TIDMDWSN

RNS Number : 7808G

Dawson International PLC

18 May 2011

DWSN

Dawson International PLC

Disposal of Dawson Home Group Limited

Dawson International plc ("the Group") today announces the sale of Dawson Home Group Limited ("DHG") to Brookmann Home Limited ("Brookmann"). As part of the sale agreement, Brookmann has undertaken to purchase certain inventories related to the DHG business which are currently held by another Group company (the "Retained Inventory") over a period of six months from completion.

DHG designs and sources private label bed-linen from around the world for a number of well known retailers in the UK. In addition it sells its own product under the Vantona brand to wholesale customers. The business employs 53 staff and will continue to operate from its base in Ardwick, Manchester.

The initial consideration is based on the estimated net assets of DHG at completion of GBP6.0 million, less a discount of GBP2.0 million. The net consideration of GBP4.0 million has been received in cash. The Retained Inventory of approximately GBP2.5 million will be supplied to DHG on a consignment basis at cost, being paid for monthly as used, with any balance being settled after six months. As a consequence of the disposal, the Group will therefore liquidate approximately GBP8.5m of net assets, receiving an estimated total gross consideration of GBP6.5m, less estimated costs of GBP0.5 million. The results of the Group for the 15 months to 31 March 2011 are now expected to be lower than previously anticipated by GBP2.5m, being the impairment charge in respect of the sale of DHG inclusive of disposal costs.

In the 12 months to 1 January 2011, the unaudited results for DHG showed an operating loss of GBP1.5 million after exceptional charges on turnover of GBP30.3 million.

The proceeds of the sale will be applied towards achieving the longer term strategic objectives of the Group, including a possible resolution of the pension funding issues.

David Bolton, Chairman, commented:

"This transaction is a positive result for all parties. DHG has experienced challenging trading conditions in recent years and, more recently, has suffered from increasing cotton raw material costs. Brookmann has strategic alliances with many key manufacturers around the world who will help to mitigate these cost pressures, whilst DHG offers Brookmann a well-known and respected UK outlet for its overseas manufacturing capabilities. The combination with Brookmann is expected to strengthen DHG's competitive position.

The conclusion of the sale allows the Group to focus on its core cashmere activities. We have already taken initiatives to bring our remaining businesses, Barrie and Dawson Forte, together under one management team as Dawson Cashmere and we will continue to pursue our strategy which will support the recovery and growth of these businesses."

For further information please contact:

 
 David Bolton, Chairman:            07710 497166 
  David Cooper, Group Finance        07836 299548 
  Director:                          020 3178 6378 
  Zoe Biddick, Biddicks Financial    0161 832 2174 
  Public Relations: 
  Robin Gwyn, WH Ireland:

This information is provided by RNS

The company news service from the London Stock Exchange

END

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