Bottom Line: Dawson's delays

SHAREHOLDERS have every right to start losing patience with Dawson International. While the stock market has had one of its best runs for years, Dawson's shares have underperformed the market average by 50 per cent during the past 12 months.

At the heart of the problem is JE Morgan Apparel, a US producer of basic clothes for the mass market. Morgan has been steadily losing grip of a market now dominated by cheap importers from the Third World. In the six months to last September it lost pounds 8m.

Dawson confirmed its wish to get out of the troublesome Morgan yesterday but shareholders should ask why it ever tried to run with it. It says little for strategic planning abilities that so much time and money was expended trying to make a success of an operation that looked doomed from the start.

Dawson's ownership of the prestigious Pringle and Ballantyne sweater brands means takeover talk will persist. But Dawson carries debts of pounds 100m (75 per cent gearing) and asset sales may be required to reduce the burden.