Dawson International, the knitwear and spinning firm, narrowed its operating losses from £3.8 million to £1.1m in the six months to June 28.
Dawson International sales rose slightly from £40.1m to £41.7m during the period.
Dawson International said that its spinning division, which includes the Todd & Duncan cashmere yarn business, saw sales rise by £1.2m to £15.8m and profits rise from £100,000 to £700,000. Its Barrie and Forte knitwear business saw first half sales rise by £1.2m to £6.3m and operating loss shrank from £900,000 to £400,000.
Dawson International chairman Mike Hartley said: "I am encouraged by the performance of all of our businesses in the first half of 2008. Despite challenging economic conditions turnover has increased from £40.2m to £41.7m and the first half operating loss before non-recurring items has reduced from £3.8m to £1.1m with all divisions improving their results. Order books for the second half are currently in line with our expectations."
Hartley added: "The economic climate is, however, challenging in all of our markets and we remain cautious in our assessment of the impact of consumer spending levels in our outlook for the full year and into 2009. The disposal of the Dorma branded division will benefit funding and improve profitability in the longer term. We will continue to focus on improving profitability and implement changes where necessary to deliver acceptable returns on assets employed across all of our businesses."