CAV - Cavalier Corp (Carpets)

[Jay]

Unlucky I picked this in the comp, thinking they would bounce back this year, in real life bought HLG and DIL - so cannot complain there!

[percy]

Today's preliminary announcement makes for sober reading.

[Lizard]

I actually think we might be close to a good time to buy at last... although I am still slightly reserved on that and would definitely watch the chart. While I think the chance of capital raising has not completely disappeared, if they have made it this far, I think they will see it through without.

Good to see reduction in inventories, but I'm not certain that they have room to go much below $50m before cuts in stock start to impact sales - especially as they roll out new synthetic product lines. Also not sure that they will be able to prune much more out of receivables. It is always possible the flow-on from Mainzeal could create a few slow payments on the commercial side - no real insights on that, but it is always hard to know where the fall-out stops. However, from my reading of debt-facilities and liquidity risk, I am guessing debt-repayment requirements second half will not be as high. So provided they DO see some pick up in sales second half (and it seems possible), then I think capital-raising will be avoided.

Overall, I would put it on the watch-list for a possible buy. Ideally, I would like to see it re-visit old lows and bounce again to make it worth the risk.

[777]

Very slow progress in their climb back to profitability. Price picked up in anticipation of better news ( and a small div)no doubt but will be interesting how far down it will go.

[Brain]

Surely Cavalier should be benefitting from the chch rebuild. Is it time to be positive about this share?

[Flugenbear]

Surely Cavalier should be benefitting from the chch rebuild. Is it time to be positive about this share?

Certainly demand for their products should be on the increase now and the next 2-3 years. If this doesn't lead to increased profitability I'll be scratching my head as to why...I certainly don't see too much downside IMHO.

[_Michael]

Cavalier is good exposure to NZ building uptick

They got hurt with high wool prices and dollar last two years but these problems subsiding

New problems for them are soft Aus building starts and floor retailer consolidation / direct importing

Plus nz has been big buyer of wool carpet but slowly accepting synthetic

Disclosure: despite all thAt I hold as value stock and expectation of nz building boom

[janner]

Cavalier is good exposure to NZ building uptick

They got hurt with high wool prices and dollar last two years but these problems subsiding

New problems for them are soft Aus building starts and floor retailer consolidation / direct importing

Plus nz has been big buyer of wool carpet but slowly accepting synthetic

Disclosure: despite all thAt I hold as value stock and expectation of nz building boom

Michael... Value stocks do not rely on expectations..

[Brain]

Probably about 9 to 10 cents per share after tax normalised earnings. Positive remarks for the future. I guess it depends on the Australian economy. Any thoughts Ladies and Gentlemen?

[Lizard]

I am cautiously optimistic in regard to their business prospects.

However, I wish the market would price a little more risk in to make the investment odds stack up...

Positive cashflow in the first 6 months came from significant reductions in inventories and receivables and was used to reduce debt to a more comfortable level. It seems to me that cashflow will likely have remained very tight during the second half and may continue to provide constraints around growing the business. So although they have done well to get this far without a capital raising, it would still seem possible. (Wonder if they could tap the NZDX for cash?).

I keep watching CAV, but hard to get excited unless offered an entry in the $1.10 - $1.30 region.