• Group annual profits fall from £124m to £23m
  • Food like-for-likes up 1.6% 
  • Boss Richard Pennycook taking 60% pay cut
  • Convenience like-for-likes rise 3.8%
  • Co-op Group sales flat at £9.3bn

The Co-op has today reported a 1.6% rise in full-year like-for-likes in its food business as the group continues its recovery under boss Richard Pennycook.

However, on a group basis, the Co-op revealed pre-tax profits dived from £124m in 2014 to £23m last year.

The firm said the hit reflected “major investment” in the business and 2014’s profits being bolstered by £121m from one-off disposals.

At its food business, like-for-likes volumes in the 52 weeks to January 2 rose 5%. Like-for-likes at its core convenience business increased 3.8%.

Underling profits at the division rose 3.3% to £250m, despite revenues remaining flat at £7bn.

The Co-op opened 97 new stores during the year and shuttered 91 “non-core” shops. It also ploughed cash into refitting 264 of its stores.

Pennycook, who has driven a turnaround of the group, said the priority this year had been “putting the building blocks in place for the long-term”.

Co-op’s chief executive is also taking a significant pay cut, with his total remuneration falling by nearly 60%. His basic pay from July will be cut from £1.25m to £750,000.

Pennycook told the BBC he has to “lead from the front” when asked about the cut.

The mutual, whose other businesses include funeralcare and insurance, warned that underlying operating profits for the next full year are expected to be below 2015 as it continues to invest in rebuilding the business.

On current trading, the Co-op said it has “enjoyed a strong start to 2016”. “Food convenience sales have continued to grow ahead of the market,” it added.