Iceland Foods has revealed a 35.9% fall in pre-tax profits in the first set of results since founder Malcolm Walker regained control of the business.
Pre-tax profits for the 52 weeks to 29 March 2013 were £127.7m, compared with £199.2m for the 53 weeks to 30 March 2012.
A spokesman for Iceland said the drop was “driven by interest costs on the new debt associated with the management buyout”.
Sales were up on the year before, rising 1.1% rise to £2.64bn. However, the increase is a slowdown on the 6% rise in sales in 2011-2.
Iceland chairman and CEO Malcolm Walker described the results as “strong” in the face of “intense competition” in a market dominated by the supermarkets’ “short-term promotional activity”.
He also highlighted Iceland’s acquisition of Loxton Foods, its disposal of Cooltrader and its ongoing international expansion as positive moves for the business.
“We have not only delivered strong results but also strengthened our focus through the sale of the Cooltrader business”
“We have not only delivered strong results but also strengthened our focus through the sale of the Cooltrader business, taken an important step towards vertical integration with the acquisition of our own ready meal manufacturing facility, and laid the foundations for further growth of the Iceland brand internationally,” he said.
“This strategic acquisition of a key supplier was designed to strengthen our competitive edge further by enabling us to accelerate the rate of product innovation and to secure the benefits of vertical integration.”
Walker also revealed that Iceland has added over 400 new frozen lines over the last 12 months, while extending its successful tie-up with Greggs to 19 products.
During the year Iceland opened 36 new stores, taking its total portfolio to 790, employing around 25,000 staff. It has set a target of opening 40 stores over the next 12 months, which it says will create a further 2,000 jobs.