NEW ZEALAND, October 13--Feltex Carpets says it made a $4.5 million profit in the three months to September 30 and is on track to meet its targeted net profit of $28.6 million for this financial year, according to www.stuff.co.nz
But if the Kiwi dollar strengthened further against the Australian dollar, this could begin to affect the company's results, chairman Tim Saunders said.
The company held its first annual meeting yesterday since relisting on the stock exchange in June after a gap of nearly 20 years. It reported in August a net profit of $11.1 million, beating the $10.1 million forecast in the prospectus for its float.
Saunders told shareholders that the board and directors were "not at all happy" with Feltex's share price. The stock traded yesterday at $1.56, well below its issue price of $1.70.
"It doesn't reflect the inherent value of the company," Saunders said.
Part of the reason for the low share price was that the market was concerned about the impact of a strong New Zealand dollar on the company's operations.
He said sales, forecast at $348 million for the year to June 30, 2005, might be more difficult to achieve, partly because of the currency conversion between Australia and New Zealand.
Also, "one operating issue is that we're aiming for the higher end of the market. We want to maintain our margins."
The housing market in Australia had "bounced up slightly" in the past few months, "which we hadn't expected", he said. The market had slowed in New Zealand but not as much as expected.
"Overall, the carpet market is expected to remain stable within the period to June 2005," chief executive Sam Magill told shareholders.
