An Post has won a €3 million contract to provide direct marketing, mailing and billing services for a UK home shopping company.

The State postal company has signed a deal with Oxendale's, one of the UK's biggest home shopping and delivery companies, to provide it with a range of services in the Republic.

Oxendale's customers order goods online or from catalogues.

An Post will deliver them, bill customers, distribute brochures and catalogues, and handle returns in the Republic for the British company. This type of service is known as "e fulfilment" as it completes orders made online.

An Post said yesterday that the new deal would be worth in the region of €3 million a year.

It won the contract against a number of pitches from a number of international carriers, including operators based in the UK.

The orders and deliveries will be managed through An Post's main parcel delivery hub in Portlaoise, Co Laois.

An Post's sales and marketing director, Liam Sheehan, said yesterday that the deal will be an important new business for An Post.

"Catalogue and e fulfilment are strong growth areas for An Post and improvements in delivery performance help our customers to sell more," he said.

Oxendale's managing director, Ronnie Coffey, said the company expected to post around 500,000 parcels through An Post over the next year.

Oxendale & Company Limited is a sister company to JD Williams & Company Limited, the UK's leading direct home shopping company.