Crisis-hit Co-op reveals 2013 loss of £2.5bn
Britain's Co-operative Group made a loss of £2.5bn in 2013, in what the country's biggest mutual described as disastrous and the worst 12 months in its 150-year history.
Co-op, which was hit by a £1.9bn funding gap at its bank, a drugs scandal and an exodus of top executives, said on Thursday the results would serve as a wake-up call to the serious challenges that it faced.
"2013 was a disastrous year for The Co-operative Group, the worst in our 150-year history," Interim Chief Executive Richard Pennycook said of the supermarket to funeral services owner.
"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years."
Co-op said the losses reflected the cost of a £1.5bn recapitalisation of its bank last year and a decline in the value of stores it acquired in a £1.6bn deal in 2009 to take over the Somerfield grocery chain.
Co-op said it was still considering whether to inject more cash into the Co-operative Bank, which needs an extra £400m to cover the cost of past misconduct.
The group saw its stake in the bank fall to 30pc last year following a capital raising, with bondholders including U.S. hedge funds taking control. It would need to inject another £120m to retain that stake.
Co-op said the £163m that it still owes the bank from the first fundraising would be paid by the end of 2014.
Away from the bank, its core businesses delivered a "solid performance" in tough markets. Like-for-like sales in its food stores fell 0.2pc, while sales on the same basis in its core convenience chain rose 1.6pc.
Underlying profits in its funeral, pharmacy and general insurance businesses all edged higher.