The improving fortunes at Iceland, the frozen food retailer, took a step back yesterday in spite of improved half-year profits and a 25 per cent hike in the dividend. The shares fell 9p to 184p.
Pre-tax profits for the six months to June rose 4.7 per cent to pounds 33.6m. Like-for-like sales were up 2 per cent against 3.5 per cent in the same period last year. The interim dividend was raised to 1.65p.
Iceland, which aims to be everyone's "second shop", is continuing its rapid expansion programme which will create 5,000 jobs over the next five years. It is doubling store numbers from the current 725 to 1,500 by opening at least 55 stores a year.
Iceland added 24 outlets in the first half and 10 more so far in the second half.
Nine Presto and Safeway stores acquired in May will re-open as branches of Iceland later this year. Iceland is also expanding in Northern Ireland and will open its first stores in the Republic next year.
More than 400 outlets have also been refurbished and 180 new frozen product lines have been introduced. Iceland has also just launched a "silver jubilee" marketing programme.
Malcolm Walker, chief executive, said: "Combined with our improved store layouts and product ranges, this is expected to restore momentum to our like-for-like sales."
After several years of boosting its chilled foods and fresh foods ranges, the company is concentrating on its core frozen foods lines.
Sales in the first half were up 5.5 per cent to pounds 655m. Borrowings have been reduced to pounds 55m at the half-way stage compared with pounds 75m last year.