Milkmen, once an integral part of the UK cultural pastiche, may be about to make a comeback, by taking on at their own game the supermarkets which have threatened to run them out of business.

Dairy Crest has said the roll-out of its so-called "milk&more" service, in which its milkmen sell groceries alongside traditional dairy products, had reduced to 6% the annual decline in its doorstep deliveries from 10% last year.

With 250,000 users signed-up to the service so far, helped by a national roll-out since September, the service may even see home-to-home milk deliveries return to growth.

"It is difficult precisely to predict how milk&more will change our business," Mark Allen, the Dairy Crest chief executive said.

"From what we know today it is possible that in the future milk&more could eliminate doorstep decline, and eventually provide growth in total doorstep sales at acceptable margins."

Written off 

The revival of doorstep deliveries would represent an astonishing turnaround for a sector written off when the rise of supermarkets, selling cut-price milk, lured customers able to store foods for long periods in home refrigerators.

The proportion of milk sold by milkmen slumped from 80% in the late 1980s to roughly 10% today.

However, milk&more and rival services are tapping demand, fostered in part by supermarkets themselves, for home deliveries, an option which allows customers � in essence � to shop at home, using the internet, at any hour, rather than braving traffic congestion.

Organic growers have also popularised the home-delivery culture by promoting once-a-week deliveries of vegetable boxes.

Dairies revival 

Dairy Crest's update came as it unveiled underlying pre-tax profits up 5% at �83.5m for the year to the end of March, driven by a quadrupling to �34.9m in operating profits at its main Dairies division.

The improvement was helped by the strong bulk cream returns also noted by rival Robert Wiseman Dairies in results on Monday, with milk sales to retailers growing 9% by volume.

"The division has bounced back from a difficult 2008-09, and is benefiting from a series of efficiency projects and higher cream prices," Anthony Fry, the Dairy Crest chairman, said.

The company's advertising splurge on key products raised sales of brands such as Country Life butter and Cathedral City cheddar, but ate into margins, with profits falling in both cheese and spreads divisions.

Group revenues were, at �1.63bn, 1.1% lower than a year before.

Market reaction 

In the City, the results received a mixed welcome from analysts at Panmure Gordon, who kept a "hold" rating on Dairy Crest shares with a price target of 370p.

"On a divisional basis Cheese profitability was lower than our forecasts but offset by a stronger performance in the Dairies business," the broker said.

At rival broker Evolution, analyst Warren Ackerman said that Dairy Crest's "solid" investment case was not reflected in its ratings, restating a "buy" rating on the stock and a price target of 425p. 

"A core part of our Dairy Crest investment case is about dairies margin expansion. This is starting to come through but we think there is more to go for," he said.

The shares closed 2.4% higher at 362p in London.