Co-operative Legal Services makes £5m loss in first half of 2014
CLS: restructuring “successfully completed”
Co-operative Legal Services (CLS) has announced an operating loss of £5.1m in the first half of 2014, a 70% increase on last year.
However, there is no sign of the Co-operative Group, which described CLS as a “fledgling business” in its half-year accounts, selling it off.
Instead the group said CLS would work closely with Funeralcare and General Insurance, the other services in the Co-op’s new consumer services division “to explore new ways of providing services and products which meet customers’ needs at key life stages”.
The group said the latest losses reflected the cost of restructuring CLS, with sales of £13m for the half-year, down from £18m this time last year, and underlying losses up from £3m to £5.1m.
“In the last six months we have been focused on addressing the underlying issues, reducing the cost base, and restructuring the business to ensure it is the right size and shape for the future,” the group said.
“This restructuring has now been successfully completed, and we have a clear plan for the second half of the year, in which we expect a positive contribution from Legal Services as we move into 2015.”
The group said its overall strategy was “to build on our existing strength as a convenience food retailer and to optimise the performance of our new Consumer Services Division, comprising Funeralcare, General Insurance and Legal Services.”
CLS made a loss of £22m in 2013, the group announced earlier this year. Revenues were flat at £33m, with an underlying operating loss of £9.1m, but its operating loss after “goodwill impairment” was put at £22m, compared to £2m in 2012.
Matt Howells, managing director of CLS, said the half-year results were in line with budget and reflect the fact that CLS entered into 2014 with substantial monthly trading losses.
“Present management took action to address the underlying issues and restructure the business to align operational capacity with sales volumes. The first half results include the costs of restructuring the business which are now nearing completion in line with our plans.
“The legal market place continues to evolve and with the pace of change increasing there is a significant opportunity to build a legal brand that people know and trust.
“We have seen an encouraging increase in demand for our family legal services and our probate services. We expect to see this trend continue into the second half of 2014.”
Howells said CLS was looking to Co-operative Group partnerships, membership and affinity marketing schemes for future growth.
He added that he believed there was a space in the market for CLS to “become one of the go to legal brands in our key markets and to grow by providing customers with transparent prices and continually high standards of service.”
Tags: ABS, Alternative business structures, Co-operative Legal Services
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