Cost-cutting measures are paying off for the Co-op, as the group has announced a return to profit.

The group made a pre-tax profit of £72 million in the year to January 6. This is up from a £132 million loss the year before.

“Today’s results show how much progress we have made. All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers,” said Steve Murrells, Co-op’s chief executive.

Grocery sales remained at £7.1 billion. Funeral service revenues rose by four percent to £343 million, however, insurance revenues fell from £439 million to £331 million.

Following its bounce back, the group planning a major push into running schools and will invest £3.5 million in expanding academies as well as takeover England’s failing schools.

“We need a vibrant, commercially successful business and the more successful they are the more we can do in society. The academy investment is exactly that playing out. It is our chance to help in an areas that needs a lot of care,” said Murrells.

“I think education needs our help and we have got a good track record on turning those schools around. This is not based on a business case; it is based on doing the right thing,” he added.

The Co-op is waiting for the go-ahead from authorities to clear their £143 million takeover of Nisa, the wholesale and symbol group. Shareholders approved the deal, with 75.8 percent of shareholders voting in favour.

“We as a board are firm in our belief that a combination with the Co-op is in the best interests of Nisa’s members. The convenience store environment is changing rapidly, and is unrecognisable from that which existed when Nisa was founded more than 40 years ago. Co-op will add buying power and product range to our offering, while respecting our culture of independence,” said the Nisa chairman, Peter Hartley.