Iceland has posted record profits as shoppers gobbled up its £1 range.

Underlying profits surged by 24% to £315.7million in the year to March 29, as sales nudged up 6.6% to £4.2billion, it told bondholders last week.

The performance benefited from the fact that last year included an additional reporting week, reports The Sunday Times.

It also reflected lower electricity costs and shoppers' desire for value for money as the cost-of-living crisis hit.

The retailer, which has stores in Gloucester, relies heavily on large freezers and was impacted by surging electricity prices last year in the wake of Russia's invasion of Ukraine.

It plunged to a loss in its 2022/23 year, as it faced a "wholly unprecedented" £94m rise in its annual energy bill..

Over the last year, electricity prices normalised and it also managed to reduce its consumption by 10%.

The retailer has also been ramping up its £1 value range, which includes items such as pizzas and sausages. At the turn of the year it added 50 new own-brand and branded products to the range, which now has more than 700 items.

The retailer told investors that it expects higher profits this year but did not provide a specific number.