The UK's fifth largest supermarket chain Somerfield has posted a profit for the first time in three years.

The company recorded a pre-tax profit of �22.2m for the year to 27 April, compared with a loss of �13.1m last year.

The company also said it would pay a dividend of one penny a share - its first dividend for two years.

But sales figures since the end of the financial year show business slowing, suggesting that the supermarket's recovery remains fragile.

Sales in stores in the core Somerfield chain open at least 12 months fell 1.8% in the first eight weeks of the new financial year.

Meanwhile sales at Kwik Save stores fell 3.5% over the same period.

Sprucing up the stores

Somerfield's chief executive, Alan Smith, said the weaker sales showed the importance of the company's store refurbishment programme.

"I think [the sales slowdown is] partly the market, certainly the market has been soft in the first eight or nine weeks of the year, and we would expect that to improve slightly as the year goes on," he told BBC Breakfast News.

"In particular we need to get the investment into the stores very quickly and that is why for example we are saying we will be investing in over 100 Somerfield stores over the next 11 or 12 months."

Somerfield is currently in the second year of a five-year turnaround which has seen many of its stores getting a face-lift.

The company said �50.5m was invested on store revamps last year, with 24 stores undergoing a full refit, and 98 having a minor refit.

It is planning to spend a further �75m this year on opening five new stores and refurbishing more than 100 existing stores.

On the London market, shares in Somerfield slipped 2p to 112p in early trade.