Co-op boss Steve Murrells puts deals on the agenda as profits back in black

THE boss of the Co-operative, Steve Murrells, on Friday put deals back on the table as the rehabilitation of the grocer-cum-funeral parlours group continues.

“We’ve put the past behind us and we’ve got a growth agenda for the future,” said the chief executive.

The Co-op will expand into health and other financial products within insurance via online platforms, he added.

The news comes after the mutual, which today swung back to profits, has spent five years offloading several businesses, including its farms and pharmacies. It is going through a revival after slumping to a £2.5 billion loss in 2014 in the wake of the Paul Flowers Crystal Methodist scandal.

It made pre-tax profits of £72 million in the year to January 6, an improvement on the £132 million loss the year before, when the write-down of its stake in the troubled Co-op bank dragged it into the red.

Revenues for the group, which also has a legal business alongside its home and pet insurance offering, were flat at £9.5 billion.

Sales at the food business, which accounts for the bulk of Co-op’s earnings, were also stuck at £7.1 billion, but it was down to its decision to close larger stores. Same-store sales were up by 3.4%, posting its fourth year of consecutive growth.

“We are outside of the crisis of the High Street,” said Murrells, who forked out £140 million for convenience store chain Nisa last year.

The deal still needs to receive the go-head from the competition watchdog. It marks its intention to focus on smaller convenience stores rather than big supermarkets as grocers, including Tesco, struggle with changing shopping habits and growing operating costs.

In January the Co-op slashed prices on some of its products by more than 40% to lure shoppers from rivals such as Morrisons and Sainsbury’s after a £50 million investment.

The company also said it snapped up Simplify Probate, a legal business, for an undisclosed sum, to beef up its already competitive funeral offering, and adding to the woes of rivals such as Dignity.

“We’ve got 16% of the market, so 84% to go after,” said the chief executive.

The Co-op cut its prices in September and it insisted it will not put them up this year. Funeral and life planning revenue was up 4% to £343 million.