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Co-op profit rises on strong food performance

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By Reuters

LONDON (Reuters) – Britain’s Co-Operative Group <42TE.L>, the mutually-owned supermarkets-to-funerals group, reported an 86 percent rise in first-half profit on Friday, driven by strong food sales and the purchase of the Nisa business.

The country’s biggest mutual group, which also operates legal services and insurance businesses, said pretax profit was 26 million pounds in the 26 weeks to July 7, up from 14 million pounds in the same period last year.

Group sales rose 10 percent to 5 billion pounds, with food the stand-out performer. Food retail like-for-like sales rose 4.4 percent and the Co-op has now enjoyed 18 straight quarters of underlying sales growth.

The Co-op is Britain’s sixth largest supermarket group, with a market share of 6.6 percent, according to the latest industry data. Last year, it purchased Nisa Retail, the wholesaler and convenience retailer, for 138 million pounds.

The Co-op nearly collapsed in 2013 after a 1.5 billion-pound funding hole was found in its banking operation. It has since recovered, aided by the shift in Britons’ grocery shopping habits towards more frequent trips to smaller convenience stores – the mainstay of its business.

The Co-op no longer has a stake in the bank, which has restructured and recapitalised.

“Our investment in products, price and distribution channels has seen us grow revenue, profit and member value in the first six months,” said Chief Executive Steve Murrells.

On Friday, it also announced the acquisition of Dimec, a healthcare technology platform, marking the Co-op’s return to the healthcare sector.

(Reporting by James Davey, Editing by Paul Sandle and Mark Potter)