HALF YEAR REPORT FOR THE PERIOD ENDED 1 OCTOBER 2011

KEY POINTS

• Home Furnishings business sold on 17 May, estimated net proceeds £6.5 million.
• £4.4 million net proceeds received in the period.
• Loss incurred in the six weeks to disposal £0.5 million.
• Dawson now strategically positioned as a specialist cashmere business.

Continuing operations highlights:

• Turnover £19.8 million (2010: £21.5 million).
• Operating profit before exceptional items £0.3 million (2010: £1.2 million).
• Operating profit after exceptional items £0.4 million (2010: £1.8 million).
• Margins of US business impacted by significant cashmere price increases in the past two years.
• Net cash outflow £5.1 million (2010: £7.1 million), includes net proceeds from the sale of the Home Furnishings business of £4.4 million and additional payments to pension schemes of £2.3 million.
• Strong cash position of £5.0 million.

Commenting on the half year results, chairman, David Bolton said:

“I am pleased to report a profit after tax of £0.6 million for the first half of the financial year as we progress our strategy to re-position and develop the Company as a specialist cashmere business, the area in which we are renowned. The disposal of our non-cashmere business, Dawson Home Group Limited, was completed on 17 May 2011 and our focus is now on growing our cashmere business by expanding our customer base in both new and existing geographical areas and expanding our product offering in both cashmere and complementary accessories.

We entered this financial year recognising that difficult global economic conditions coupled with significant raw material price increases in each of the last two years would have a negative impact on our results. We have traded ahead of our expectations in the first half of the year but this is due at least in part to the timing of sales and our expectations for the full year remain broadly unchanged.

We are cautiously hopeful that our negotiations with the Pensions Trustees and the Pensions Regulator are reaching a conclusion which will provide a measure of certainty for our pension scheme members, employees, customers and shareholders going forward.”

For further information please contact:

David Bolton, Chairman	07710 497166
David Cooper, Group Finance Director	07836 299548
Zoe Biddick, Biddicks Financial Public Relations	0203 178 6378
Robin Gwyn, WH Ireland	0161 832 2174