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)


Got a question about this story? Leave it in Comments & Questions below.

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

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7201 0.0005 0.07%
AUD 0.9380 0.0001 0.01%
EUR 0.6813 0.0002 0.03%
GBP 0.5771 0.0000 0.00%
HKD 5.5889 0.0038 0.07%
JPY 80.7310 0.1470 0.18%

Commods

Commodity Price Change Time
Gold Index 1258.3 7.630 2017-02-24T00:
Oil Brent 56.3 -0.650 2017-02-24T00:
Oil Nymex 54.0 -0.500 2017-02-24T00:
Silver Index 18.3 0.220 2017-02-24T00:

Indices

Symbol Open High Last %
NZX 50 7090.4 7099.6 7089.5 -0.44%
NASDAQ 5802.3 5845.3 5835.5 0.17%
DAX 11920.9 11934.6 11947.8 -1.20%
DJI 20751.9 20821.8 20810.3 0.05%
FTSE 7271.4 7271.9 7271.4 -0.38%
HKSE 24115.6 24121.9 24114.9 -0.62%
NI225 19232.1 19381.1 19371.5 -0.45%
ASX 5784.7 5784.7 5784.7 -0.79%