Co-op Group swings to £132m loss as it writes off bank stake

The Co-operative Group said it swung to a loss in the 52 weeks to the end of December as it wrote down the value of its 20% stake in the Co-op Bank.

The company reported a loss before tax of £132m versus a £23m profit in 2015, as it reduced the carrying value of its stake in the Co-op Bank to zero from £185m the year before, and as its finance costs rose by £74m.

"Given that the bank is in a sale process, the consideration to be received for our share is obviously volatile and potentially has a large range of options and we believe this is a prudent valuation," it said.

Operating profit, which does not include the loss related to the bank, came in at £148m, up from £112m the year before, driven by £20m profit on disposals.

Meanwhile, group revenue was up 3% to £9.5bn, with Food, Funeralcare and Insurance all delivering strong levels of growth.

Chief executive Steve Murrells said: "We’ve made great progress in rebuilding our Co-op, with all our businesses delivering strong performances. While much remains to be done, our rebuild plans have really started to deliver value for our customers, our members and their communities. That is exactly what the Co-op should be doing.

“Against this backdrop, 2017 sees us turning our attention to the next phase of our development. Our ambition will remain the same - championing a better way of doing business in communities up and down the country. We will continue to take our existing businesses forward and ensure they are ready for the digital age, but we will also look wider than our current markets. We are exploring how we can enter markets that are not serving people well and challenging existing providers."

The company opened 112 new stores in 2016 and refitted 155 with its latest format. It also rebranded a further 607 stores. By the end of the year, it had 2,774 stores, down a touch from 2,803 in 2015.