Iceland announces record profits

Iceland, which owns 796 stores, said underlying profits rose 14.8 per cent to £155.5 million in the year to March 2011, with like-for-like sales growth of 2.1 per cent.

The company, which also owns the Cooltrader discount food chain, said sales increased 5.9 per cent to £2.4 billion, 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 per cent stake this year.

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