Iceland reports a 'challenging' year
Iceland has reported that its sales and earnings both fell in the 52 weeks to 27 March after what it described as an exceptionally challenging year.
Turnover edged down 0.5% to £2.7 billion while like-for-like sales declined by 4.4%. Iceland said the drop in revenue was mainly due to a reduction in the number of customer transactions, food price deflation and the cannibalisation effect of new store openings.
Adjusted EBITDA, excluding exceptional items, was £150.2 million compared to £202.2 million in the previous year. This was primarily a result of the sales performance, investment in the value of the product offering, additional marketing expenditure, and costs associated with the roll-out of Iceland's online business and international expansion.
Exceptional administrative expenses of £59 million were incurred in the period compared to £8 million in the prior year.
Iceland opened a net 28 new stores in the UK and Ireland in the year including six larger stores under The Food Warehouse fascia. The company ended the year with 872 stores of which 859 were in the UK.
Iceland chairman and chief executive Malcolm Walker said: “This has been an exceptionally challenging year for the group, and for the UK food retailing industry as a whole.
“In the face of food price deflation, intense competition and significant change in consumers’ shopping habits, Iceland has continued its long tradition of successful reinvention. We have done this by developing a new store format, launching new product ranges, upgrading packaging, rethinking marketing and initiating a major productivity programme.
“The benefits began to become evident in a more encouraging underlying sales and profit performance towards the end of the year, which has put us in a stronger position to face the continuing competitive challenges in the year ahead.”
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