Cavalier expects annual earnings to rise following restructure

Tuesday 24th November 2015

Cavalier Corp expects annual earnings to rise this year as the New Zealand carpet maker restructures its business to boost profitability.

Normalised profit is expected to be in the range of $3 million-to-$5 million in the year ending June 30, 2016, the Auckland based company said in a statement. That's ahead of the year earlier normalised earnings of $1.1 million.

Cavalier said the profit forecast for this year didn't include a one-time after-tax gain of $2 million from the sale of its Sydney facility. Last year, the company's earnings were hit by one-time items including asset writedowns and restructuring costs which resulted in its worst-ever loss of $25.7 million.

The company said it expects to "return to acceptable levels of profitability" in the 2017 financial year, reiterating its previous guidance.

Cavalier, whose shares have lost a third of their value so far this year, has changed its chief executive and chairman and rejuvenated its board in an attempt to restructure the business and return it back to black. The company is looking at asset sales, job cuts and outsourcing to reduce debt and return to profit.

The stock last traded at 41 cents, valuing the company at $28.2 million.

BusinessDesk.co.nz

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