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Cavalier Corp ordinary net profit up 22 pct

Fuseworks Media
Fuseworks Media

Wellington, Aug 20 NZPA - Carpet maker Cavalier Corp reported a 22 percent rise in full year profit from ordinary activities to $16.6 million, as interest costs fell by $2.5m.

Bottom line net profit was affected by one-off non-cash adjustments resulting in a 24 percent fall in net profit to $11.4m for the year to June.

Revenue was down 11 percent from a year earlier to $220.3m, but on a like-for-like basis and with the revenue of the Cavalier Wool Holdings wool processing operation excluded, group revenue was down just 3 percent, the company said today.

Cavalier Wool Holdings was accounted for as a subsidiary for most of the previous year, but as an equity-accounted investee for the whole of the latest year.

The Australian carpet market was recovering with residential activity remaining reasonably steady for much of the year, the company said.

Commercial activity in Australia, which had been quiet for the first three quarters of the year, was now showing strong signs of recovery. That was expected to continue and should lead to a pick-up in both new build and refurbishment work.

In this country, soft trading conditions continued in both residential and commercial sectors, with little sign of improvement on the lows reached during the depth of the global recession in the 2008/09 financial year, Cavalier said.

Carpets revenue of $199m was down 5 percent on the previous year. Earnings before interest and tax of $22.5m were up 5 percent, with a cost reduction programmes instigated in the previous year more than offsetting the fall in earnings from a lower revenue base.

Group leverage -- net interest bearing debt to sum of net interest bearing debt and shareholders' equity -- had improved to 35 percent, compared with 42 percent and 50 percent at the end of the 2009 and 2008 financial years.

"The group's significantly improved financial position over the last couple of years has put it in an excellent position to weather the continuing difficult trading environment, particularly in New Zealand, but more importantly to make the most of the opportunities that may arise when economic conditions improve," the company said.

A final dividend of 11c per share is to be paid, up 3c from a year earlier. That takes the total dividend payout for the year to 18cps, compared to 15cps a year earlier.

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