UK: Dawson FY overshadowed by pension deficit
- FY operating profit up 5.5% to GBP2m (US$3m)
- Knitwear sales drop 17%
- Pension liabilities trebled to GBP19.3m
Scottish cashmere firm Dawson International Plc has delivered what it describes as a "satisfactory" full year, helped by a strong performance from its knitwear divisions, but said an increase in pension liabilities represents a challenge for the company.
The Kinross-based firm posted an operating profit of GBP2m (US$3m) from continuing operations, up 5.5% on last year's GBP1.9m.
But it slumped to a net loss of GBP5.8m for the year to 2 January, compared with a profit of £476,000 last time.
Dawson said its UK and US knitwear businesses were boosted by high margin sales to couture customers, but the weakness of sterling meant its Home Furnishings unit was hit by higher product costs.
Despite a 17% drop in sales at the company's Knitwear divisions, they managed to return an operating profit of GBP4.9m.
The Barrie knitwear business in the UK designs and manufactures for some of the world's top international fashion designers.
And the Dawson Forte Cashmere business in the US sources cashmere garments for US private label retail programmes and its own branded collection called Kinross.
Looking ahead, Dawson said it was in talks with pension trustees to reduce its pension deficit, after its liabilities almost trebled in the past year to GBP19.3m.
"Although there are some signs of markets stabilising, we expect trading to continue to be tough throughout 2010," said chief executive Andy Bartmess.
In particular, he said, selling conditions remain very challenging, particularly in the US, while commodity price inflation is hitting the cost of cashmere and cotton.
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