KEY POINTS:
Cavalier
Carpet exporter Cavalier Corporation delivered a surprisingly good result for the six months ended December 31, with an after-tax profit of $7.65 million that was 7 per cent up on the same period last year. Group operating revenue for the six months was $112 million, an increase of 13 per cent on the previous year.
Conditions were tougher in New Zealand than Australia where residential carpet sales held up relatively well.
Cavalier shares have suffered on the perception its product is closely aligned with housing - among the first sectors to suffer in a downturn.
However, Cavalier is a very well managed company which has traded its way through many recessions and will undoubtedly continue to do so.
Reject shop
Discount chain The Reject Shop has upgraded its annual profit guidance by up to 15 per cent. The company has described the second-half outlook as very strong despite the effect of higher interest rates on household budgets, and a sober outlook for retail.
Reject reported a profit of A$14.1 million ($16.2 million) for the six months ended December, up 38 per cent from the same period a year earlier, helped by 14 new store openings. Sales had risen 9.2 per cent, excluding the benefit of new store openings, and this strength was expected to be maintained for the rest of the financial year.
The company's confidence is well founded as previous cyclical downturns have shown the value proposition becomes more attractive when consumers have less to spend.
