The rebuilding of Christchurch, coupled with current wool
prices, should prove ''quite a positive'' for carpet
manufacturer Cavalier Corporation, Craigs Investment Partners
broker Peter McIntyre believes.
At the moment, Cavalier was ''at the bottom of the cycle''
and he believed the next 12 months should be more positive.
Craigs analysts were expecting a net profit after tax of $1.3
million when the company reports next week, down 62.3% for
the previous corresponding period, but an improvement on the
second half of 2012.
Any housing recovery globally, traction for which was now
being seen, was positive for Cavalier, Mr McIntyre said.
The markets would be looking for guidance on when then the
company, like others, would be implementing a dividend again,
Forsyth Barr analysts said subdued carpet demand,
particularly in the Australian commercial segment, continued
to dampen Cavalier's revenue performance.
Margins would begin to benefit from lower wool input costs
and restructuring initiatives to better align capacity to
underlying carpet demand.
Meanwhile, Federated Farmers meat and fibre chairwoman
Jeanette Maxwell has advocated for strong wool to be given a
''leading'' role in rebuilding.
The Canterbury Earthquake Recovery Authority had estimated
two million square metres of floor coverings would be
required, Mrs Maxwell said, ''enough to line every square
centimetre of a country the size of Monaco''.
She urged the Ministry for Primary Industries to work within
government to get wool ''fully into the rebuild'' both as a
floor covering and as insulation.
Last month, Japan's Sumitomo Corporation announced it had
sold Summit Wool Spinners plant in Oamaru to carpet
manufacturer Godfrey Hirst, resulting in more than 190
At that time, Godfrey Hirst general manager Tania Pauling
said wool carpet manufacturers had been struggling as a
result of the high dollar and the huge number of imported
synthetic carpets into New Zealand.