Directors Report Aug 2017

Directors’ Report Preliminary announcement of results for year ended 30 June 2017 YEAR OF SIGNIFICANT TRANSITION FOR CAVALIER - RESTRUCTURING AND STABILISING PRODUCTION


Cavalier has released its financial statements for the year ended 30 June 2017, reporting a net loss after tax of $2.1 million.

The normalised net loss after tax of $1.9 million is consistent with the guidance given to the market on 1st June 2017. This is a non-GAAP measure which excludes one-off items.

This result reflects the significant manufacturing restructuring undertaken in the last twelve months, with rationalisation and plant consolidation between Christchurch, Wanganui and Napier. This extensive programme of investment and change saw major operational and production challenges that adversely affected sales and expenditure in the period.

Notwithstanding that, good progress was made in bedding down a number of critical work programmes relating to the restructuring and, as production and efficiency improves, there are good indications that the benefit will be seen and realised going forward.

The result is that Cavalier has now consolidated woollen spinning into Napier, with considerable efficiency gains possible, and relocated felted yarn manufacture to Wanganui, allowing for growth.