Frozen foods retailer Iceland announces record profits

Frozen foods retailer Iceland today reported record sales and profits – heaping pressure on potential buyers to pay more for the company.

Iceland, which owns 796 stores, said underlying profits rose 20% to £155.5m in the year to March 2011, with like-for-like sales growth of 2.1%.

The company, which also owns the Cooltrader discount food chain, said sales increased 5.9% to £2.4bn, helped by opening 20 new stores.

The strong figures will drive up the price that potential bidders are considering paying for the company, with supermarket rivals Asda and Morrisons reported to be thinking about a bid.

The company was effectively put up for sale after collapsed Icelandic bank Landsbanki said it will offload its 67% stake this year.

However, founder and chief executive Malcolm Walker, who along with other members of the senior management team owns a 23% stake in the company, is also understood to be considering a bid.