Somerfield, the supermarket that has been put up for sale for an estimated £2bn-£2.5bn by its private equity owners, made a pre-tax profit of just £26.4m for the year to April 28, 2007, against a loss of £118.1m the preceding year, accounts filed at Companies House show.

The profit includes £134.1m of gains on disposals, struck after charging £166.8m of rationalisation and redundancy costs. Earnings before interest, taxation, depreciation and amortisation - or EBITDA, which focuses on cash earnings - rose to £217.7m from £32.3m in the previous year, according to accounts for Violet Equityco Limited, Somerfield's parent company.

The company, which reduced net debt to £946.8m from £1.3bn, described the results as "satisfactory". Like-for-like sales fell by 3.2pc, although they have risen since the year-end.

Deutsche Bank said the results suggest Somerfield, which is owned by Robert Tchenguiz, the property magnate, Barclays Capital and private equity group Apax Partners, is "in good health".

Stripping out exceptional items, it made a loss of £107.7m. Exceptional items included a £23m bad debt provision on the 2006 sale of Kwik Save, its subsidiary that went into administration.

It paid "interest and similar charges" of £159.4m against £55.1m last time. Included was a preference dividend of £46.7m (against £15.3m last time), which was rolled back into the company.

Somerfield paid a £2.5m break fee to R20, a Tchenguiz property company, in relation to cancellation of a sale and leaseback transaction with R20.

Source: Daily Telegraph