Cavalier warns on earnings again, shares fall 5.4%
By Pam Graham
June 26 (BusinessDesk) – Shares of Cavalier Corp dropped after the carpet maker warned annual earnings will be lower than an already reduced forecast.
The carpet maker said normalised profit after tax will be between $5 million and $6 million in the 12 months ending June 30, 2014, down from the guidance of a minimum of $6 million previously advised to the market. The shares dropped 5.4 percent to $1.40.
Cavalier forecast annual tax-paid earnings of between $6 million and $9 million when it released it interim report in February. That forecast was down from the $8 million to $10 million range signalled at the annual meeting of shareholders in November.
The interim result was an improvement on last year but was down on expectations.
Cavalier did not provide a reason for the latest earnings downgrade but the New Zealand dollar is trading at a record on its trade-weighted index today and the exporter has previously cited the currency’s strength as an issue.
The carpet tile business had a slow start to the year and that was anticipated to continue into the second half of the financial year and the wool scouring business had been performing poorly.
A restructuring of the business was not expected to provide additional benefits until much later in the year and into 2015.