Semichem drags down figures at Scotmid

Scottish co-operative chain Scotmid has sounded "a strong note of caution" for the year ahead after its health and beauty stores in Northern Ireland dragged profits down.

Chief executive John Brodie said the Edinburgh-based co-op had seen a marked difference in the consumer environment since November. He added that, although less of an issue than the general state of the economy, the harsh winter weather also impacted on trading.

Scotmid made an operating surplus, or profit, of 9.1 million in the 12 months to 29 January, down 11 per cent on the previous year, despite turnover growing by 24m to 378m, results yesterday revealed. Revenues received a 16m boost from the acquisition of Botterills Convenience Stores in November.

Brodie said the society's No.1 priority was the integration of the 51 former Spar-branded stores, to make a network of 190 Scotmid outlets across Scotland.

The co-op group also runs a funeral service, property division, five fragrance shops and 140 discount health and beauty stores under its Semichem brand, in Scotland, Northern Ireland and north-east England.

"All our divisions showed progress with the exception of Semichem, which was the main reason for the reduction in the society's surplus," added Brodie.

"Semichem was hit particularly hard by the economic downturn in Northern Ireland, a reduction in cross-border trading, and the rise in VAT."

He said the co-operative would start trialing changes at some Semichem stores next month in an attempt to improve the chain's performance. But he warned that prospects for growth in the year ahead would be muted across all divisions.

He said the 150-year-old society was in a strong position to meet the challenges ahead and planned to expand its Fragrance House scent stores.

Scotmid does not pay a dividend. Its profits are used to fund community and charity causes, or re-invested in the business.