Feltex boasts 80 per cent rise in first quarter profit

10.00am

Carpet manufacturer Feltex today boasted a 79.8 per cent improvement in its first quarter profit which was $4.4 million - up from $2.5 million last year.

The company, which re-listed on the sharemarket in June after an absence of nearly 20 years, said it achieved the result in the three months to September on slightly lower revenue of $79.1 million -- down from $80.5 million last year.

However, the company's earnings before interest tax depreciation and amortisation (ebitda) increased to $10.0 million for the period, compared to $8.7 million last year.

Feltex said the improvement was down to improved margins resulting from its move to higher value products, margin contributions from new tufted carpet production equipment and cost control.

The company, which sells much of its product in Australia, said it had been affected by the stronger New Zealand dollar. While it increased sales in Australia, the higher cross rate saw reported revenue fall by $2.5 million.

But the higher kiwi also worked in the company's favour.

"As the major portion of the group's debt is denominated in Australian dollars, the stronger New Zealand dollar has had a positive translation effect on interest paid when expressed in New Zealand dollars for reporting purposes."

Feltex shares closed at $1.57 yesterday 7.6 per cent lower than their $1.70 issue price in June.

Feltex raised $243 million in a public offer in May -- the biggest float in this country since Contact Energy was listed five years ago.

Shares traded at an 8c discount at $1.62 on the first day of trading, and they have continued to drop.

- NZPA