Express has now switched its focus from consolidation to concentrating on reducing debt and reversing a long-term proft decline. Net debt was high at £168.8m for the year to March 31 2002, but that figure was actually a reduction of £34.6m, achieved through disposals of non-core businesses and assets. They included Dale Farm Dairies in Northern Ireland, Scotland's Graham's Dairies, and three English bottling dairies.
The recently completed restructure of operations that serve Express' core supermarket and doorstep markets will also help balance the books in future, says Tim Smith, executive director responsible for sales and marketing.
Finally, Express pulled out of the UHT sector in July through a £30m joint venture with Milk Link. The deal gave Milk Link Express Dairies' long life milk business and its creamery and ingredients business in Somerset. The Somerset site will continue to supply Express with its own branded UHT products, and a 50:50 joint venture to make and sell added value products is being formed.
Smith says: "Pulling out of the cyclical UHT market works for us and works for Milk Link."
A City analyst says: "The Milk Link alliance was a good deal. Express has been closing down quite a few assets. It is now relatively well balanced."
So, after months of operational rationalisation, Express can put the painful process of shedding businesses and the loss of nearly 2,000 staff behind it, says Smith.
"We are left with a backbone of three core dairies, at Ruislip, Ashby, and Manchester, and two glass bottle plants in Liverpool and Manchester, as well as our North Allerton creamery and ingredients business. With that stronger and better base, we can get our debt down." Those firmer foundations will allow for "broader and deeper" coverage in supermarkets.
And, as Express processes two billion litres of milk a year, 40% sourced from its Express Milk Partnership of 100 dairy farmers, it helps that price favours the processors at the moment, despite huge overcapacity in the market.
Express supplies 1,350 supermarkets including Morrisons and Sainsbury  although it lost volume with Safeway last year which led to the closure of its small Middlesbrough dairy.
Smith says: "We have had a very strong year in our supermarket business, and we are pretty happy with our market share, having retained Sainsbury's volume and won a 100% Morrisons supply contract. But we would like to get a foot in the door of another multiple."
Express, which has a 25% share of the dairy industry in England and Wales, is not neglecting doorstep deliveries, although the overall doorstep sector is in decline, down 11% in 2001. It is constantly on the lookout for ways to put its urban delivery network of 106 depots and 3,500 milk rounds to fuller use.
And it has just been given a big boost in the shape of a 12-month postal licence from the Postal Services Commission so its milkmen are able to deliver business mail on their rounds.
They already deliver boxes of organic produce on the milk run, to fulfil orders placed through an Express joint venture with organic supermarket SimplyOrganic. The deal is worth £8m a year to SimplyOrganic.
{{Z SUPPLEMENTS }}
The recently completed restructure of operations that serve Express' core supermarket and doorstep markets will also help balance the books in future, says Tim Smith, executive director responsible for sales and marketing.
Finally, Express pulled out of the UHT sector in July through a £30m joint venture with Milk Link. The deal gave Milk Link Express Dairies' long life milk business and its creamery and ingredients business in Somerset. The Somerset site will continue to supply Express with its own branded UHT products, and a 50:50 joint venture to make and sell added value products is being formed.
Smith says: "Pulling out of the cyclical UHT market works for us and works for Milk Link."
A City analyst says: "The Milk Link alliance was a good deal. Express has been closing down quite a few assets. It is now relatively well balanced."
So, after months of operational rationalisation, Express can put the painful process of shedding businesses and the loss of nearly 2,000 staff behind it, says Smith.
"We are left with a backbone of three core dairies, at Ruislip, Ashby, and Manchester, and two glass bottle plants in Liverpool and Manchester, as well as our North Allerton creamery and ingredients business. With that stronger and better base, we can get our debt down." Those firmer foundations will allow for "broader and deeper" coverage in supermarkets.
And, as Express processes two billion litres of milk a year, 40% sourced from its Express Milk Partnership of 100 dairy farmers, it helps that price favours the processors at the moment, despite huge overcapacity in the market.
Express supplies 1,350 supermarkets including Morrisons and Sainsbury  although it lost volume with Safeway last year which led to the closure of its small Middlesbrough dairy.
Smith says: "We have had a very strong year in our supermarket business, and we are pretty happy with our market share, having retained Sainsbury's volume and won a 100% Morrisons supply contract. But we would like to get a foot in the door of another multiple."
Express, which has a 25% share of the dairy industry in England and Wales, is not neglecting doorstep deliveries, although the overall doorstep sector is in decline, down 11% in 2001. It is constantly on the lookout for ways to put its urban delivery network of 106 depots and 3,500 milk rounds to fuller use.
And it has just been given a big boost in the shape of a 12-month postal licence from the Postal Services Commission so its milkmen are able to deliver business mail on their rounds.
They already deliver boxes of organic produce on the milk run, to fulfil orders placed through an Express joint venture with organic supermarket SimplyOrganic. The deal is worth £8m a year to SimplyOrganic.
{{Z SUPPLEMENTS }}
No comments yet