first half of 2002.
Beaumont, the former chief executive of United Co-operative Society, has joined the Co-op as it begins to see the benefits of a major restructuring of its retail and financial services businesses and a return to its co-operative roots.
Operating profit for the six months to 29 June reached £113.9 million (€181.5m), while group profits as a whole rose by more than £1 billion to £3.6 billion as a result of the integration of the CIS insurance subsidiary and a 4 per cent rise in like-for-like food sales.
"This is an exciting time to take up the baton as chief executive and build on the progress of the last few years," said Beaumont. "We now need to raise our game still further to improve our business performance so that we can unlock the group's future potential for the benefit of its members, employees and the wider community. This we will do through our focus on an integrated group strategy that embraces business, brand, people and stakeholder strategies."
Profits from the Co-op's trading activities increased by 40.9 per cent to £33.1 million, with the food retail unit accounting for most of the profits and the growth.
Food retail sales rose 3.9 per cent to £1.1 billion, with like-for-like sales up by the same amount, in line with the market. Most of this growth came from both the convenience sector and Co-op's larger Market Town stores.
The half also saw an upturn in acquisitions, with two chains being bought - GT Smith (13 stores in West Yorkshire) and Williams (seven stores in East Yorkshire) - plus a number of individual stores, including stores from Costcutter, Londis and Spar. In addition, the new opening and refurbishment programme proceeded on plan.
Sales were also driven ahead in the first half by the completion of the roll-out of loyalty card Dividend and the introduction of a new dividend scheme - replacing the former dividend of 5 per cent on own brand and fresh food with 3 per cent on those products, plus 1 per cent on all other products.
But Co-op's participation in the food industry is not solely as a retailer - it is also a producer, and that division fared less well during the half.
The collapse in cheese prices since the year end, following stockpiling post foot-and-mouth, impacted the group's milk processing results, but the company said it hoped that proposed acquisitions, as well as a number of disposals in this area, would help strengthen the processing arm in the future.
After a long period of reorganisation for the Co-op, things really do appear to be looking up. It is keen to extend its food retail business, and is reported to have made a bid just last week for ailing convenience store group Alldays, which could add a further 600 stores to the portfolio.