Co-operative Legal Services (CLS) has made an operating loss of £22m for 2013 and unveiled a flat turnover, blaming a slower than expected growth rate for the period and factors including a hit to its personal injury business stemming from the Jackson Reforms.
Revenue at 560-employee CLS, which operates from three sites, came in flat at £33m, the Co-operative Group announced in its annual report today (17 April), as it also highlighted plans for CLS to work more closely with other limbs of its diverse business.
The operating loss of £22m, compared to £2m in 2012, came after a ‘goodwill impairment’ of £13m ‘following a reassessment of its business plan, which has assumed a slower growth rate than previously applied’, the report said.
The business review and results for the 52 weeks ended 4 January 2014 said the CLS business ‘remains in the early stages of its development, and this is reflected in the performance for 2013. Sales were broadly flat with losses arising from regulatory change.’
It attributed the losses to ‘uncertainty about the future of our general insurance business, and decisions to invest in future growth.’
The report continued: ‘We are now looking to consolidate and optimise the portfolio, with further restructuring planned, to work more closely with Funeralcare and General Insurance as part of the newly formed consumer services division.
‘Regulatory change, including the Jackson reforms, had the most significant impact upon our personal injury business. The restructuring of the PI business announced at the end of 2013 has been completed in line with our plans.
‘However, following the decision not to sell the general insurance business we are now able to explore opportunities to work more closely with our insurance business.’
The Co-op’s family law business achieved £1.2m revenue in its first full year of trading after a period of investment in developing a transparent fixed-fee pricing proposition.
The results come as the group today unveiled £2.5bn losses for 2013, the worst results in its 150-year history.