Cavalier says profit rose before tax impact

Cavalier says full-year profit was higher than forecast before impact of tax changes

July 16 (BusinessDesk) – Cavalier Corp., the only listed carpet-maker in New Zealand, said full-year profit was higher than forecast though net income was eroded by the impact of changes to tax rules.

Profit was $16.3 million to $16.7 million in the year ended June 30, the company said in a statement. That tops its previous guidance for tax-paid earnings of between $14.5 million and $15.5 million and is as much as 22% up on the previous year’s $13.7 million..

Once the impact of the government’s 2010 Budget tax changes on the deferred tax position of the group are taken into account, though, net profit was reduced to between $11 million to $11.4 million, managing director W K Chung said.

“The adjustments to deferred tax are one-off accounting entries and have no impact on the Group’s underlying profitability, cash flows and therefore , its dividend policy or financing covenants,” Chung said. “They will, however, have the effect of reducing the report tax-paid profit.”

Shares of Cavalier fell 0.4% to $2.45 on the NZX today and have declined 6% this year.

(BusinessDesk)

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