Iceland grew sales by 16.2% to £3.8bn in the year to 26 March 2021 but still made an overall £8.8m loss after tax.
The results are a marked improvement on the previous year, when the business reported a £71.8m loss after tax.
The latest accounting period included an advance of £108.5m to Iceland’s family shareholders’ holding company, WDFF, in order for them to pay Brait SE for the return of the business to full family ownership.
Adjusted EBITDA rose 31.9% to £176.4m, excluding exceptional items such as the costs and “benefits” of Covid, the latter incorporating £46.7m received in business rates relief.
Staff costs increased as a result of a 4.1% pay award to frontline workers in April, according to the group accounts filed at Companies House by Iceland parent company Lannis Ltd.
The business also recruited and trained an additional 5,300 staff, while retaining on full pay those self-isolating under government guidance and taking on extra store security personnel to enforce social distancing.
The mitigating impact of business rates relief kept total exceptional expenses to £0.2m, compared with £19.3m the previous year.
During the latest period, the group opened 20 new Food Warehouse stores, taking the estate to 141. Meanwhile, three Iceland stores opened and eight closed. One of the closed Iceland stores reopened in March this year as ‘Swift’, Iceland’s new convenience format.
Online capacity grew to a potential million deliveries week, thanks to the thousands of additional drivers and staff recruited, plus a 20% expansion of the vehicle fleet. Maintaining good delivery slot availability while rivals struggled to meet surging demand brought the business “many new customers who have never shopped at Iceland before”.
The business also reached new customers through its strategic alliance with The Range, which saw the home, leisure and garden retailer add Iceland departments to 39 of its stores during the period, bringing the total to 86.
The past year saw Iceland “strengthen our commercial partnership with The Range and now supply the complete grocery range offered in those stores where a dedicated Iceland department has yet to be established”, the accounts said.
Internationally, Iceland now serves its own label products to partners in 40 countries, including its network of franchise stores, according to the accounts.
“Brexit initially caused sporadic delays in the supply of our products within the EU, including our company-owned stores in Ireland and franchise stores in Spain, but these have diminished as we, our suppliers and the border authorities have learned to work more smoothly under these new post-Brexit arrangements,” the accounts said.
The accounting period also included an advance of £31m to WDFF to enable the purchase of 28 restaurants under the Restaurant Bar & Grill and Piccolino brands in a pre-pack administration.
Cash balances at the year end were £125.5m, £12m below expectations following the loss of a supply chain finance facility provided by Greensill Capital, which filed for insolvency in March this year.
Net debt stood at £717.8m, up from £687.2m.
On Iceland’s outlook, the accounts said it should be noted footfall in high streets and shopping centres where many of its core stores were located remained 30% below 2019 levels.
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