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Wednesday, 1 May, 2002, 12:41 GMT 13:41 UK
Co-op revives the 'Divi'
Co-op food store
The Co-op has 1,900 food stores
The Co-operative Group has announced plans to revive its popular "Divi", a system which until 1976 distributed dividends to its members.

The Co-op:
operates bank branches across the UK

is the UK's largest independent travel agency group

is the UK's largest commercial farmer

has two coffin factories and conducts over 80,000 funerals each year

has 39 department stores

has 1,900 food stores with almost 10 million square feet of selling space

has five creameries and milk distribution units

has a series of car dealerships which sell 12,000 new and used cars each year across the country
The ethically aware UK retailer, which has just completed a major restructuring, vowed to relaunch the "Divi" the year after next.

The news came along with an announcement that the Co-op's operating profits surged 48% to 164.2m during the year to 12 January.

The movement's equivalent to a floated company's pre-tax profits rose 15% to 150m, the group said.

"It is appropriate that we start now preparing for a return of a true members' dividend," said chief executive Sir Graham Melmoth.

"We now have a clear sense of co-operative purpose which chimes with the times and is increasingly commercial," said Sir Graham.

Soaring profits

All Co-op members are set to benefit once the "Divi" returns, regardless of whether they buy hundreds of pounds worth of Co-op insurance or just a loaf of bread.

"Expected to make its comeback in 2004, after more than a quarter of a century, the twice yearly cash dividend will be paid out of profits, to members according to their custom with any or all of the group's businesses," the Co-op said in a statement.

Co-op reports
The Co-op is proud of its ethical approach to business
The revived "Divi" will replace the group's Divi loyalty card which offers members a discount in its stores.

The move is expected to be popular, not least since Sir Graham has pushed the movement back in the black following a merger of its Wholesale Society and Retail Services in January last year.

"Following its merger... the group wiped out inherited losses [from the retail services] of 54m [and] absorbed merger costs of 23.2m," the group said.

"In 2000, we stopped the [cash] bleeding and held our profits," Sir Graham said.

"In 2001, we pushed up trading profits and drew on benefits and synergies of integration."

Strong businesses

The Co-op's total group sales rose 4% during the year to 5.4bn.

Travelcare
The Co-op operates the UK's largest independent travel agent group
Its food sales alone rose 6.3% to 2.4bn.

But most of the group's profits derived from the Co-operative Bank which saw pre-tax profits rise 12% to 107.5m.

The bank is currently being merged with the Co-operative Insurance Society (CIS). under the brand name Co-operative Financial Services.

"With the bank continuing to turn in record profits and the potential benefits there are from bringing the bank and CIS together, the foundations laid for the future of the group in the twenty-first century are very solid," said Sir Graham who is due to retire this autumn.

Scandal

Last month, a UK court brought to an end a corruption scandal that has been burdening the Co-op for a couple of years.

Two former Co-op executives were convicted of having received 1m bribes and sentenced to three-and-a-half years imprisonment.

The court found that bribes had been paid in return for their choice of Hobson, the own-brand food and drinks maker, as a supplier to the Co-op.

See also:

01 May 02 | Business
UK charity bank set for launch
24 Nov 01 | England
Co-op merges for 'stronger voice'
08 Mar 00 | Business
Co-op merger approved
05 May 99 | The Company File
Co-op closes its non-food stores
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