23/Aug/2014 - Last News Update: 16:00

Knitwear firm Dawson's share price plunges

Category: Scotland

Published: 20th Jul 2012 13:17:58

Shares in cashmere producer Dawson International plummeted after the firm said it had failed in a bid to put its pension plans into a protection fund.

The Hawick-based company said it was disappointed the pensions regulator and the pension protection fund had rejected its attempt to enter the fund.

Dawson said it would now enter talks with trustees and the regulator to "determine what its options are".

But it warned it may have to appoint administrators if the talks fail.

Dawson's share price fell more than 45% by lunchtime on Friday after the news.

Dawson has been struggling under the weight of a massive pension deficit, which last year was put at about £50m.

In a statement, the company said it could not understand why its "best possible offer" had been rejected by the regulator and the protection fund.

It said: "The Board of Dawson International is disappointed to report to shareholders that discussions with the Pension Protection Fund (PPF) and the Pensions Regulator (tPR) to seek a negotiated entry of its UK defined benefit pension plans into the PPF have been unsuccessful with these bodies rejecting all offers made by the company.

"The company will now enter into discussions with the plans' trustees and tPR to determine what its options are.

"Ultimately if no agreement can be reached which is based on the continued trading of the group's businesses, and a binding schedule of contributions is served on the company which the company is unable to fulfil in the specified timescale, the board would have no alternative but to consider appointing administrators for all or part of the group."

Dawson said it had "striven for many years" to reduce the deficit on its pension plans, making contributions of £2.2m in the last financial year alone.

But it added that the deficits had widened despite its efforts, citing as reasons "changes in actuarial assumptions" and a significant rise in associated costs including advisory fees.

Dawson said: "The PPF and tPR have rejected the best possible offer from the company which provided not only significantly more cash than is likely to be recovered through an administration process but also the opportunity for further value to be realised through part-ownership of a profitable continuing business.

"The consequence is likely to be that the plans ultimately enter the PPF, with the PPF receiving lower compensation, and furthermore approximately 200 jobs are put at risk."

Last December, Dawson said it would focus on growing its cashmere business after selling its home furnishing division for £6.5m.

Source:
BBC News External Link Show Citation

Latest News

Harvard Citation

BBC News, 2012. Knitwear firm Dawson's share price plunges [Online] (Updated 20th Jul 2012)
Available at: http://www.ukwirednews.com/news/1441746/Knitwear-firm-Dawsons-share-price-plunges [Accessed 23rd Aug 2014]

News In Other Categories

  • Iceland issues Bardarbunga volcano red alert

    Iceland has issued a red alert to the aviation industry for the Bardarbunga volcano, meaning significant ash emissions are likely.
  • John Kearns wins Foster's Edinburgh Comedy award

    A comedian who was named best newcomer at last year's Edinburgh Fringe has scooped the Foster's Comedy award for best show at this year's festival.
  • 'Inadequate' after-school club closed

    An Oxfordshire after-school club for children with learning disabilities has been closed after it was rated "inadequate" for a second time.
  • Bristol Academy extends reach overseas with first foreign students

    With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
  • BT warns it will increase phone bills by 6.5%

    BT has warned millions of customers it is increasing its prices by up to 6.5% from December this year.
  • East Midlands Ambulance Service disc of patient records 'missing'

    An NHS trust has lost a computer disc containing details of 42,000 ambulance patients.