Baugur shifts its sights from the high street to property market

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The Independent Online

Jon Asgeir Johannesson, who still faces eight outstanding fraud charges, said the acquisitive group would reduce the proportion of its assets that are tied up in retail over the next 12 months. He predicted retail would drop to as little as 70 per cent of its assets, down from 80 per cent in 2005. "The rest will be other stuff, mainly real estate," he said.

He was speaking as the group announced that its after-tax profits for the year to end-December had shot up to £257m from £53.2m the previous year. Its total assets almost doubled to £1.33bn from £759m.

Mr Johannesson said the group was working on plans to float another of its retailing interests, possibly on the UK stockmarket, following last year's initial public offering of Mosaic, the Oasis-to-Whistles womenswear group, in Iceland. The identity of the business will be revealed in March, he added.

He denied he was frustrated at the general lack of understanding still displayed in Britain about Baugur. "It will take time, but they [people] will learn about us. We are only four of five years old," he said. He added that he still saw the potential for more deals in the UK and receives at least one proposal each week from possible sellers.

After Mosaic, the group's biggest retailing interest is Iceland, the frozen food chain it bought last year. Its plans to also acquire Somerfield, potentially to combine the two groups, were stymied by the revelation that Mr Johannesson and five colleagues were facing 40 charges of fraud, most of which were later dropped.

The group's results showed it had realised profits - anything it made cash on - of £145m last year, against around £25m in 2004. It had debt of around £750m and shareholder's equity of £578m. No decision has been made about how much cash the privately held group's investors will take out via dividends.