Iceland - comment

Iceland released its Q3 results, with overall performance largely flat year on year. Revenue rose by 3.8 per cent, in line with market growth of 3.4 per cent. Iceland slightly outperformed the market in volume terms, though this came at the expense of a modest margin contraction.

Gross profit declined by £3m to £68m, while EBITDA increased by £1m to £89m, slightly ahead of our projections. Leverage remains comfortably below 4.0x on both pre and post IFRS bases.

Although differences in quarter end timing make working capital movements difficult to forecast, Iceland recorded a £10m inflow during the period. Management reiterated guidance for modest EBITDA growth over the next 12 to 18 months, which should support further deleveraging.