CAV - Cavalier Corp (Carpets)

[macduffy]

They should be getting a 'please explain' letter from the NZX very soon....

......... and they'll probably just reply that the stock had been oversold. Which is probably fairly near the mark?

[zigzag]

......... and they'll probably just reply that the stock had been oversold. Which is probably fairly near the mark?

Agree with that macduffy. I've been buying, and I sure don't know anything that's not already out there.

[macduffy]

Up another 11% today. You must be still buying, zigzag!

[Chaowee88]

Up another 11% today. You must be still buying, zigzag!

50% gain for the person who brought in the 40s

[winner69]

No cheap carpets for consumers, at least not just yet

Deflation, or cheaper carpets, not always good for likes of CAV ......constant or lower margins on lower revenues while costs keep going up means less profit, especially as Godfrey Hirst continue to win.

http://www.stuff.co.nz/business/indu...r-carpetbuyers

[PSE]

I agree with the most recent comments on here, I think this company is a bargain at recent prices.
When I run the recent figures through the Altman Z score the company is in the grey area due to the depressed share price, certainly not a sick balance sheet though it would be nice if it was stronger.
Went to the AGM in November with Mr Grinch and was impressed by the management, in my view the company is struggling because of stupid free trade agreements hollowing out the NZ economy.
The 'poisoned chalice' comment from the Chairman was silly but should be seen in the context of the stress he is under. In his defence he also said he was embarrassed to provide the latest downgrade, I was sitting next to two employees who rated him highly and the company has described the factors impacting profitability.
The are the high NZ/AU dollar (50% of carpets are exported there), the high wool price, the low wool grease price (due to shrimp farm illness) and the finally the high NZ/US dollar favouring cheap imports. If the news gets less worse on any of these fronts the company will return to a level of profitability, if not as high as previously because of the shift to synthetic still enough to make the company seem very cheap at 55c or so.

[PSE]

Seems like Mr Market will sell the punters 92 million dollars of assets on the balance sheet for only 32 million dollars today (47c per share). Not only assuming that the company has no future but is also worth less than it's scrap value.
This makes no sense to me and is even more rediculous as we are looking at a small profit being reported next week.
Maybe I have to buy some more, its daylight robbery at these prices.

[KiwiGekko]

As I am talking to myself this must be a great investment

We're listening - just waiting for CAV to finally turn itself around and start performing again. I don't fancy getting cut catching this falling knife.

[winner69]

PSE I am listening but didn't really want to interrupt your enthusiastic party.

However ongoing morbid fascination with impending train wrecks made me look at the report at more closely except looking at the profit / cash flow figure which did no more than top up the petty cash tin.

All I hear from CAV is we are getting better
.
However over the last six months there is not much to say things are even close to getting better. Besides having a price rise (not always a good thing in a competitive) all key metrics are worse than before. Look at -

Gross Margin % sales ........DOWN / WORSE
Operational Expenses ........about the same even though they talk about productivity and efficiency gains
Inventory - HIGHER .....good god they have mountains of stock
Debt HIGHER even they acknowledge it is too high but when not generating cash how do you reduce?
Cash Flow - NON EXISTENT. Wow
Employees - HIGHER / MORE PEOPLE

And not shown in the report but talking to industry insiders market share is DOWN. Yes still losing share, Godfrey Hirst killing them esp in commercial sector in Australia.

Not much improving is there .....all those words are just that. I get the feeling they havent really got a plan, just desperately hoping for the best.

So mate that's my view. But don't let me temper your enthusiasm because you might be a winner at these prices and be celebrating big time when share price gets back to 2 bucks again.

Long time to FY announcement but don't be surprised if we hear from them again in June

[winner69]

FY15 Guidance remains at $1m to $4m. Not changing guidance is a miracle in itself and almost unprecedented.

Always got to faith so $4m is it ...they have the 'appropriate strategies in place' to achieve this.

FY15 is $4m so that means second half will be $4m as well

That's nearly double what they made in H2 last year - go you good things, you can do it.