AGM 2019 & Our Society Performance

I wanted to use my blog this week to tell you ahead of my speech to the AGM tomorrow how the Society has performed over the last year.

The good news is most of our businesses have continued to perform well. This is particularly encouraging given the increasing economic uncertainty caused by Brexit and declining consumer confidence. The overall result, however, has been negatively impacted by the energy market and losses recorded by our Energy business.

Our Food Retail, Travel and Funeral businesses have all generated profits equivalent to last year but with increased costs. These have included above-inflation increases in the national living wage and in Food Retail the disruption caused to our distribution network by the weather storm, the ‘Beast from the East’.  Our Childcare business has also seen significant growth with parents responding positively to the ‘Little Pioneers’ branding we have introduced to eight of our nurseries.

However, our Healthcare business has not improved on its performance from last year and has registered a small loss. As a result, we are undertaking a strategic review of the business. This includes expanding our online doctor’s service and looking at the future of our pharmacy branches.

In addition, and as advised at the half year meetings, our Energy business has recorded a significant loss. This is due to a complex range of factors including rising wholesale costs, record switching rates, greater price competitiveness and the effects of the recently introduced government price-cap. These issues have been reflected across the industry, with most energy companies reporting losses and some ceasing to trade.

As a result, the Society’s overall financial performance in the second half of the year has been below our target. If you exclude Energy the combined profitability of our other trading groups was £16.5m before tax. This is ahead of both last year and our budget. However, when you take Energy into account our profitability fell to £8.2m before tax. This is despite gross sales for the Society increasing from £1.48bn to £1.55bn.

Unfortunately, conditions within the Energy market look unlikely to improve this year so the Board and the Management Team are considering a range of options to reduce the overall impact of the business on the Society.

Aside from our trading performance, there were a number of Society highlights of which I’m particularly proud. We welcomed The Phone Co-op to our portfolio of businesses, recruited our 700,000th member, were voted Leading Co-op of the year for a record third time and once again achieved a five-star rating in the BITC corporate responsibility index.

We also launched this website - ‘Colleagues Connect’.  The site, as well as acting as a one-stop shop for information on the Society, has also been very popular with colleagues combining things that are important to you with stories and business updates. This helped us achieve our highest ever engagement score in our annual colleague survey.

In terms of colleagues, I’m delighted to announce two new appointments. Clare Moore will join us later in the year in the newly-created role of Chief HR Officer. She will be joining from Halfords where she is Group People Director responsible for 11,000 colleagues. Her previous roles have included spells at Barclaycard, Rolls-Royce and Aston Martin Lagonda.

 Clare Moore, our future Chief HR Officer

To promote and develop our Co-operative Difference, I’m also pleased to announce that Pete Westall has been appointed as Chief Values Officer for the Society. Over the last 18 months, Pete has overseen a wide remit covering HR, learning & development, Society marketing, colleague communications and all our Co-operative Social Responsibility work. Pete will lead our development as a member-owned organisation through campaigns, events, community programs and corporate positioning.

These two appointments strengthen the Executive team and I’m sure you will join me in congratulating both Clare and Pete in their new roles.

I look forward to seeing you at the AGM tomorrow. For those of you not able to join us in person, I very much hope you will join us remotely as the AGM is being web streamed live here (this will be available from 1.00pm to the end of our formal meeting). In addition, the video highlights of my speech will be posted on Colleagues Connect.

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