The Big Food Group’s news that Iceland was now trading profitably saw shares jump almost 16% to 57.25p by 3.15pm after falling to an all-time low of 25p on October 9 following a profits warning.

Earlier today, BFG reported that first half sales at Iceland stores fell 6.7% due to aggressive pricing which shaved almost £8m off BFG’s bottom line.

However, the group said a switch to a more traditional promotional offer had been in place since July had maintained margins. It added that Iceland's four new format stores had seen like-for-like sales up 15.1% on average in the first half.

The group said there would be 42 more new format stores by March 2003, with a further 100 planned for the next financial year.

The formats include a freezer centre with a minimal grocery and chilled offer; a core store similar to the current Iceland format; a 'core-plus' store offering additional ranges including chilled and fresh foods; and a c-store with a reduced frozen food offer with a full convenience store range.