Cavalier's carpet spread covers decline in wool division

Cavalier Corporation has boosted carpet revenues to make up for sliding wool contributions in the first six months.

Revenues for the period totalled $113.1 million, slightly down from last year's $113.7 million. But carpet revenues increased by 22 per cent to $51.6 million and wool revenues decreased 14 per cent to $61.5 million.

Tax-paid earnings increased 29 per cent to $6.71 million across the two divisions.

Pre-tax earnings in the carpet division gained 40 per cent to $11 million and improved as a per cent of revenues from 18.5 per cent last year to 21.3 per cent through higher volume and cost savings.

The contracting wool trade and intense competition "between exporters faced with reluctant and cautious buyers" was blamed by the company for a 33 per cent decline in pre-tax wool operations earnings to $1.4 million.

Managing director Alan James said wool prices were no longer in decline but demand had remained subdued throughout 1999.

He said in carpet, good volume growth in Asia as well as buoyant trading conditions on both sides of the Tasman had helped the company achieve the profit boost.

Cavalier is estimating full year earnings after tax of up to $13 million.

A second interim dividend of 10c per share has been declared, compared with 8c in the same period last year. Cavalier shares closed down 5c at 330c.