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Shares of Cavalier Corp [NZX: CAV] dropped after the carpet maker warned annual earnings will be lower than an already reduced forecast.
The carpet maker said normalised profit after tax will be between $5 million and $6 million in the 12 months ending June 30, 2014, down from the guidance of a minimum of $6 million previously advised to the market. The shares dropped 5.4 percent to $1.40.
Cavalier forecast annual tax-paid earnings of between $6 million and $9 million when it released it interim report in February. That forecast was down from the $8 million to $10 million range signalled at the annual meeting of shareholders in November.
The interim result was an improvement on last year but was down on expectations.
Cavalier did not provide a reason for the latest earnings downgrade but the New Zealand dollar is trading at a record on its trade-weighted index today and the exporter has previously cited the currency's strength as an issue.
The carpet tile business had a slow start to the year and that was anticipated to continue into the second half of the financial year and the wool scouring business had been performing poorly.
A restructuring of the business was not expected to provide additional benefits until much later in the year and into 2015.