Feltex Earnings Up Before Costs of Exiting Manager
Wellington, New Zealand, July 28--Feltex Carpets Ltd., a New Zealand- based carpet maker that may start merger talks with its biggest rival, said full-year earnings rose as it increased sales and reduced rebates to retailers.
Profit in the year ended June 30 was NZ$13 million ($8.8 million) before costs to cover the departure of Chief Executive Sam Magill and four other executives, the company said today, citing unaudited figures. Net income in 2004 was NZ$11.2 million.
Feltex has lost two thirds of its market value this year, the worst performance on New Zealand's benchmark stock index, as higher costs of materials such as nylon surged with the price of oil and the company contended with cheaper imported carpets. Pressure from imports and tighter margins are continuing in the first quarter, the company said today.
The company today said it is seeking financial information from Godfrey Hirst Australia Pty., the Geelong, Australia-based rival that last month acquired a 10 percent stake in Feltex and said it wanted to start merger talks.
Feltex, which went public after selling shares at NZ$1.70 apiece in an initial public offering in June 2004, slashed its profit forecast on April 1 to between NZ$15 million and NZ$16 million, from a previous target of as much as NZ$24 million. It cut the forecast again on June 20 and announced Magill would leave the company.
Feltex shares rose 3 cents, or 5.2 percent to 61 cents at 10:01 a.m. in Wellington. The company will release its audited full-year earnings Aug. 25.
