Cavalier projects $2m loss for FY17 in latest earnings downgrade
Cavalier Corp's outlook has deterioriated further since its last earnings downgrade in February and the carpet maker is warning it now expects to post a loss of around $2 million on a normalised earnings after tax basis in the year to June 30.
"Weaker demand in the New Zealand retail sector and exceptional competitor activity on both sides of the Tasman" were behind the second outlook downgrade this year. The company had forecast earnings of between $3 million and $5 million last November, but pulled that back to a predicted breakeven in an announcement in early February.
"Difficult trading conditions" persisted in Australia, chief executive Paul Alston said in a statement to the NZX.
"Cavalier has responded and will continue to respond as necessary to defend share in these markets. The depressed wool market that the directors discussed in February has continued, adversely impacting the performance of our wool acquisition business and earnings from our 27.5 percent interest in Cavalier Wool Holdings.
"Directors are still expecting improved performance in 2017/18 when the benefit of significantly reduced wool price and other cost-out measures come through," Alston said.
Cavalier shares closed yesterday at 55 cents, having fallen 18 percent in the last 12 months.