New Zealand Carpetmaker Cavalier Tops Profit for 3
Auckland, New Zealand, August 23--Cavalier Corporation has topped its forecasts with a 15 per cent jump in profit to $21 million for the June year, according to Stuff.co.nz.
It is the third year in a row the carpet maker has set a new record profit, and managing director Wayne Chung indicated a fourth was on the way. Cavalier is budgeting for an increase in after-tax earnings to $22.5 million for the present year, a 7 per cent gain on the latest result.
The company was expecting some downturn in the carpet market this year, given that a drop in building activity had been widely predicted, Chung said. But that would be offset by a gain in market share related to increased capacity and new tufting technology. Cavalier also expected lower costs because of its expanded yarn-making capabilities.
Forsyth Barr analyst John Cairns said the 2004 profit was a creditable result and the 2005 guidance was positive. The carpet manufacturer also topped its own prediction of a $20 million profit for the year, made in February.
Cavalier's core business - broadloom carpet - enjoyed favorable conditions in New Zealand and Australia as new house building had reached unprecedented levels, Chung said. But the unit would have reached higher sales levels than the $127.9 million recorded, if it had not been for yarn manufacturing constraints, he said.
Cavalier had introduced a program to increase yarn-making capacity by 25 per cent and had bought a tufting machine for $2.5 million which would produce carpet for sale this year.
