Cashmere specialist Dawson International which owns the Barrie knitwear brand and cashmere spinner Todd & Duncan, has issued a disappointing preliminary financial statement for the period ending 29 December 2007.

Key points

- 2007 trading performance disappointing

- Increased raw material costs impact Spinning division results

- Strong performance from Knitwear division

- Second half progress at Home Furnishings division after poor first half

- Sale and leaseback of Kinross property generates £3.5 million cash, a £2.5 million gain over net book value

- Significant reduction in pension scheme deficit

Commenting on the preliminary results for the year ended 29 December 2007 Andy Bartmess, Chief Executive said: “Dawson International’s financial performance during the past year can only be described as deeply disappointing. However, these financial results mask real progress in key areas of the business, which the Board believes will strengthen its position and lay a foundation for improved future performance.

“Each division has made a positive start to trading in 2008. In particular, the year to date results of the Spinning and Home Furnishings divisions are both much improved compared with 2007. This is due to excellent progress made in these divisions during the year and also, in the case of the Spinning division, reflects more favourable exchange rates. Given stable market conditions in the second half, it is possible that we could see each of Dawson’s operating divisions deliver a positive operating profit in 2008. The focus will remain on returning the Group to sustainable profit with each business contributing an acceptable return on capital employed. The Board is conscious of the current volatility in the global economic cycle and will be monitoring market conditions closely.”