Second half pick up lifts Iceland's annual results

Date : 07 June 2013
Iceland has revealed that annual sales rose by 1% (1.1% LFL) to £2.64bn for the year ended 29 March 2013, with a recovery in trading in the second half compensating for a fall in LFL in H1. Highlights of the year included the opening of 36 new stores and the purchase of ready meal supplier Loxton Food Company which has enabled Iceland to up its rate of innovation.

A year of two halves

Last year it seemed that Iceland was going to take its first earnings dip under chief executive Malcolm Walker since 1996 when LFL sales fell by 0.2% in the first half of the year but performance was turned around in the second. According to Walker, “Last year in the first half we were concentrating on the buy-back [of Iceland] we probably took our eye of the ball and sales were negative. We got our act together and the second half was stunningly good”. Despite this pick up, growth for the full year remained well behind the 6% growth achieved in 2011/12.

Flat sales since year end

Commenting on the trading outlook in Retail Week, Walker admitted the consumer environment was difficult and that sales since year end were “not growing as fast as we would like” but remained convinced the Iceland’s round pound pricing would show consumers its continued commitment to value. Walker added that horse meat contamination had had some impact on ready meal sales, but consumer confidence was being enhanced through a rigorous product testing programme.

Focused on international expansion

As well as planning to open a further 40 stores in the UK this year, under new international business director, Paul Foley, Iceland is keen to expand its overseas business, particularly in South Africa and the Middle East where Iceland investors Brait and Landmark Group are based.