Iceland profits reach record high

Frozen food giant Iceland’s profit soared by almost 15 per cent in the past year as cash-strapped shoppers felt the pressure from rising food prices, it reported.

Net profit before tax rose 14.8 per cent to £155.5m in the year ending March 2011, compared with £135.4m in 2010, in what Iceland described as a record year.

The company has been put up for sale by its majority owner, failed Icelandic bank Landsbanki, for over £1bn.

Iceland’s sales jumped by 5.9 per cent, to £2.388bn, compared with £2.256bn last year in a sixth consecutive year of growth as shoppers opted for cheaper supermarkets.

Like-for-like sales were up 2.1 per cent and it opened twenty new stores last year, creating 1,500 jobs.

Iceland Chief Executive Malcolm Walker said he was “delighted” at the results.

“We continue to thrive in a highly competitive market place,” he added.

Earnings rose 2 per cent to £187.9m.

Morrison, Asda and the Co-operative Group could be interested in buying Icelandic Foods, according to reports.

The company, that sells frozen prepared meals and frozen vegetables, has had a turbulent past few years of trading.

Walker was forced out in 2001 following criticism over his sale of £13.5m shares just days before the company issued a profits warning, although he was cleared of the allegations in 2004.

His successor, Bill Grimsey renamed it The Big Food Group in 2002 and refocused on selling organic food in an attempt to turn around its performance, but sales continued to fall.

Walker returned to Iceland in 2005 and has since pushed profits up to record highs.

He denied the company would be broken up and was confident that funds could be raised to buy out Landsbanki.