Nisa buy-out a 'game changer' says Co-op chief as revenues hit £10b
By Scunthorpe Telegraph | Posted: 5 Apr 2019
The buy-out of Nisa has been described as a ‘game changer’ by Co-op chief executive Steve Murrells, as it posted a 14 per cent hike in revenues.
Turnover has hit £10.2 billion, with the uplift overwhelmingly driven by the £127 million acquisition of the Scunthorpe delivered wholesale and convenience retail specialist.
Nisa added £1 billion to the top line, 83 per cent of the total growth, with profit before tax up £20 million from 2017 to £93 million.
Reflecting on the huge deal for the enterprise founded by Grimsby businessman Dudley Ramsden 37 years ago, Mr Murrells, pictured below, said: “Over the past year we have continued to successfully transform the Co-op, leading to a 14 per cent increase in revenues to £10.2 billion and the return of £60 million directly to our members and £19 million to over 4,000 community projects across the UK.
“The acquisition and integration of the Nisa wholesale business has been a game changer in expanding our food footprint and we have also set out the path by which we can offer our members a broader range of compelling Co-op solutions in insurance and health.
“We continue to demonstrate that the Co-op is a good business that does good for society."
Net debt within the business rose due to the Nisa acquisition, completed last May, but remained below our £900 million debt ceiling target.
Allan Leighton, independent non-executive chair of the Co-op, said: “A year into launching our Stronger Co-op, Stronger Communities ambition and we continue to grow both sales and social impact. We have also made significant investments to further align our business with the needs of our members and deepen our understanding of the communities in which they live.
“In these uncertain economic times we have the opportunity to demonstrate that the Co-op Way of doing business has never been more relevant than it is today. With the continued support of our colleagues, members and communities, I have no doubt that we will thrive in the years ahead. I am confident and excited about the path we are following and the greater social impact we can create for our members and their communities.”
Looking ahead, it said capital expenditure of £414 million ensured that the Co-op is well positioned for future growth.
This has included £326 million within the Food business as it invested in new stores, refits and new infrastructure.
Results are showing too, with the fastest growth in seven years, and without the Nisa additions – which has opened up a major market for the Co-op own label range – it saw a 4.4 per cent sales increase.
Mr Murrells said: “The successful acquisition of Nisa and expansion of our wholesaling business has significantly grown our footprint and capacity, making Co-op products available to many thousands of new customers.”
It has also instigated major changes to supplier governance and processes and introduced a new supplier charter in line with the findings of a report by the Groceries Code Adjudicator recently into historical practices at the Co-op.
He added: “As we enter the 175th anniversary of UK consumer co-operation, we remain focused on the long-term growth of the Co-op and the positive role we can play in communities. Despite a challenging political and consumer backdrop, we are confident that we can continue to drive the Co-op’s commercial success and increase our social impact in the process.”