Less is more for Cavalier

Friday 18th October 2002

Making carpets may not be the world's sexiest business but it has paid off for Cavalier Corporation's long-term shareholders.

Cavalier took the critical decision to exit the E Lichtenstein wool trading business in July 2000 after failing for years to cover the cost of the high levels of capital tied up in holding wool to hedge the forward order book.

The move released about $44 million of capital, of which $25 million was returned to shareholders last year.

The full effect was felt in the latest June year, when earnings before interest and tax rose by 30% to $22.4 million.

After a slow start the carpet operations finished with a flourish on the back of strong housing markets and consumer spending on both sides of the Tasman.

The company expects another strong year with signs its market share is growing.

Cavalier's revived fortunes will be particularly gratifying for founders Tony Timpson and Grant Biel, whose holdings are now worth $37 million and $36 million respectively

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