Scotmid, the biggest Scottish cooperative group, has reported an 11% fall in annual operating profits.
The retailer blamed harsh trading conditions – particularly in Northern Ireland where it runs the Semichem pharmacy business – and the snowy weather over Christmas.
Scotmid posted an operating profit of £9.1m in the year to January 29, versus £10.2m the previous year. Group turnover rose by £24m to £378m, including a £16m contribution resulting from the acquisition of 51 Botterills convenience stores.
Scotmid chief executive John Brodie described performance as “solid” in “a year of change and a number of substantial challenges”.
He said: “A change in economic conditions was experienced in our final quarter and, although less of an issue than the general economy, the prolonged period of adverse winter weather was also a factor.
He said all divisions had made progress with the exception of Semichem which was the main reason for the reduction in the society’s surplus – a co-op term for profit. Surplus after tax was a record £9.6m beause of the one-off disposal of the retailer’s superstore in Leith.
Brodie warned: “Prospects for growth in the year ahead will be constrained by the continuing uncertainties in the general market together with the increase in VAT.
“While we remain cautious the business is in a strong position to meet the challenges that lie ahead and will benefit in the longer term from our strategic initiatives in 2010.”