Co-op reveals record jump in profits to £402m

The Co-operative Group today announced a record set of results that highlight the virtues of the mutual model, but ruled itself out as saviour of the sector.

With small building societies likely to come under increasing financial pressure which may force them to seek safety in the arms of a parent, ministers are hoping the Co-op and the Nationwide will be willing to mop up strugglers.

But Co-op's chief executive, Peter Marks, today said the group would not do any deals for at least the next two years as it works to integrate supermarket chain Somerfield and Britannia Building Society.

"We have to consider financial stretch and managerial stretch," he said. "There will be no major acquisitions coming along any time soon. We have to look after our own business."

Profits at Co-op - which includes food, financial services, pharmacy and travel arms - jumped 85% to £402 million in 2009. Five million members will share a dividend of £55 million, a rise of 16%.

The Co-op is the fifth largest grocer in the UK. Food sales are up 5.5%. Total revenues jumped 31% to £13.7 billion.

Asked if there was a danger of over-reaching, Marks said: "I can understand that view from the outside, from the inside we are very confident and comfortable. We have a class management team and sometimes you have to take some risk."

Top managers could be lured to higher paying plcs, he conceded. "There is always that danger. But there is a real buzz about the place. It is not all about money, it is about working for a business you believe in."

There was a 38% rise in new account openings as consumers departed banks in anger at rising fees.