The Co-op has said its profitability “exceeded expectations” in 2018, driven by its acquisition of grocery wholesaler Nisa and strong performance in food.

The grocery retailer posted a 27% uplift in pre-tax profit from continuing operations to £93m, while underlying profit before tax remained flat at £43m.

The retailer said that total revenues for the 52 weeks to January 5, 2019 grew 14% to £10.2bn, with the successful acquisition of Nisa and expansion of its wholesale business making Co-op products available to “thousands of new customers”. 

The Co-op reported a 4.4% rise in like-for-like food revenues during the period, which represented a fifth consecutive year of growth for that category, and the fastest growth in seven years.

The grocer only returned to profit in 2017, and recorded pre-tax profits of £72m in the 12 months to March 31 last year, following a £132m loss the previous year. 

The Co-op said it spent more than £414m on its business in the last financial year, including £326m on investing in new stores, refits and infrastructure for its food business. 

Net debt rose due to its £137.5m acquisition of grocery wholesaler Nisa in May 2018, but the Co-op said debt remained “below our £900m” target.

Co-op chief executive Steve Murrells said: “Over the past year we have continued to successfully transform the Co-op, leading to a 14% increase in revenues to £10.2bn and the return of £60m directly to our members and £19m to over 4,000 community projects across the UK.

“The acquisition and integration of the Nisa wholesale business has been a game-changer in expanding our food footprint and we have also set out the path by which we can offer our members a broader range of compelling Co-op solutions in Insurance and Health.”

Co-op revival continues as profitability ‘exceeds expectations’