Express looks for mail service to deliver

Express Dairies today pledged to turn its fleet of milk floats into a profitable mail delivery operation by as early as next year.

The Leicester-based group has recently started using its floats to deliver thousands of parcels and packages a week to the doorstep alongside milk.

And chief executive Neil Davidson said the feedback from potential customers had been encouraging: “We certainly have a lot of interest in the pipeline.”

Express has transformed the shape of its business over the past 18 months to cut debts and focus on supplying retailers and household customers with milk.

The group won a licence from postal regulator Postcomm in August to help bolster its home delivery division, which is battling a decline in milk volumes.

Pre-tax profits rose to #14 million in the six months to September 30 from #13.4 million a year ago and Mr Davidson said the restructuring had paid off.

Express today declared its first dividend payment in two years, and shareholders will receive a 0.4p per share interim payout.

Mr Davidson said: “We have reshaped the business in the last 18 months to focus on core activities and reduce the debt and can now resume dividend payments.”

Express has sold its liquid milk business, ingredients and UHT operations and closed three bottling plants in an effort to revive its fortunes.

Turnover fell by #100 million in the first half to #362.9 million but debts fell #74.2 million from #168.8 million in March.

The group said it was on track to deliver savings of #9 million this year after seeing staff numbers fall by over 600 in the past six months.

It added the restructuring had helped to offset further declines in traditional doorstep sales, where milk volumes were down 11.5% in the half-year.

On a bottom-line basis pre-tax profits were #5.6 million against #1 million in the same period last year. Express’ shares rose 7 or 2p to 30.5p.