Cavalier first-half profit soars 140% on cost cutting; trims annual earnings guidance

Cavalier Corp 12-month price history (NZX.com)

Cavalier Corp. [NZX: CAV], the listed carpet-maker, more than doubled first-half profit as it clamped down on costs, though it cut its forecast annual earnings as it restructures its carpet tile unit and contends with a strong currency crimping export returns.

Net profit jumped to $3.4 million in the six months ended Dec. 31 from $1.4 million a year earlier, the Auckland-based company said in a statement. Sales increased 1 percent to $101.8 million as cost of sales declined 4.4 percent to $73 million.

Cavalier lowered its forecast for annual normalised earnings to between $6 million and $9 million, from previous guidance of $8 million to $10 million, and compared with normalised earnings of $6.6 million last financial year.

The carpet maker has cut costs, including closing operations, reducing brands and sacking staff, in the face of stiff competition from cheaper synthetic carpets and a sharp spike in the price of coarse wool, which has impacted margins.

Sales in New Zealand gained 9.7 percent to $45.4 million, while Australian revenue fell 6.4 percent to $52.9 million as returns were crimped by a rise in the New Zealand dollar. Australia makes up 52 percent of total revenue, down from 56 percent in 2012.

Cavalier shares fell 1.2 percent to $1.68 and have dropped 1.2 percent this year, lagging a 4.1 percent gain on the NZX All Index, a capital measure of all domestic stocks, over the same period.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7841 0.0013 0.17%
AUD 0.8943 0.0002 0.02%
EUR 0.6198 0.0010 0.16%
GBP 0.4887 0.0004 0.08%
HKD 6.0833 0.0113 0.19%
JPY 84.6660 0.0190 0.02%

Commods

Commodity Price Change Time
Gold Index 1228.6 -12.490 2014-10-23T00:
Oil Brent 86.8 2.120 2014-10-23T00:
Oil Nymex 82.0 1.530 2014-10-23T00:
Silver Index 17.1 -0.080 2014-10-23T00:

Indices

Symbol Open High Last %
NZX 50 5292.8 5344.4 5292.8 0.77%
NASDAQ 4427.4 4475.6 4382.9 1.60%
DAX 9008.6 9019.2 9047.3 -0.53%
DJI 16468.1 16767.5 16461.3 1.32%
FTSE 6419.1 6419.1 6419.1 -0.24%
HKSE 23311.9 23352.6 23333.2 -0.13%
NI225 15354.4 15377.0 15139.0 1.01%