What does the Midlands and Anglia Co-operative Societies merger really mean for members (in numbers)?
[table id=”coop-publicnumbers” tf=”last” align=”right” style=”float:right; margin:50px 0 50px 0; font-size: 75%;” width=”50%”]
,Midlands,Anglia,Combined
Trading counties,12,4,16
Retail stores,200,27,227
(to open),15,2,17
Funeral homes,90,23,113
Fuel stations,15,8,23
Members,”140,000″,”189,000″,”329,000″
Employees,”7,000″,”1,600″,”8,600″
Source: Data[attr colspan=”4″]
[/table]
Midlands Co-operative Society and Anglia Co-operative Society have recently asked for member approval on plans to merge. The notice I received in the post (from Midlands Co-operative) under the banner ‘Together as one’ sounds very appealing, showing how the group will increase in size from over 300 trading outlets to near 400 and gross sales will reach £1 billion. There’s numbers-a-plenty to go with it – however, including one shocking number: Midlands Co-operative has 140,000 members across their 200 stores compared to Anglia Co-operative’s 189,000 members across 27 stores. Coupled with information on profits and dividend payments to members, this is worse than it first appears.
The table below shows a quick calculation of the average value of member dividends both now (in green) as it currently stands with two societies and following the proposed merger(red). What is clear is how the disproportionate number of members of Anglia (~3,259 members per outlet) compared to Midlands (~456 members per outlet) will reduce the value of the average dividend for Midland members by nearly 50%. I seriously hope the number of members has been miscalculated as the majority partner of the merged society (around 300 outlets to 60) cannot be reduced to a minority shareholder position. This is simply not in the interests of Midlands Co-operative Society members.
[table id=”coop-profitnumbers” caption=”Comparison of average dividend per member (2012)” tf=”last”]
,Midlands,Anglia,Combined
Revenue,”£731,726,000″,”£216,786,000″,”£948,512,000″
Net profit,”£12,985,000″,”£10,582,000″,”£23,567,000″
Total dividend payout,”£2,775,000″,”£746,000″,”£3,521,000″
No of members,”140,000″,”189,000″,”329,000″
Average dividend per member,”£19.82″[attr style=”background-color:#aeec5a;”],”£3.95″,”£10.70″[attr style=”background-color:#f45d33;”]
“Green: Current average dividend,~~Red: Combined average dividend”[attr colspan=”4”]
[/table]
With no arrangements made to rectify this position under the terms of the merger, this is a massive own goal for Midlands Co-op – something which isn’t mentioned in any literature sent to members. Anglia members and their board must be laughing all the way to the bank.
I’m currently waiting for a response from Midlands Co-operative Society.
Update 21 October 2013, 30 October 2013:
I am still awaiting a response from Midlands Co-operative Society.
Data
- Midlands Co-operative Society Merger Leaflet (Cached)
- Midlands Co-operative Society Interim Report October 2013 (Cached) Page 7
- Anglia Co-operative Society Annual Report for w/e 1 September 2012 (Cached) Page 23