Cavalier Carpet Sees Lower Earnings

Auckland, NZ, Feb. 23, 2009--Cavalier Carpets reported a 7 percent decline in interim profit, cut its dividend, and forecast a 30 to 40 percent fall in annual profit.

The carpetmaker said its debt levels had increased significantly owing to higher stock levels and capital expenditure.

"Management and the board are very conscious that in the current financial turmoil, balance sheet management is crucial, and there are firm plans in place to reduce debt before the end of the financial year," the company said.

The firm reported a $7.4 million after-tax profit in the six months to December 31, down from $8 million in the same period last year. Revenue rose 18 per cent to $132 million but this included $29 million from the acquired Norman Ellison Carpet business. On a like-for-like basis, revenue was down 8 per cent on last year.

The company is assuming the very soft trading conditions it has experienced since October will continue but not substantially worsen.

It is forecasting a profit of between $11 million and $13 million.