Shareholders in Express Dairies will see their payout for the year to 31 March slashed by 60%, after the company revealed plans today to abandon a final dividend.

Express argued that it has been hit hard by difficult trading conditions. It went some way to addressing the over capacity within the liquid milk market in the UK by closing operations at four of the five plants acquired from Dublin-based firm Glanbia. Still, Express' share price was among the hardest hit in the sector following the uncertainty surrounding milk production caused by the foot and mouth crisis and the continuing wet weather.

The company commented that an interim dividend of 3.38p, which was announced last November, would form the base for dividend policy in the near future. This news follows hard on March's profit warning, which revealed that profits for the 2000-01 financial year were likely to fall £5m short of analysts' expectations.