Iceland sales rose 4.5% year on year while EBITDA dropped 8.7% on the back of a disappointing first half, according to results announced today.
Sales in the 52 weeks ending 29 March rose to £3.1bn, while EBITDA fell to £140.1m, according to the trading statement.
The percentages were adjusted to make a comparable 52-week period with the year before, which was actually 53 weeks. Without the adjustment, sales were up 2.2%.
The EBITDA reduction occurred ‘entirely in the first half of the year and reflected sales performance, increased staffing costs as a result of the rise in the national living wage, increased distribution costs as a result of both higher fuel prices and the need to adapt our network to accommodate growing demand’ and investment in price, the trading statement said.
Exceptional administrative expenses of £14.9m were incurred ‘comprising business restructuring, compliance, property and other costs’.
Cash inflow from operations was down from £201m to £140.7m, due to additional stockholding as well as the lower EBITDA. Cash balances at the period end were £111.1m, down from £140.7m.
Sales were boosted by 43 net store openings, including 31 in Iceland’s Food Warehouse format. Growth was ahead of the wider UK grocery market, Iceland said.
The alliance with The Range had seen Iceland outlets added to nine of the home and garden chain’s stores since the first in August 2018.
The outlook for this year was one of continued growth driven by more store openings, said Iceland. Fourteen had opened to date, comprising seven Icelands and seven Food Warehouses. The modernisation of existing Icelands through a store refit programme continued, it added.
The retailer is also set to roll out online picking across The Food Warehouse stores.
“Within an intensely competitive UK marketplace, adversely affected by consumer uncertainty and the well-known pressures of changing shopping habits on the high street, we have continued to focus on investing for the future,” said Iceland group chief executive Tarsem Dhaliwal.
This included “expanding our store footprint, enhancing the appeal of our existing stores, growing our award-winning online business, continuing to roll out new and exciting food lines that are unique to Iceland, developing our supply chain to support the growth of our retail estate, and finding new channels to sell our food through The Range in the UK and a growing global franchise and export business.
“Our sustainability initiatives over the last year have substantially raised public awareness of Iceland and enhanced respect for our brand and its values, and we are confident that this can only enhance our prospects in the longer term.”
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