The Big Food Group has insisted that it is on the road to recovery, even though sales at its Iceland shops are still falling.

Sales at Iceland stores that were open a year ago fell by 1.8% in the 12 months to the end of March.

And in the past eight weeks sales have fallen by 6.2%.

But the company said it had cut its debts while also meeting analysts' profit expectations.

The Big Food Group made pre-tax profits of �42.9m for the12 months to March compared with �40.1m over the previous15 months.

It added that trials of new store formats were encouraging.

Big Food Group chief executive Bill Grimsey, said: "We inherited a very difficult situation.

"But we have all worked very hard and are very pleased with the result.

"There are celebrations going on across the stores today."