The future of the group looked healthy back in 2009 with a series of acquisitions but a deal to buy branches of Lloyds Bank - part-owned by the U.K. government - fell through in 2013. Additionally, the acquisition of rival mutual Britannia back in 2009 was blamed for a £1.5 billion capital shortfall at the group.
Meanwhile, former bank chairman Paul Flowers, who resigned in 2013, was caught in tabloid sting allegedly trying to buy illegal drugs. He has since been charged with drug possession.
The Co-Op said that its businesses had traded consistently with management expectations in the early part of the new financial year and had made some progress with its strategy for its food unit.
It said it had plans to launch over 100 new convenience stores this year despite underlying profit for its food sector seeing a decline. Its farms and pharmacy businesses are still due to be sold, it added, and it is continuing to explore opportunities for the sale.
The Co-Op's troubled banking unit still remains the main area of focus, however. It will continue with plans to raise capital of £400 million in addition to its existing £1.5 billion recapitalization plan. The group as a whole is expected to contribute £333 million of capital this year to help make up the shortfall.
Earlier this year, U.S. hedge funds managed to wrest control of the bank and now own an approximate 70 percent share.
Following the earnings release, Roger Barker, the director of corporate governance at the Institute of Directors, warned that the Co-Op might not survive without "radical changes."
"The scale of value destruction over the last few years has been catastrophic. Without major changes to its governance model, the Co-operative Group will struggle to survive over the medium term," he said in a research note.
"This is a huge concern for the 90,000 people employed by the group. It also threatens the objective of creating an economy with a diversity of corporate structures."
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