Cavalier shares plunge after profit downgrade

Wayne Chung blamed trading conditions. Picture / Richard Robinson

Carpet-maker Cavalier Corp yesterday issued a profit downgrade that saw its shares sag to the tune of 5.26 per cent.

Cavalier, which issued the downgrade barely six weeks after one by rival carpet-marker Feltex, said it now expected a June year profit of $19.5 million.

This was down on last year's $21 million and its February forecast of $21 million to $22 million net profit after tax.

Investors punished the shares, pushing them down 20c to $3.60, although on slim turnover of $105,419. The firm's shares have lost $1.09 since December 31.

Managing director Wayne Chung said more difficult trading conditions - particularly at its wool scouring and procurement operations - were behind the downgrade.

"These operations, because of the seasonal nature of their businesses, would normally produce the bulk of their earnings in the second half of the financial year," he said.

However, Cavalier's carpet operations were performing as expected.

The downgrade follows one by Feltex, which said its full-year profit could be up to $9 million less than forecasts.

Its net profit after tax is now seen to be in the $15 million to $16 million band.

The Feltex downgrade brought about a tumble in the company's share price, which had floated at an opening price of $1.70. They closed unchanged yesterday at 69c.

- NZPA