Dawson performance ‘deeply disappointing’

Commenting on the Scottish company’s results for the year ended 29 December, chief executive Andy Bartmess said: "Dawson International's financial performance during the past year can only be described as deeply disappointing. He added however, that each of its spinning, knitwear and home furnishing divisions had made a positive start to trading in 2008. In particular, the results of the spinning and home furnishings divisions were both much improved compared with 2007 and given stable market conditions in the second half, it was possible that Dawson could see each division delivering profits in 2008. In 2007, group turnover reduced by 9.3 per cent to £92.6 million (2006: £102.1million) and a pre-tax loss of £1.6 million (2006: £3.7million loss) was incurred. The performance of the Manchester-based Dorma business, which designs and sources bed linen and related products, did not improve as rapidly as expected because the Dawson underestimated the time and investment required to turn around this segment of its business. The Spinning division, which comprises the Todd & Duncan business based in Kinross, Scotland, is a manufacturer of high quality cashmere, blended and woollen yarns. It sources most of its raw material from China and exports 60 per cent of its products to the European market. Bartmess said Todd & Duncan continued to face margin pressures due to rising raw material prices. Turnover remained level but profitability was impacted due to fierce market competition and price increases it put in place had not been sufficient to move the business into profit. Financial performance within the Knitwear division, which comprises the Dawson Forte and Barrie businesses, remained steady. The Dawson Forte Cashmere business is based in Boston Massachusetts, USA, and the Barrie Knitwear business based in Hawick, Scotland. Dawson Forte sources cashmere garments from China for US private label retail programmes and its own branded cashmere collection 'Kinross'. Barrie manufactures highest quality cashmere garments sourcing most of its yarn from the groups’s Spinning division and selling to some of the world's most prestigious couture houses, department stores and private retail outlets.