Cavalier forecasts FY loss after charges - no dividend, shares tumble

BUSINESSDESK: Cavalier Corp, New Zealand’s only listed carpet maker, said it may post a full-year loss as it takes steps to restructure its broadloom carpet business, ruling out any dividend payment. 

The shares fell 11% to a two-month low.

Underlying earnings will be in the range of $3 million to $5m this year, though the Auckland-based company anticipates “substantial one-off costs as it repositions the broadloom carpet businesses to cope with this difficult operating environment”.

Normalised earnings in 2011 were $17.3m.

The timing of the changes and associated costs is difficult to project but were they all to be taken in the current year, underlying earnings would turn to a loss of $1m to $3m, chief executive Colin McKenzie said.

“Broadloom carpet margins are particularly weak, as we are having to absorb high wool prices of recent times.”  

Market conditions in Australia and New Zealand “remain very soft” with volumes and margins “under pressure”.

Cavalier said restructuring its carpet business should pay off by 2013, when it is anticipating a return to profit of $10m to $12m, based on a modest improvement in market conditions, cost cutting and lower prices for wool.

Shares of Cavalier fell 18 cents to $1.95 and have tumbled 44% in the past 12 months.

McKenzie took over as CEO on March 15 from Wayne Chung, who stepped down after eight years in the job.

Mr McKenzie also joined Mr Chung on the company’s board.

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

1 Comment & Question

Commenter icon key: Subscriber Verified

Carpet is hideous, gets full of mold and dust mites. Polished floors are the only way to go for a healthy home. Cavalier is a dinosaur

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7878 -0.0004 -0.05%
AUD 0.9091 0.0005 0.06%
EUR 0.6356 -0.0003 -0.05%
GBP 0.5032 0.0001 0.02%
HKD 6.1123 -0.0013 -0.02%
JPY 92.8410 0.0020 0.00%

Commods

Commodity Price Change Time
Gold Index 1201.1 7.660 2014-11-21T00:
Oil Brent 78.6 -0.120 2014-11-21T00:
Oil Nymex 76.5 0.690 2014-11-21T00:
Silver Index 16.4 0.260 2014-11-21T00:

Indices

Symbol Open High Last %
NZX 50 5526.9 5526.9 5526.9 -0.56%
NASDAQ 4751.0 4751.6 4701.9 0.24%
DAX 9521.2 9736.1 9484.0 2.62%
DJI 17721.0 17894.8 17719.0 0.51%
FTSE 6678.9 6773.1 6678.9 1.08%
HKSE 23353.7 23508.0 23349.6 0.37%
NI225 17285.7 17381.6 17300.9 0.33%