Wool exit clips half-year result for Cavalier

One-off costs of $2 million associated with the closure of its Lichtenstein wool trading and scouring operations have slashed carpet-maker Cavalier Corporation's six-month profit.

The company yesterday reported a net profit of $4.64 million for the six months to December 31, down from $6.71 million for the previous corresponding period.

Despite the reduced profit, Cavalier's second interim dividend will be unchanged from last year - 10c a share, to be paid on March 16.

Contributions from ongoing business, principally carpet-making, were up 6 per cent on the previous year, with tax-paid earnings of $7.1 million.

Cavalier's directors said the current financial year was a transitional one for the company, and that it was necessary to look beyond reported earnings "especially in this first half where we bear the bulk of the restructuring costs associated with our exit from wool trading."

Although the market has slowed, the company said it expected its carpet operation to continue operating in the second half at levels equal or close to those of last year.

Group earnings for the full year would be down on the previous year due to the closure costs, Cavalier said.

But "earnings from ongoing businesses should be up, and that is the key measure."

By year-end, the company should have released a large amount of unproductive capital from the wool business. Cavalier shares closed down 5c at $4.75.