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Dawson on slide as more contracts lost
24.03.09
Shares in Dawson Holdings slumped again today after the newspaper and magazine distributor said it has now lost four key contracts in two weeks.
The shares, which fell 12¼p to 13p, were at 50p two weeks ago, and have this year lost more than 80%.
Contracts with Associated Newspapers, publisher of the Daily Mail and Mail on Sunday, and Comag will not be renewed next year. Dawson has also lost contracts with magazine distributors Frontline and Seymour.
The division has lost £255 million, or 37% of its revenues, through the four contracts. Most of them run for another 18 months, and Dawson said it was looking at its legal rights and the profit implications.
Smiths News and John Menzies between them picked up much of the lost business. Despite an Office of Fair Trading inquiry into newspaper distribution, customers seem to have chosen to divide most of their business between the two players, with Smiths dominating the South and Menzies the North.
Smiths News shares rose 11.2p to 81p while Menzies were 13.7p better at 58p.
