Bill Grimsey: Firm is making 'good progress'

Pre-tax profits before one-off items fell to �37.1m in the year to 28 March compared with �42.9m last year, but the drop was not as bad as had been feared.

The group pointed to a strong performance from its revamped Iceland stores, where underlying sales have grown strongly.

"We made good progress in laying the foundations for the future growth of the group," said chief executive Bill Grimsey.

"The trials of our strategic initiatives have proved successful and we are now focussed on implementing our strategic plans to unlock value from fundamentally attractive business streams."

Store refit

The fall in profits at BFG was put down to a poor performance by Iceland during the first half of the year.

The supermarket chain switched away from its traditional price promotions - such as buy-one-get-one-free offers and meal deals - to a policy of lower prices overall.

But the change was not a success, and a return to its normal pricing policy helped to restore profit margins at Iceland.

The company also saw underlying sales rise 14.1% at the stores it has refurbished.

It has revamped 33 of its 754 outlets and also opened six new stores.

BFG said it was planning to refit 100 more stores over the coming year.

Underlying non-tobacco sales at the Booker cash-and-carry business grew by 1.2%.

But tobacco sales fell 4.4% following changes to import regulations in the autumn.