Doorstep Delivery

We'll soon be asking the milkman to drop off CDs and books with our pintas, finds Heather Tomlinson

The milkmen of Express Dairies, the milk and cream producer, will soon be delivering contact lenses, CDs and books during the morning round.

Express will discuss the service in its full-year results, to be posted tomorrow. The company is expected to reveal profits of £11.7m, after restructuring costs, and sales of £675m. This is compared to a lost last year of £10.1m. However, its sales have fallen following the disposal of subsidiaries such as its UHT milk-making business.

The company won a postal licence last year, so it is able to compete with Royal Mail for the delivery of letters and parcels. It is already delivering around 20,000 items per week, although analysts are not expecting this to have had a significant effect on the results.

However, Express will disclose it is in talks to start delivering more goods in an expansion of its service, whichcovers half of the UK's postcodes. The company is in the middle of a £155m merger with the Swedish and Danish milk co-operative Arla Foods, the largest dairy co-op in Europe, which is owned by 13,600 farmers.

The bid is subject to approval from the competition authorities in the UK, as Arla already has a large dairy business in this country.

Express has been delivering post since last year when it obtained an interim licence, but in March it was awarded a seven-year licence to deliver up to 46 million items annually. If the bid from Arla succeeds, the combined company would be able to deliver post in a larger region of the UK, as Arla has complementary delivery businesses.

The Royal Mail has complained bitterly about the introduction of competition in postal services, as it says the private companies will cherry-pick the most profitable routes while it has to deliver to all the far-flung places of the UK.