Healthy profits for Express Dairiesand Northern Foods

10 June 1998

Healthy profits for Express Dairies
and Northern Foods

EXPRESS DAIRIES, which demerged from Northern Foods in March, yesterday (Tuesday) announced sharply higher profits due to the strength of Sterling.

Operating profits bounced back by 40% from £44.8 million to £62.5m – a healthy result considering the company spent £10m on the demerger. Overall, the group reported proforma pre-tax profits of £54.8m on sales of £752.8m.

Analysts have now forecast pre-tax profits of £60m for the groups current year and £64m for the following year.

Neil Davidson, chief executive, attributed the recovery to lower raw-milk prices, which are set in European currencies. The company also benefited from a stronger-than-expected performance in doorstep deliveries.

He reiterated that the dairy industry needed to consolidate, but discussions with most large competitors had so far produced no agreement. He hoped for a merger with a competitor in the next year.

Meanwhile, the company from which Express Dairies broke away from, Northern Foods, also released its annual profits yesterday. Demerger costs of £18.5m and a £3.1m write-off of fixed assests held pre-tax profits to £130m, compared with £128.3m previously – on turnover down 2.8% to £1.83bn.

• The Times 10/06/98 page 29
• The Independent 10/06/98 page 18, page 23 (The Investment Column)
• Financial Times 10/06/98 page 24
• The Guardian 10/06/98 page 19
• The Daily Telegraph 10/06/98 page 30, page 30 (Questor)