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Co-op profits rise sharply

Nigel Cope
Tuesday 04 May 1999 23:02 BST
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THE CO-OPERATIVE Wholesale Society yesterday reported a sharp rise in profits and said it had no plans to seek a merger with its sister group, Co-operative Retail Services.

Graham Melmoth, the CWS chief executive who saw off a break-up bid from Andrew Regan two years ago, also said he had received no contact from Babcock & Brown, an American finance group which is rumoured to be sizing up a possible bid. "Their interest seems real enough but they have not been in contact," he said. He added that he has not put his banking advisers on bid alert and repeated the assertion that the CWS "is not for sale".

The comments came as CWS reported a 23 per cent increase in operating profits to pounds 113m for last year. Though the Co-operative Bank was still the best performer, the CWS's struggling food-retailing division saw some improvement. Like-for-like sales in the 640 stores rose by 4.2 per cent on last year. Sales were strong over Christmas when Co-op shoppers have traditionally defected to Tesco and Sainsbury's. Mr Melmoth said the national roll-out of the dividend card last year helped keep customers loyal.

Food retailing profits increased from pounds 33m to pounds 34m. In funerals a lower death rate hit profits though market share increased following acquisitions.

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