News International terminates Dawson Holdings contract

News International has cancelled its £30 million contract with newspaper distributor Dawson Holdings.

The newspaper publishing group is the latest company to terminate its deal with Dawson Holdings, forcing the firm to close its magazine and newspaper distribution arm.

News International’s multimillion pound-contract is due to be cancelled “almost immediately”, according to Dawson Holdings.

Dawson is also expected to lose magazine contracts with Seymour Distribution, the joint venture between Dennis Publishing and Frontline, as well as its deal with Comag, the Natmags and Condé Nast venture.

In a statement released today, Dawson said: “This is disappointing for Dawson, although NIDL (News International Distribution Limited) was in any event due to diminish its use of the Dawson network significantly from July 2009.

“The board had anticipated that the turnover from this contract would be approximately £30m from July 2009.”

News International plans to focus on its contracts with distributors Smiths, independent wholesaler Weller and its own direct service.

Last month, Trinity Mirror also terminated its £65 million-a-year contract with Dawson after the company announced plans to cease operating (see Trinity Mirror cancels £65m distribution contract).

At the time, Dawson said it was set to lose several high-profile contracts, including a £52 million contract with Telegraph Media Group and a £84 million deal with Associated Newspapers.

The company reported a loss before tax of £17.4 million for the 26 weeks to 28 March and said that it will suspend dividend payments “for the immediately foreseeable future”.

Dawson Holding attributed the operating loss to a one-off impairment charge and reorganisation costs of £23.5 million at Dawson News.