Cavalier Corporation returns to profit

26 August 2016

Cavalier Corporation returns to profit

New Zealand carpet maker Cavalier Corporation has returned to a profitable position posting a net profit after tax of $3.1 million for the financial year ended 30 June 2016.

This represents a significant turnaround from the company’s write downs and recorded loss of $25.7 million in 2015.

Both net profit and normalised profit of $6.3 million after tax were slightly up on the earnings guidance Cavalier issued in June.

Cavalier Corporation CEO Paul Alston says the company’s performance is encouraging and representative of the transformation it is undertaking with debt reduction and a dual focus on revenue and cost.

“We’ve seen strong performance from our core broadloom carpet business which also experienced a better than expected finish to the financial year, our 50 per cent stake in in wool scouring business Cavalier Wool Holdings also provided good returns.

“We’ve also continued to reduce our cost base and taken tough but essential steps to right-size and future-proof the business by consolidating our wool spinning operations.”

Cavalier Corporation has reduced its debt position by $17 million (from $54 million to $37 million) over the financial year.

Alston says this was critical to get the business back on track.

“We have pursued what has been a very successful debt reduction programme. While our debt position is now much more sustainable we remain focused on further reducing debt for the long term benefit of the business.”

In FY16 and moving into the new financial year Cavalier Corporation, through its hero brand Cavalier Bremworth, has sharpened up its product offerings and moved to reposition itself as more of a market leading lifestyle brand.

“Cavalier Bremworth is a New Zealand brand that is synonymous with quality and trust we’d like to extend that to being known as a customer centric market innovator, we are doing this through our new World of Difference positioning and a range of exciting new products and initiatives.”

“We recently launched a new carpet that’s made here in South Auckland using fibre from 100% recycled nylon, our customers can expect more of this sort of innovation along with the best wool carpets available.”

Alston says while the company is still transforming the outlook for Cavalier Corporation is positive.

ends

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