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Feltex carpets Australian sales decline $11.3mn

03 Sep '05

4 min read

Residential & commercial carpets seller Feltex released its audited results.

The Board of Directors confirmed the audited earnings before restructuring costs for the June 2005 year were $13 million and, after one-off restructuring costs, $11.8 million.

“This result reflects the adverse combination of factors that became clear to us in late March."

"They have and are implementing wide-ranging changes to the company. We are single-mindedly focused on rebuilding shareholder value in the business as quickly as possible,“ stated Feltex Chairman Tim Saunders.

Operating revenue declined by 8.8 percent to $300.2 million. New Zealand sales remained strong and were up 8.1 percent for the year while Australian sales declined by 7.6 percent. The strong New Zealand dollar adversely affected the translation of Australian sales into New Zealand dollars. Margins on Australian sales decreased because of price competition from imports, intense local competition and higher synthetic raw material costs.

These factors, and the 8.8 percent decline in operating revenue, lead to the 25.7 percent decline in EBITDA. The operating surplus was $13 million before the one-off costs for restructuring and redundancies including that for the departing chief executive and four other senior executives of $1.3 million after tax.

“The Board has made the decision to revert to six monthly and annual announcements of financial performance rather than quarterly as has been the case for the past year. “Any material matters will continue to be reported to the market as soon as the Board is aware of them,” said Feltex chairman Mr Saunders. “The merger discussions with Godfrey Hirst remain at the stage of seeking reciprocal information and agreeing to the terms on which it is to be shared,” said Mr Saunders.

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