Nisa helps drive The Co-op to £5b sales in first half of 2018

By Scunthorpe Telegraph | Posted: 14 Sep 2018

Strong food sales and the acquisition of Scunthorpe-based specialist delivered wholesaler Nisa have been credited with increasing The Co-op’s sales to £5 billion for the first half of 2018.

The 10 per cent uplift, with profits and member value all up, was revealed as half year results were posted today.

Steve Murrells, chief executive, said: “We’re moving forward at pace with our Stronger Co-op, Stronger Communities plan, which we set out at the beginning of the year. We know that in order to make a difference, we have to be commercially successful and our performance in the first half shows that we’re delivering on that ambition. Our investment in products, price and distribution channels has seen us grow revenue, profit and member value in the first six months.

“Our Co-op presence is strengthened through the acquisition of Nisa and The Co-op now supplies food to over 7,700 stores. By the end of 2018 we will supply 850 Co-op own-brand product lines to our Nisa partners.”

Read more: Nisa-buying Co-op's results welcomed as boss underlines how he is "hungry for more"

Group profit before tax increased to £26 million, up from £14 million in 2017, with food retail sales up 4.4 per cent.

Mr Murrells said: “The most significant way we’re expanding the reach of Co-op is through wholesaling with the acquisition of Nisa and our five-year commercial deal to supply Costcutter Supermarkets Group. With our existing arrangements with independent co-operative societies, through our joint buying group, it takes the total number of stores we supply to around 7,700. By the end of the year we’ll be supplying Nisa partners with 850 Co-op product lines and we’re seeing an increase in Nisa partner recruitment. In May we appointed Ken Towle as the new chief executive of Nisa, and Ken also joins our Food executive team.

“We are reporting our Wholesale business separately from our Food business. This business generated sales of £269 million in the period following the acquisition of Nisa and made an operating loss of £5 million, which mainly relates to costs of buying the business.

The report details how £52 million of assets were acquired in the £127 million deal, completed on May 8, with half of that relating to the property, plant and equipment.

“Our acquisition of Nisa and the commercial agreement to supply Costcutter will greatly expand our food wholesale operation and take our brand into thousands of new stores and hundreds of thousands of new homes,” Mr Murrells added. 

Read more: 400 jobs to go at British Steel as business streamlines office roles

The Co-op has now enjoyed 18 consecutive quarters of like-for-like sales growth.

The acquisition of Dimec, a healthcare technology start-up has also been announced, marking The Co-op’s return into the healthcare sector. Dimec has developed a unique digital solution that enables patients and their GPs to interact and better manage their prescription needs.

Dimec has been acquired for an undisclosed sum by Co-op Ventures, the new innovation unit established to develop challenger Co-op businesses and disrupt markets in which it does not currently operate.

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