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Co-op points to Brexit-challenged 2019, profit flat

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(Reuters) – Britain’s Co-operative Group predicted a challenging 2019 on Friday as it reported largely unchanged annual pretax profit, citing strong competition and continuing doubts over the shape of Britain’s departure from the European Union.

The UK’s sixth largest supermarket operator, which also has side businesses ranging from insurance to undertaking, said total revenue for the year to Jan. 5 rose 14 percent to 10.2 billion pounds, driven by strong food sales and the acquisition of the Nisa convenience chain.

Food like-for-like sales rose 4.4 percent in the period.

“We have made great progress in 2018 but there’s no doubt 2019 will be challenging with Brexit uncertainty, intense competition in Food retail and a rapidly changing funerals market,” the company said in a statement.

Co-op, which has been healing since 2013 when a crisis in its then banking unit nearly brought it to its knees, said it was planning for various Brexit scenarios.

The country’s biggest mutually-owned business said underlying pretax profit remained flat at 43 million pounds, however, pretax profit from continuing operations rose 27 percent to 93 million pounds.

Co-op said that it had been forced to back off previous plans to partially re-finance a 450 million pound Eurobond expiring in July 2020 due to the impact of Brexit jitters on debt market pricing. It has agreed a 180 million pounds liquidity facility with its banks instead.

(Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; editing by Patrick Graham)

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