Tough competition to supply milk to shops and supermarkets has hit Express Dairies' profits.

The company also said it had seen falling demand for its traditional doorstep delivery service.

Pre-tax profits before one-off items for the six months to the end of September dipped 44% from last year to �13.3m.

But Express added it was making good progress with its cost cutting and reorganisation measures.

Tough times

The company admitted that trading conditions during the six-month period "proved even tougher than we had anticipated."

Express is competing with rivals such as Dairy Crest and Robert Wiseman Dairies, and overcapacity in the industry has led to a fierce battle to supply the big retailers.

Express said it had managed to improve its market share, but only at the expense of lower profit margins.

Its doorstep delivery service continued to be hit by falling demand, and also suffered from the rising price of raw milk.

Restructuring

There was better news on the company's attempts to cut costs through its reorganisation process.

Express chairman Lord Haskins said the firm was making "good progress" with its restructuring, and the firm aims to save �9m by the end of the year.

This year the company has sold operations in Northern Ireland and Durham, and has also disposed of two bottling plants.

The company said by the time the effects of the changes feed through, it will employ 1,250 fewer workers than a year ago.