Britain's Co-op posts loss in 'disastrous' year
LONDON (AP) — The Co-operative Group, Britain's largest mutual society, on Thursday posted a 2.5 billion-pound ($3.04 billion) loss for 2013, a year its chief executive called "disastrous."
The Co-op is owned by its 7 million members and is active in everything from food to funerals to financial services. But it ran into financial trouble after its banking unit developed a 1.5 billion-pound black hole following its 2009 acquisition of the Britannia Building Society.
Faced with the crisis, the Co-op agreed to a rescue plan giving hedge funds a huge share of its operations, angering many of its members.
Last month, Chief Executive Euan Sutherland quit, deeming the organization ungovernable, and a former government minister brought in to review the Co-op's governance has announced he is leaving the board.
On Wednesday former chief executive Paul Flowers, who resigned last year, was charged with possession of cocaine, methamphetamine and ketamime.
Interim CEO Richard Pennycook said Thursday that 2013 "was a disastrous year for the Co-operative Group, the worst in our 150-year history."
Operating profits rose in Co-op's pharmacy, funerals and general insurance businesses but fell in its food division, where like-for-like sales were down.
Net debt for the year was 1.4 billion pounds, down from 1.7 pounds in 2012.
Group chair Ursula Lidbetter promised "fundamental reform" of the Co-op's governance. Members will vote on a proposed new board structure at an annual general meeting on May 17.
