Express Dairies is "close to getting into difficulties" and open to takeover according to city analysts. The comments came as Express issued a half year update warning that trading was more difficult than expected in the first half of the year. It expects to report pre-tax profit for the six months to September 30 of about £11m, down from £24.1m for the same period last year. An analyst said: "Conditions are tough and they are getting tougher. Overall the company must be getting close to being in difficulties. This will inevitably bring on rationalisation." He added that reassurances that the outlook for cashflow for the year was positive, and reductions in the cost base would show benefit in the second half, were "wishful thinking." A second analyst commented: "The next move is in the hands of other industry players. Capacity has to be taken out. We can rule out a management buyout, and any involvement from Dairy Crest. I would expect rationalisation with Wiseman as the aggressor." And another analyst said: "Market conditions are set to get worse not better, consolidation has been on the cards for some time." Wiseman and Express both played down speculation about a merger earlier this year when it was revealed the two chairmen, Robert Wiseman and Christopher Haskins, had a meeting (June 2). {{NEWS }}