Difficult trading conditions in Australia and a strong New
Zealand dollar have affected carpet manufacturer Cavalier
Corporation's result for the year to June.
The company posted a ''disappointing'' 13% decrease in
normalised profit from $6.6 million to $5.8 million, while
revenue was down 1% from $201.7 million to $200.6 million.
Despite the challenging operating conditions, the group
managed to record improved earnings for its carpet and felted
yarn operations, while achieving a profit in line with the
previous year for its wool acquisition business, managing
director Colin McKenzie said in a statement.
Carpet revenue for 2014 was $164 million, down 3% on the
previous year's $169 million, with volume largely unchanged
and the reduction in revenue mainly due to the stronger New
Zealand dollar on Australian sales.
The New Zealand carpet-market had continued to improve on the
back of the strengthening New Zealand economy and carpet
sales were marginally up on the previous year.
However, the lower-priced segment of the New Zealand market
remained very competitive.
The group's share of tax-paid earnings of Cavalier Wool
Holdings for the current year was $2 million, a 59% drop on
the previous year's record of $5 million.
The drop was attributed mainly to the ''dramatic'' reduction
in wool grease price, which had fallen by almost 61% since
the beginning of 2013, and a reduction in the volume of wool
available for scouring.
Wool scouring in New Zealand continued to be adversely
affected by excess scouring capacity with sheep numbers
continuing to decline.
CWH remained committed to further rationalisation in the
Cavalier Corporation's 2015 budget was showing a ''modest
increase'' on earnings. No final dividend would be paid for
the 2014 financial year.