Co-op Group edges back into profit

The Co-operative Group has returned to profit in the first half of the year, after a series of major setbacks caused massive losses in 2013.

The group reported half year profits of £12m, compared with losses of £767m in the same period last year.

It has appointed Richard Pennycook as chief executive, and has started to implement a three-year turnaround plan.

Overall the Co-op made losses of £2.5bn last year, the worst results in the group's 150-year history.

Mr Pennycook said the latest results "clearly reflect an organisation in transition and show the scale of work necessary to restore the group to full financial health".

He became the group's interim chief executive in March after the previous boss, Euan Sutherland, resigned.

Radical reforms

While overall profit for the first half was improved, underlying profit, which excludes one-off gains from the sale of businesses, was down 43% to £66m.

Mr Pennycook blamed those weak profits on "tough trading conditions" and the expense of reorganising the company.

On Saturday group members voted to radically alter the governance structure of the Co-op.

The reforms include a reduction in the number of board members from 20 to 11 and the creation of a council to hold the board to account.

Efforts to turn the business around have included the sale of the Co-op's 774-strong pharmacy chain in July to cash-and-carry wholesaler Bestway Group.

The Co-op sold off its farm business to health charity the Wellcome Trust in August, and announced it had reached a deal to dispose of security firm Sunwin Services Group this week.