Dawson International, the cashmere group has plunged from a £2.9 million pre-tax profit at the end of 2005 to a £3.2 million first-half loss.
This was along with unexpected problems of around a £2 million investment in the Todd & Duncan fibres and yarns business at its Kinross headquarters.
Its shares plunged another 1p to 3.75p recently and have halved in four months.
The principal reason for the loss was due to the impact of initial implementation issues relating to capital investment programme at Todd & Duncan, intensified by adverse market pricing.
Company has taken all possible remedial steps and is confident that the promised improved productivity will now be delivered by 2007.
Institutional shareholders had not been dismayed by the group's sliding share price but were disappointed with the recent setbacks although they remain hugely supportive and believe the company is taking the right steps.
Dawson has paid down its long-term debt, though net assets of £30.1m are still offset by a pension fund deficit of £29.1m.
Company and trustees were looking at a number of proposals which might 'make a £3-5 million difference', but the situation was reported stable.
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