Coop plans to halve dividend rate as it posts net loss

Saturday 04 May 2024

Profits were up at CI Coop but it reported a higher net loss than the previous year.

The retailers’ latest annual report shows profits increased to £7.5m in the year up to January 2024 – a £1.7m increase on 2023 – but posted a higher net loss of £1.8m after dividend, interest and the “revaluation of investment properties”.

This was despite an increased turnover of 8.4% compared to the previous year. 

It has also proposed a 2% dividend following a review which will be voted on at its members’ meeting this month, after warning earlier in the year it may remove the benefit altogether.  

Shareholder dividend has been set a 4% for over four decades. 

That announcement in February led to long queues of customers in stores across the Channel Islands withdrawing the balance from their accounts.  

Chair John Bond noted that the firm has been hit by global economic stress since 2020 but insisted the financial position is strong, reflected in the balance sheet and over £150m of remaining member funds on the books.  

On the proposed 2% dividend, he said the CI Coop “have taken the time to thoroughly review what is in the best interests of our member owners and our ability to sustainably pay a dividend despite the impact of world events on our profits in the last year”.  

CEO Mark Cox added that the business has faced “substantial hurdles” including inflation, interest rate increases, and supply chain pressures since 2023. 

“We recognise that our announcement earlier in the year regarding dividend payments caused some concern however I am delighted that after a period of review we have been able to ensure we can make a payment to our member owners, I would like to record my thanks to all our member owners and colleagues for their understanding, loyalty, and continued commitment to our CI Coop,” he said. 

Pictured: Coop CEO, Mark Cox.

Members reduced from 128,269 to 122,394 between 2023 and 2024, with £5.3m paid out in dividend last year.  

Dividend will be reduced to £3m in 2024 if members agree to the Board’s reduction in rate. 

Food and fuel sales increased to £191.5m, in part driven by inflation.  

Looking forward, the CI Coop plans to continue with modernisation programmes, greater pharmacy rollout and a new member rewards scheme.  

“However, despite our concerted efforts and ongoing operational adjustments to combat inflation, we've faced a significant loss this year. Consequently we’ve had to make some tough decisions, including reducing dividend, suspending bonus payments, and investing margin to enhance the value we provide to our members,” Mr Cox said. 

“Our primary goal is to regain stronger financial performance, enabling us to appropriately reward our loyal members and customers. 

"Despite the challenges we faced, there's ample reason for pride, particularly in our commitment to making a real difference to the communities we serve,” Mr Cox added. 

£148,000 was donated, over 500 hours of volunteering offered, hundreds of thousands of food waste distributed and multi-million-pound spending with local and fairtrade suppliers was delivered in the period.