SCOTMID has shrugged off this summer’s patchy weather to post in an increase in first-half profits.
The grocery, toiletries, funeral and property co-operative made a trading profit of £2.5 million for the 26 weeks ended July 27, up eight per cent on the first half of last year.
The growth in profits came in spite of a tough comparison with last year, when record-breaking temperatures and the football World Cup sparked a significant rise in sales of items such as soft drinks, beer, ice-cream and barbecue foods in the co-operative’s convenience grocery stores.
Edinburgh-based Scotmid also produced a £3m rise in turnover to £190m for the first half of this year, as it cited improvements to its product range through the work of the wider Co-operative buying group it is part of, and the results from its “famous for food” strategy.
Chief executive John Brodie described the results as a “strong performance, given all the uncertainty around last year, when we had the benefit of a record-breaking summer.”
The co-operative, which has around 180 Scotmid convenience stores in Scotland and runs the Semichem toiletries chain, said first-half results were also underpinned by new lettings and rental income growth at its property division.
Scotmid noted its property portfolio generated income at a record level in the first half, driven by the residential and commercial sectors, without providing a figure.
The co-operative’s commercial property portfolio includes investments in retail outlets, offices and trade counters. Mr Brodie said its retail property is largely focused on “blue chip tenants”, which means the portfolio is more “resilient… in terms of its retail component”.
Elsewhere, Mr Brodie said “successful cost control” had helped the Semichem chain, which numbers around 90 stores across Scotland, Northern Ireland and the north of England, hold its position. This was despite “significant market challenges for non-food retailers,” Mr Brodie said.
However, he warned that the chain, which has traditionally benefited from a degree of cross-border trading between Northern Ireland and the Republic of Ireland, is dealing with difficult trading conditions across the Irish Sea.
“Economically, it is more challenging [than what] we are seeing in Scotland,” Mr Brodie said.
The challenges facing Northern Ireland form part of the wider uncertainty which continues to be caused by Brexit, and Mr Brodie acknowledged that the political situation was weighing on business generally. “Our big concern is the lack of clarity,” he said, noting that there was insufficient information to help plan for departing the European Union either with or without a deal. “Day to day, it [the position] changes.”
Meantime, Scotmid said its funerals business was down compared with a “very strong result” at the halfway stage last year, with fewer funerals conducted. “Although this performance was mainly impacted by cyclical factors like the fall in the death rate early in 2019 after a mild winter, other factors such as a temporary reduction in advertising and increased competition also contributed,” the directors add in the interim report.
Mr Brodie said: “At the interim stage, the Society has performed strongly despite less favourable weather and the delay and ongoing uncertainty surrounding Brexit.
“The position on Brexit remains unclear and the possibility of a “no deal” makes it hard to predict the impact on the Society’s second half performance. The Society will therefore continue to focus on matters within our control and celebrate the success of Scotmid’s 160 years of serving our communities and improving people’s everyday lives.”
Scotmid said it had raised £325,000 for the Scottish SPCA (Society for the Prevention of Cruelty to Animals), its charity of the year, by the time its partnership recently concluded. The funds will help to educate primary schoolchildren about animal welfare. The co-operative also runs schemes offering grants to local charities and community groups.
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