Wellington, New Zealand, September 30, 2005--Feltex Carpets Ltd. said Friday it may increase its role as a synthetic carpet importer, and is reviewing the extent of its presence in high-volume segments of the carpet-making market.
The fresh details of the company's widespread operational review now underway at the New Zealand-based company are contained in its latest annual report, filed at the stock exchange Friday.
Tim Saunders, chairman of Feltex, said in the report that the company became aware earlier this year that its cost structures were too high, its average production cycle too long, and many of its systems "too rigid."
A review of Feltex's operations was ordered in June after the company shocked investors with a second sizable profit downgrade. The first warning came just five weeks after Feltex told the market it could achieve the profit projections contained in its prospectus when it listed on the stock exchange in the middle of 2004.
The company's stock price dived along with its profit and has recently been trading around NZ$0.50 a share, well below the NZ$1.70 that investors paid for shares in the initial public offering.
Saunders said that most of the decisions arising from the operational review will be made by October, and "we are hopeful that the major initiatives will all be in place (albeit not fully implemented) by December."
