Operating profit up at Dawson

AIM-listed textiles group Dawson International today reported an increased annual operating profit and said its performance had been “satisfactory”.

For the year ended January 2, pperating profit from continuing operations was £2m, up from £1.9m, and the group generared funds of £6.7m, Dawson’s preliminary results have revealed.

Yorkshire textile company Leeds Group has a 28.8% stake in the Scottish firm.

Dawson said there had been an “excellent performance” from its knitwear divisions but that its home furnishings private label division had been impacted by weakness of Sterling.

Over the period the company disposed of Todd & Duncan, which generated £5.4m of cash, and Dawson said it ended the year with no debt.

Chairman David Bolton, who had his position on the board confirmed yesterday, said: “In a year of global economic recession and an uncertain outlook in all of our markets, Dawson International delivered a satisfactory trading performance from continuing operations reporting an operating profit of £2m and generating funds of £6.7m.

“Through the planned exit from loss making divisions in 2009, the current year presents an opportunity to build on solid foundations and focus entirely on our profitable core businesses.  

“A key priority during the year will be to seek ways in which to reduce the pension deficit and associated costs by working with the Pension Trustees to reduce liabilities and increase returns on assets. 

“This is likely to restrict any development of the group through potential acquisitions until substantial progress is made in this area.

“Although there are some signs of markets stabilising, we expect trading to continue to be tough throughout 2010. Our approach to 2009 has demonstrated that we are able to take the necessary steps to weather these difficult trading conditions constructively and take advantage of opportunities as they present themselves.  

“With strong, focused management teams in all of our businesses the board is confident we can maintain and develop our businesses during the course of 2010.”