Iceland profits begged back by investment and supply chain problems
Profits at supermarket Iceland dipped last year after the firm invested in price cuts and was hit by supply chain issues over the critical Christmas trading period.
The group saw adjusted earnings slip 1.8pc to £157.1m in the year to March 31, while sales rose 8pc to £3bn.
Iceland said that price cuts, extra marketing investment and supply chain problems were contributory factors.
"Investment in marketing and price, together with problems in our supply chain infrastructure during December which caused poor overall availability in our key Christmas weeks, and inadequate supplies of some of our best-selling seasonal lines" hit the firm, the company said.
Like-for-like sales were up 2.3pc over the year and Iceland expanded its Food Warehouse chain to 59 stores through 23 new openings.
First launched in 2014, the Food Warehouse stores - largely based in retail parks - are around three times the size of traditional Iceland outlets.
The group is also embarking on a store refurbishment programme, which is yielding higher sales.
Iceland group managing director Tarsem Dhaliwal said: "This year we have continued to take a long-term view and to invest for the future: expanding our store footprint, enhancing the appeal of our existing stores through a major programme of refurbishments, growing our award-winning online business, continuing to roll out new and exciting food lines that are unique to Iceland, and developing our supply chain to support the growth of our retail estate."
Iceland said it will not be diverted by "external issues", such as Brexit or the proposed merger of Sainsbury's and Asda.
However, it added that clarity on the nature and timing of Brexit would be "helpful".
The group is also ploughing millions of pounds into eco-friendly initiatives, having been the first major retailer to pledge to go plastic-free on own-label products and the first UK supermarket to crackdown on palm oil.
"Although our motivation in acting on plastics and palm oil is not primarily commercial, we believe that the positions we have taken can only enhance our appeal to consumers, and hence our sales, in the longer term," Mr Dhaliwal added.