Cavalier Carpets Ltd is trading better than last year in the first four months of its financial year but the company warned its outlook is not rosy and New Zealand carpet sales are at the lowest levels in a long time.The company told shareholders at its a
Cavalier Carpets Ltd is trading better than last year in the first four months of its financial year but the company warned its outlook is not rosy and New Zealand carpet sales are at the lowest levels in a long time.
The company told shareholders at its annual meeting that it will pay a three cent a share interim dividend, unchanged from last year, but the 5 percent tax-paid profit it signalled in its annual report might be the best it can achieve.
The annual report indicated that the 2010/11 budget has a 5 percent increase in tax-paid earnings on the $16.6 million reported in for 2009/10.
"Our latest assessment is that, given the current New Zealand carpet market situation, a 5 percent increase might represent the top end of what we can achieve, but that somewhere in the range of last year plus or minus 5 percent should be realistic," managing director Wayne Chung said.
"On this basis, our updated earnings guidance is for tax-paid earnings in the range $15.8m to $17.5m," he said.
Revenue rose 2.5 percent, and tax-paid earnings rose 19 percent in the first four months of this year compared to last year.
The company is enjoying good market conditions in Australia and there is demand at the better end of the residential market and also for commercial refurbishments.
"However, the outlook is not as rosy as the results so far would imply. The New Zealand economy remains very subdued. Both construction activity and real estate sales are very depressed, and so is consumer spending on durables as households continue to focus on retiring debt.
"Consequently, our New Zealand carpet sales are tracking at the lowest levels that we have seen in a very long time," Mr Chung said.
