Frozen food specialist Iceland has posted a fall in annual earnings as investment was made in the business.

Iceland reported adjusted EBITDA of £202.2m, down from £226.3m, “reflecting major investment for sustainable future growth in the UK and abroad”.

Total sales advanced 2.7% to £2.71bn in the year, when like-for-like revenues were flat.

Last year Iceland acquired previously franchised stores in the Republic of Ireland, began an operation in Dubai to distribute its products in Saudi Arabia and the United Arab Emirates, and rolled out an online shopping service to 280 of its 833 UK stores. This will be expanded to a further 320 stores by the end of the current financial year.

As established grocers adapt to a retail landscape being transformed by the growth of discounters such as Aldi and Lidl and upmarket supermarket groups such as Waitrose, Iceland founder and chief executive Malcolm Walker said his business was well positioned for success.

Walker said: “Iceland has demonstrated its ability to withstand this intense competition and outperform the major multiples through innovation in both products and services, the convenient nature of its store locations in local catchments, and by maintaining its competitive edge on price.

“We are fully committed to protecting our value proposition to customers, which has been the cornerstone of Iceland’s success to date. Combined with further investment in expansion of our online offering, this will provide a strong and defensible platform in a potentially difficult trading environment in the year ahead.”

Iceland now exports products to approximately 30 countries and Walker said: “We are committed to maximising the potential of our brand through further expansion of exports, retail franchising, acquisitions and store openings outside the UK.”

Following the launch and roll-out of Iceland’s online service, total delivered sales averaged 200,000 per week by the year-end on March 28.

Of the current financial year, Walker said: “We expect to open up to 40 new Iceland stores in the UK, creating up to 1,250 jobs, and to complete the roll-out of our online service nationwide.

“We will continue to invest to provide value to our customers, and identify and exploit opportunities for further development of the Iceland brand internationally.”