THE destruction of shareholder value at Dawson International is probably the worst suffered by any major Scottish company in living memory.

Since 1993, the stock has fallen from 263p to last night's pitiable 13p. Dawson must feel there is a conspiracy against it. Two or three years ago when it was beginning to show signs of dragging itself out of earlier

disasters, few could have foreseen the fundamental change in fashion away from traditional woollen goods towards the lighter fleeces.

Compounding the problems has been a near halving in the cashmere price in 1998, and there are no signs of stabilisation.

The strategy now is back to basics, to build itself up as the largest cashmere company in the Western world.

However, while Dawson was saying yesterday that there will be no more sizeable job losses, an increasing proportion of production will be sourced from Asia and other cheap labour areas to leave the British and US cashmere operations more and more as niche producers.

But at present the pound is

a weapon in the hands of the competition.

An uncomfortable ride lies ahead for the four subsidiaries that are to be sold, even if their managements have been informed that they will be cast adrift over the next 18 months or so.

The positive points are that Dawson, even as it is presently constituted, should make a noticeable pre-tax profit in the current year and that the balance sheet is in reasonable

condition. Gearing is arguably at a sensible level.

There is approximately #100m of operating assets up for sale and even at 50p in the pound would result in Dawson becoming a cash shell.

Buying it now as a penny stock could be an excellent punt as its almost inevitable fate must be to become the cashmere division of a larger entity such as Courtaulds Textiles.

It is simply too small to maintain its independence.