Retailer Big Food Group (BFG) said weak trading at frozen food chain Iceland had hit home as it unveiled a fall in half-year profits.

BFG blamed a 6.7 per cent slump in like-for-like sales at Iceland in the 24 weeks to September 13.

That meant the chain slid into the red as well as hitting group sales for the first half year.

Group turnover fell from £2.45 billion to £2.38 billion and operating profits before one-off costs slid to £18.2 million from £33.4 million.

Pre-tax profits came in at £4.9 million, boosted by one-off gains on disposals and up on last year's £1.9 million. Half-year operating losses were £6.9 million against profits last year of £8 million.

BFG said conditions at the chain had started to improve and it was now focused on lifting trading further in the crucial run up to Christmas.

Chief executive Bill Grimsey said: "Iceland is now trading profitably and, having brought gross margins under control, the emphasis is on building sales through the important Christmas trading period and rolling out our proven new format stores."

BFG said at the four Iceland new format trial stores, there had been an average uplift in like-for-like sales of 15.1 per cent over the first half.

The group said it had now returned to more traditional promotional packages, meaning gross margins had been restored.

It has also identified four specific formats for revamping Iceland stores.

These are freezer centres with minimal grocery offer, a core store with a product mix similar to current outlets, a core plus store offering additional ranges in chilled and fresh foods and a "C" store with less frozen food and more convenience products.