I wanted to follow up Steve Murrells’ message to all Co-op colleagues this morning with a specific update for Funeralcare as our first half results are published.
Our performance in Funeralcare is in line with the same time last year but it’s important to acknowledge the significant change taking place throughout our business and the additional value we’re now returning to our members. That context makes our performance all the more encouraging.
As Steve says, we’re now proving that our Co-op is a better and different way of doing business. From January to the end of June we returned millions to our members and championed their communities and the issues that matter most to them. Through the 5% reward, members have received a total of £29m, and through the 1% reward £6m has been raised making a difference to thousands of local causes.
New ways of working
During the first half of the year colleagues in Funeralcare have been making important operational changes across our funeral homes by introducing new digital technology and new leadership roles so we can give even more time to supporting you in helping families through their bereavement.
I understand completely that such change creates uncertainty for colleagues and concern for how we work together and how we support families. Change like this is never easy but it is essential if we are to remain relevant to today’s changing family needs. I also want to thank the teams who’ve been working first with the new digital technology and for the valuable feedback you’ve given us to enable further development before we roll out to the rest of our colleagues.
The big numbers
Both sales and underlying profit were in line with last year. Sales were £166m (2016: £164m) with underlying profit of £41m (2016: £42m). Operating profit was down on last year at £41m (2016: £62m) but last year included £20m profit on the sale of our crematoria.
Our strategy remains to grow Funeralcare and we successfully opened 27 new funeral homes in the first half, with plans to open a further 53 taking us to 80 by the end of the year. We’ve also continued our programme of refits and rebrands, with 117 planned for the year. In addition, we’re progressing with a programme to brand all of our private name estate as ‘Co-op’.
As you know, we are the country’s largest provider of funerals, with 16.4% market share, and as such we have a responsibility to lead the way in this sector of UK business. We’ve expressed that leadership in several ways during the first half of the year.
We’re working to develop a comprehensive set of professional services that address end of life needs. Unlike any other business in the UK, the Co-op has the opportunity to provide a complementary proposition, ranging from will writing and funeral plans to at need funeral services and probate.
We’re proud to offer the UK’s only fully guaranteed funeral plan, with no hidden costs. We’ve worked on transparency, making clear everything that’s within our plans and also by developing our own online comparison tables to make it easy for clients to see it for themselves.
In January we announced an extension of our free child funeral policy, providing support for thousands of bereaved parents of children up to the age of 18.
We also continue to lead the way on affordable funerals at time of need with more people choosing our simple funerals and, once again, our drive for transparency was demonstrated through the launch in our funeral homes of choice’s, a new way to present funerals, explaining upfront in simple language the total costs of different options so the client is in control of price and service choices.
Finally, I want to thank all colleagues across Funeralcare for your incredible dedication and commitment to the services we provide. You will always be our greatest asset. Whether it’s your ongoing commitment to client care, or dealing with tragic events like the Manchester bombing, or supporting people coming to terms with bereavement through local community events, it is a privilege to witness all that you do.