Frozen food retailer Big Food Group today said its recovery had begun after making “tremendous progress” in the past 12 months.
The group, formerly known as Iceland, said that despite sluggish sales, debt had been cut back and its annual results had met analyst expectations.
Pre-tax profits for the year to 29 March came in at £42.9m before one-off costs, up from £40.1m in the prior 65 weeks.
Chief executive Bill Grimsey said: “Sorting out the Big Food Group has been an enormous challenge, we inherited a very difficult situation.
“But we have all worked very hard and are very pleased with the result. There are celebrations going on across the stores and the Booker depots today.”
Grimsey joined Big Food Group at the end of 2000 as it began to count the cost of a disastrous foray into organic food under former boss Malcolm Walker.
Sales and profits tumbled and shares in the group, which also owns Booker cash and carry and Woodward foodservice, have fallen 48% in the past year.
A new management team has since been brought on board and earlier this month secured a vital refinancing package including a new £300m debt facility.
The funding has been earmarked for investment in trial Iceland stores designed to win back customers lost to the competition over the past year.
Big Food Group said like-for-like sales at Iceland supermarkets in the past eight weeks were down 6.2%, but the trial stores were proving successful.
Sales in a new convenience format were up 17% just 36 days after launch, while another new format combining frozen and fresh food had achieved a 31% jump.
Like-for-like sales across the group in the recent financial year were up just 0.3% with a decline of 1.8% in Iceland stores.
“We are challenging the old idea that one store fits all locations and we are very confident we can win customers back,” Grimsey said.
EGi News 30/05/02
