FY19 Half Year Report

Half Year Report 2019

With operations going back 60 years, Cavalier
is well positioned to build a great flooring
business founded on our heritage and showcasing
New Zealand wool to the world.
Our focus is on manufacturing and marketing high quality, high end
flooring, particularly woollen products. We will continue to lead
in innovation, building on our established and proven expertise
to make some of the world’s best carpet.
We have made considerable changes to our business in the past
few years and now have a stronger platform to build on our
heritage. We stepped into FY19 with a clear purpose and a
determination that we can move our Company forward into
growth and delivering shareholder value.
We are pleased to deliver an improved result for HY19.
Alan Clarke
Chairman
21 February 2019
Paul Alston
Chief Executive Officer
On behalf of the Board and management of Cavalier Corporation (NZX: CAV),
we are pleased to present the FY19 Half Year Report, including the financial
statements, for the period to 31 December 2018:

Financial Summary 2
Financial Snapshot3
Half Year Review4
Our Focus7
HY19 Financial Review8
Financial Statements10
Notes to the Financial Statements17
Disclosure of Non-GAAP Financial
Information25
Corporate Directory28
Contents
Cavalier Corporation – Half Year Report 2019 – 1

Unaudited
Six months
ended
31 Dec 2018
$000
Unaudited
Six months
ended
31 Dec 2017
$000
Audited
Year ended
30 Jun 2018
$000
Revenue$69,996$75,316$148,120
EBITDA (normalised)
1
4,6244,4189,998
Depreciation(1,755)(1,806)(3,561)
EBIT (normalised)
1
2,8692,6126,437
Net interest expense(1,045)(1,504)(2,798)
Share of profit after tax of equity-accounted investees
(normalised)
1
6443811,419
Profit before tax (normalised)
1
2,4681,4895,058
Tax expense(537)(341)(1,084)
Profit after tax (normalised)
1
1,9311,1483,974
Abnormal net gains/(losses) after tax
1
(11,964)(140)107
Profit/(Loss) after tax (GAAP)$(10,033)$1,008$4,081
Net cash flow from operating activities$2,405$7,542$12,143
Basic and diluted earnings per share (cents) –
based on weighted average number of shares
outstanding of 68,679,098
Normalised
1
2.81.75.8
GAAP(14.6)1.55.8
Return on average shareholders’ equity (%)
Normalised
1
2.9%1.7%5.7%
GAAP(14.9)%1.5%5.7%
Unaudited
As at
31 Dec 2018
Unaudited
As at
31 Dec 2017
Audited
As at
30 Jun 2018
Net tangible asset backing per share ($)$0.81$0.89$0.94
Equity to total assets (%)58.0%53.1%54.3%
Net interest-bearing debt to equity ratio22:7833:6729:71
1
Normalised is a non-GAAP (Generally Accepted Accounting Practice) measure that provides what the Directors
believe to be a more meaningful view of the underlying financial performance of the Group. A reconciliation
between GAAP and normalised earnings together with further commentary on the disclosure of non-GAAP
financial information are set out at pages 25 to 27 of the Half Year Report.
FINANCIAL SUMMARY
For the six months ended 31 December 2018 (Unaudited)
2 – Cavalier Corporation – Half Year Report 2019

FINANCIAL SNAPSHOT
Revenue and sales
Revenue impacted by softer market
conditions, particularly of lower margin
synthetic carpet.
Sales of higher margin wool carpets have
grown year on year, as Cavalier increases its
focus on the high end of the market.
Operating expenses
Operating expenses decreased with further
gains being targeted following the 2017
restructure.
HY19 key events
Half year result at the top end of guidance
as Cavalier benefits from a more efficient
organisational structure and a strategic focus
on high quality, higher margin wool carpets.
The Company notes that market softness has
continued into the second half of the year,
particularly in Australia.
$13.3m from sale of Cavalier’s 27.5% in
its wool scouring business (Cavalier Wool
Holdings, CWH) and the associated property.
Entered into long-term scouring arrangement
with CWH.
Retirement of Director, Sarah Haydon,
at the 2018 Annual Meeting.
Embarked on inaugural shareholder roadshow
to six regional centres across New Zealand.
Post-period end: Exhibited at Domotex global
flooring show in Germany for the first time.
EBITDA up 5% on HY18 with higher
carpet earnings offset by reduced
earnings from the wool buying business.
EBITDA
5%
68% increase in normalised
NPAT* to $1.9m.
Normalised NPAT
*

68%
Gross margin improved
to 26% (HY18: 23%).
26%
$12.1m
Reduction in net debt
Net debt reduced to $17.3m
(down 41% during the period).
* Normalised NPAT is a non-GAAP measure and excludes the $12.0m non-cash write down on the
sale of the 27.5% in Cavalier Wool Holdings and associated property at the end of September 2018.
Cavalier Corporation
– Half Year Report 2019 – 3

HALF YEAR REVIEW
After the past few years of change, Cavalier
is now well positioned to continue growing and
taking advantage of opportunities in the high end,
high quality flooring market, particularly in woollen
carpets. We have a more efficient manufacturing
base, a new strategy, strong heritage brands in
Cavalier Bremworth and Norman Ellison, and an
experienced management team and Board.
Our manufacturing operations now span
Whanganui, Napier and Auckland and we have
sales offices in Auckland, Wellington, Christchurch,
Sydney, Melbourne, Brisbane, Adelaide and Perth.
We also own wool buying business Elco Direct,
which has a loyal customer base throughout the
North Island.
We are and will remain a proud and highly
successful manufacturer – but we will also
ensure that we make desirable carpets that
our customers want and which generate
strong and sustainable margins.
The fruits of our hard work are now starting
to be seen in our financial results, as we deliver
improving performance and increasing value
for our shareholders.
During HY19, we remained focused on business
fundamentals and our three strategic pillars –
Sales, Marketing and Product Development
and People.
Alan Clarke
Chairman
Paul Alston
Chief Executive Officer
Chairman &
Chief Executive Officer’s Review
4 – Cavalier Corporation – Half Year Report 2019

After the past few years of change, Cavalier
is now well positioned to continue growing
and taking advantage of opportunities in
the high end, high quality flooring market,
particularly in woollen carpets.
Sales
Sales remain a priority and we rolled out a new
sales strategy across Australia and New Zealand
and continued to work closely with our trade
customers. Anecdotally, we know they are finding
current conditions challenging, particularly in
Australia where softening consumer confidence
is affecting flooring sales, particularly in the low
margin, synthetic end of the market. Despite this,
demand for our high end wool carpets is up year
on year, with Cavalier reporting one of its highest
sales months yet for our high end felted carpets.
We noted at the end of FY18 that while our home
markets of New Zealand and Australia remain
of importance, we also saw opportunities in the
wider global market. The market research report
we commissioned last year identified significant
opportunities for our high end wool carpet in a
number of international markets, particularly the
UK and North America. While we are taking a very
measured approach to entry into these markets,
we are excited about their potential.
In January this year, Cavalier displayed at
Domotex Germany, the largest and most important
flooring trade show globally, for the first time.
Feedback on our new innovative products was
very encouraging, we increased our understanding
of the competitive market place and we acquired
some strong potential leads which we will be
investigating further. It was pleasing to see that
what we are doing in product development at
Cavalier is as good as, if not better than, global
leaders in the industry.
Marketing and Product Development
Our marketing and product development efforts
are centred around our new high margin strategic
focus – particularly wool. For the past two years we
have been challenging the product development
team to create new and exciting products with a
point of difference and we will be progressively
launching these into the market over the next 12
months. Investment in research and development
and creating ranges that command a premium is a
priority and critical for our success.
We continue to see increasing awareness of
the environmental benefits of wool – nature’s
miracle fibre – and this bodes well for Cavalier
in the long term as customers seek out natural
woollen products.
Cavalier Corporation – Half Year Report 2019 – 5

People
Cavalier was one of the first companies in
New Zealand to pay women equal rates to men,
and to allow women to work the night shift.
This focus on people continues today.
Strengthening and building our organisational
culture is a priority and we are putting processes
and resources in place to support this.
We are focused on attracting key talent and
growing and retaining talented people. Having
a great culture within our business is essential.
Outlook
We are seeing a global resurgence in demand for
high end woollen flooring, and are well placed to
take advantage of this with a renewed focus on
high quality, high margin woollen flooring
products, a more efficient manufacturing base
and a strong financial platform.
However, market conditions on both sides of the
Tasman are becoming increasingly difficult with
reduced consumer confidence and lower flooring
sales. Confidence in Australia is particularly low and
sales are softening. These conditions are expected
to continue and will make for a challenging FY19
second half.
In addition, Cavalier will no longer have investment
earnings from CWH which contributed $1.0m to
NPAT in the FY18 second half.
We will continue to strengthen our business
including investing in our core business operations,
particularly into a new IT system, customer
relationships, an expanding global presence,
innovative new product development, as well as
exploring investment opportunities to grow our
market presence.
We are building on the success of our Cavalier
Bremworth World of Difference positioning, and
have a number of exciting initiatives underway
to build our market share in our home markets
of Australia and New Zealand, as well as new
opportunities offshore.
While our second half will present some challenges,
our direction and our opportunity are clear. Full
year guidance for FY19 will be provided once
trading patterns and results are established.
We thank shareholders for your continued support.
Alan Clarke
Chairman
21 February 2019
Paul Alston
Chief Executive Officer
We are seeing a global resurgence
in demand for high end woollen
flooring, and are well placed to
take advantage of this.
6 – Cavalier Corporation – Half Year Report 2019

OUR FOCUS
Our focus is on being a
manufacturer and marketer of
high quality environmentally
responsible carpet solutions, with
a wool bias – all based on Cavalier’s
proven and differentiated position
as an innovator of high quality
flooring solutions.
Cavalier Corporation – Half Year Report 2019 – 7

HY19 Financial Review
Six months ended 31 December
Unaudited
2018
$000
2017
$000
Revenue$69,996$75,316
EBITDA (normalised)
1
4,6244,418
Depreciation(1,755)(1,806)
EBIT (normalised)
1
2,8692,612
Net interest expense(1,045)(1,504)
Share of equity-accounted investee after tax profit
(normalised)
1
644381
Profit before tax (normalised)
1
2,4681,489
Income tax(537)(341)
Profit after tax (normalised)
1
1,9311,148
Abnormal losses after tax(11,964)(140)
Profit/(Loss) after tax (GAAP)$(10,033)$1,008
Earnings per share (cents) (normalised)
1
2.81.7
Earnings per share (cents) (GAAP)(14.6)1.5
1
Normalised is a non-GAAP (Generally Accepted Accounting Practice) measure that provides what the Directors
believe to be a more meaningful view of the underlying financial performance of the Group. A reconciliation
between GAAP and normalised earnings together with further commentary on the disclosure of non-GAAP financial
information are set out at pages 25 to 27 of the Half Year Report.
Cavalier has reported a half year result at the top end of guidance as the Company benefits from
a more efficient organisational structure and a strategic focus on high quality, higher margin
wool carpets.
As previously signalled, revenue of $70.0m was down 7% on the prior year as softer market
conditions impacted on sales, particularly of lower margin synthetic carpets and as an increasing
emphasis was placed on marketing high end woollen carpets. Pleasingly, demand for Cavalier’s
high end wool carpets was up year on year, with the Company reporting one of its highest sales
months yet for its high end felted carpets, while lower margin synthetic sales decreased in line
with Cavalier’s new strategic focus.
In spite of lower revenue, EBITDA was up 5% on the prior comparative half year (HY18) to $4.6m.
The carpet business continues to benefit from lower wool prices which are being driven down
due to decreased Chinese demand for coarser carpet wool. Conversely however, and while a
much smaller part of Cavalier’s business, this has adversely impacted sales and margins for
Cavalier’s wool buying business.
8 – Cavalier Corporation – Half Year Report 2019

Including the non-cash write down of $12.0m on Cavalier’s carrying value of its 27.5% in Cavalier
Wool Holdings (CWH), following the sale at the end of September 2018, the Company reported
a net loss after tax of $10.0m.

Excluding the non-cash write down, Cavalier delivered a 68% increase in normalised net profit
after tax to $1.9m (HY18: $1.1m). This included a non-cash contribution from the investment in
CWH for three months prior to its sale. Lower interest expense as a consequence of significantly
reduced debt and improved earnings from the since-sold wool scouring operation make up the
majority of the improvement in normalised NPAT.
Operating expenses decreased with further gains being targeted following the 2017 restructure.
Increased investment is being made into direct and indirect marketing as the Company
promotes its high end offer in New Zealand, Australia and overseas markets, as well as into
people to support Cavalier’s growth strategy. Gross margin improved to 26% (HY18: 23%).
Financial Position
Cavalier’s financial position continues to improve, with equity to total assets of 58.0% and
leverage (being net debt to total capital employed) of 21.7% as at 31 December 2018
(30 June 2018: 54.3% and 28.9% respectively).
Total assets and net debt employed by the business were down largely as a result of the sale
of the Company’s interest in, and property held by, the wool scouring business.
Cash Flows
Cash inflow from operations of $2.4m for the period is down on the previous comparable
of $7.5m mainly as a result of the changes in working capital employed in the business –
in particular, new product introductions to support the refocus on Cavalier’s high end offer
and the flow on impact on inventory.
Cash inflow from investing activities was a significant $9.7m, with $11.8 million from the sale
of the wool scouring business, offset by a net $2.1m investment in plant and equipment to
support core businesses.
As a consequence, Cavalier was able to reduce net bank debt by $12.1m to $17.3m, enabling
it to build a stronger financial base from which to grow the core carpet business and insulate
it from external factors.
This reduced debt impacted positively on interest expense and normalised NPAT as a consequence.
Dividends
While no interim dividend has been declared, Cavalier remains committed to the resumption
of dividends as part of its long term financial strategy, subject to dividend payments being
sustainable and supported by consistent earnings and a strong balance sheet.

Cavalier Corporation – Half Year Report 2019 – 9

Condensed Consolidated Income Statement
Six months ended 31 December 2018 (Unaudited)
Notes
Unaudited
Six months
ended
31 Dec 2018
$000
Unaudited
Six months
ended
31 Dec 2017
$000
Revenue469,99675,316
Cost of sales(51,741)(57,914)
Gross profit18,25517,402
Other income and gains53576
Distribution expenses(12,028)(11,806)
Administration expenses(3,393)(3,060)
Results from operating activities
2,8692,612
Net finance costs
(1,045)(1,504)
Share of profit of equity-accounted investees (net of tax)8644241
Loss on sale of interest in, and property held by,
equity-accounted investees (net of tax)8(11,964)–
Profit/(Loss) before tax6(9,496)1,349
Tax expense(537)(341)
Profit/(Loss) after tax for the period$(10,033)$1,008
Profit/(Loss) after tax attributable to:
Shareholders of Cavalier Corporation Limited(10,033)1,008
Non-controlling interests––
Profit/(Loss) after tax for the period$(10,033)$1,008
Basic and diluted earnings per share (cents)(14.6)1.5
Weighted average number of shares outstanding during
the period (000s)68,67968,679
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
10
– Cavalier Corporation – Half Year Report 2019

Condensed Consolidated Statement of Comprehensive Income
Six months ended 31 December 2018 (Unaudited)
Note
Unaudited
Six months
ended
31 Dec 2018
$000
Unaudited
Six months
ended
31 Dec 2017
$000
Profit/(Loss) after tax for the period(10,033)1,008
Other comprehensive income that may be reclassified
subsequently to profit or loss
Effective portion of changes in fair value of cash flow hedges89445
Net change in fair value of cash flow hedges transferred to
profit or loss(376)65
Tax on other comprehensive income(145)(31)
Share of fair value of cash flow hedges of equity-accounted
investee (net of tax)872(24)
Foreign currency translation differences for foreign operations–116
445171
Other comprehensive income not reclassified subsequently
to profit or loss––
Other comprehensive income for the period, net of tax445171
Total comprehensive income for the period$(9,588)$1,179
Total comprehensive income attributable to:
Shareholders of Cavalier Corporation Limited(9,588)1,179
Non-controlling interests––
Total comprehensive income for the period$(9,588)$1,179
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
Cavalier Corporation
– Half Year Report 2019 – 11

Condensed Consolidated Statement of Changes in Equity
Six months ended 31 December 2018 (Unaudited)
Notes
Share
Capital
$000
Cash Flow
Hedging
Reserve
$000
Foreign
Currency
Translation
Reserve
$000
Retained
Earnings
$000
Total
Equity
$000
Total equity at beginning
of the period21,846(70)(1,420)51,86672,222
Change in accounting policy1–––(304)(304)
Total equity at beginning of the
period after adjusting for impact
of change in accounting policy
21,846(70)(1,420)51,56271,918
Total comprehensive income for
the period
Loss after tax–––(10,033)(10,033)
Other comprehensive income that
may be reclassified subsequently
to profit or loss
Changes in fair value of cash flow
hedges (net of tax)–373––373
Share of fair value of cash flow
hedges of equity-accounted
investee (net of tax)8–72––72
–445––445
Other comprehensive income not
reclassified subsequently to profit
or loss–––––
Total other comprehensive
income
–445––445
Total comprehensive income for
the period–445–(10,033)(9,588)
Total equity at end of the period$21,846$375$(1,420)$41,529$62,330
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
12
– Cavalier Corporation – Half Year Report 2019

Note
Share
Capital
$000
Cash Flow
Hedging
Reserve
$000
Foreign
Currency
Translation
Reserve
$000
Retained
Earnings
$000
Total
Equity
$000
Total equity at beginning
of the period21,846(322)(1,419)47,78567,890
Total comprehensive income for
the period
Profit after tax
–––1,0081,008
Other comprehensive income that
may be reclassified subsequently
to profit or loss
Changes in fair value of cash flow
hedges (net of tax)–79––79
Share of fair value of cash flow
hedges of equity-accounted
investee (net of tax)8–(24)––(24)
Foreign currency translation
differences for foreign operations––116–116
–55116–171
Other comprehensive income not
reclassified subsequently to profit
or loss–––––
Total other comprehensive
income–55116–171
Total comprehensive income for
the period–551161,0081,179
Total equity at end of the period$21,846$(267)$(1,303)$48,793$69,069
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
Cavalier Corporation
– Half Year Report 2019 – 13

Condensed Consolidated Statement of Financial Position
As at 31 December 2018 (Unaudited)
Note
Unaudited
31 Dec 2018
$000
Audited
30 Jun 2018
$000
ASSETS
Property, plant and equipment35,50235,142
Intangible assets2,3622,362
Investment in equity-accounted investees81,50024,544
Deferred tax asset4,3034,971
Total non-current assets43,66767,019
Cash and cash equivalents5992,111
Trade receivables, other receivables and prepayments11,40115,582
Inventories
50,49947,321
Derivative financial instruments
1,234971
Total current assets63,73365,985
Total assets$107,400$133,004
EQUITY
Share capital21,84621,846
Cash flow hedging reserve375(70)
Foreign currency translation reserve(1,420)(1,420)
Retained earnings41,52951,866
Total equity attributable to equity holders of the Company62,33072,222
LIABILITIES
Loans and borrowings17,90027,500
Employee benefits877911
Provisions7151,118
Total non-current liabilities19,49229,529
Loans and borrowings-4,000
Trade creditors and accruals18,93119,490
Provisions9312,214
Employee entitlements4,4714,076
Deferred income3447
Derivative financial instruments554593
Tax payable657833
Total current liabilities25,57831,253
Total liabilities45,07060,782
Total equity and liabilities$107,400$133,004
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
14
– Cavalier Corporation – Half Year Report 2019

Condensed Consolidated Statement of Cash Flows
Six months ended 31 December 2018 (Unaudited)
Notes
Unaudited
Six months
ended
31 Dec 2018
$000
Unaudited
Six months
ended
31 Dec 2017
$000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers71,22376,960
Cash paid to suppliers and employees(67,549)(69,136)
Dividends received21
Other receipts22
GST (paid)/refunded(25)850
Interest paid(1,176)(1,503)
Income tax (paid)/refunded(72)368
Net cash flow from operating activities2,4057,542
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment100148
Proceeds from sale of interest in, and property held by,
equity-accounted investees
810,553–
Dividends received from equity-accounted investee
81,243–
Acquisition of property, plant and equipment(2,184)(721)
Net cash flow from investing activities9,712(573)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in bank loans and borrowings(13,600)(7,400)
Net cash flow from financing activities(13,600)(7,400)
NET DECREASE IN CASH AND CASH EQUIVALENTS(1,483)(431)
Cash and cash equivalents at beginning of the period2,1111,255
Effect of exchange rate changes on cash(29)19
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD$599$843
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
Cavalier Corporation
– Half Year Report 2019 – 15

Condensed Consolidated Statement of Cash Flows (continued)
Six months ended 31 December 2018 (Unaudited)
Unaudited
Six months
ended
31 Dec 2018
$000
Unaudited
Six months
ended
31 Dec 2017
$000
RECONCILIATION OF PROFIT/(LOSS) WITH NET
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) after tax for the period(10,033)1,008
Add/(Deduct) non-cash and other items:
Depreciation1,7551,806
Share of profit of equity-accounted investees(644)(241)
Loss on sale of interest in, and property held by,
equity-accounted investees11,964–
Deferred tax asset52375
Employee benefits361112
Deferred income(13)13
Provisions(1,686)(618)
Net gain on sale of property, plant and equipment(31)(73)
Net (gain)/loss on foreign currency balance29(19)
Changes in working capital items:
Trade and other receivables and prepayments1,4542,039
Inventories(1,289)4,665
Tax receivable/payable(58)634
Trade creditors and accruals(143)(1,985)
Derivative financial instruments216126
Net cash flow from operating activities$2,405$7,542
This statement is to be read in conjunction with the Notes on pages 17 to 24 and the previous year’s annual
financial statements.
16
– Cavalier Corporation – Half Year Report 2019

Notes to the Financial Statements
For the six months ended 31 December 2018
1. GENERAL INFORMATION
Cavalier Corporation Limited (“Cavalier” or “the Company”) is a limited liability company
that is domiciled and incorporated in New Zealand.
The Company is registered under the Companies Act 1993 and is an FMC reporting entity
(by virtue of it being a listed issuer) for the purposes of the Financial Reporting Act 2013
and the Financial Markets Conduct Act 2013.
The interim financial statements contained in this half-yearly report have been prepared
in accordance with these Acts and are for Cavalier and its subsidiaries (“the Group”) and
the Group’s investment in equity-accounted investees as at, and for the six months ended,
31 December 2018.
The Company is listed on the New Zealand Exchange and is required to comply with the
provisions of the NZX Main Board Listing Rules which require it to present half-yearly reports
incorporating, among other things, the interim financial statements covering the Group.
The principal activities of the Group comprise carpet sales and manufacturing and
wool acquisition.
All Group subsidiaries are wholly-owned.
The Group had a 27.5% interest in commission woolscourer, Cavalier Wool Holdings Limited,
which it sold during the six months ended 31 December 2018 together with the property
held by 50%-owned asset-owning entity, CWS Assets Limited.
Basis of preparation
The interim financial statements are condensed financial statements that have been prepared
in accordance with NZ IAS 34 Interim Financial Reporting. The disclosures normally required
by other standards within New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) to be included in a complete set of annual financial statements are not
required to be incorporated into a condensed set of interim financial statements prepared
under NZ IAS 34. As a consequence, the interim financial statements do not comply with
NZ IFRS.
These interim financial statements are presented in New Zealand dollars ($), which is
the Company’s functional currency. Unless otherwise indicated, all financial information
presented in New Zealand dollars has been rounded to the nearest thousand.
The interim financial statements, and the comparative information for the six months
ended 31 December 2017, are unaudited. The comparative information as at 30 June 2018
is audited.
The interim financial statements were approved for issue by the Board of Directors of the
Company on 21 February 2019.
Critical accounting judgements, estimates and assumptions
In preparing the interim financial statements, the Group has consistently applied the
judgements, estimates and assumptions adopted in the preparation of the annual financial
statements for the year ended 30 June 2018.
Cavalier Corporation – Half Year Report 2019 – 17

Accounting policies
The interim financial statements should be read in conjunction with the annual financial
statements for the year ended 30 June 2018 and the accounting policies set out therein.
All accounting policies adopted in the preparation of the interim financial statements are
consistent with those adopted in the preparation of the annual financial statements, with
the exception that the Group adopted NZ IFRS 9 Financial Instruments (NZ IFRS 9) and
NZ IFRS 15 Revenue from Contracts with Customers (NZ IFRS 15) during the six months
ended 31 December 2018.
Impact of the adoption of NZ IFRS 9
Effective 1 July 2018, the Group applied NZ IFRS 9 for its accounting of financial
instruments, which included the adoption of the expected loss model, as opposed to
the incurred loss model under the old standard, for the assessment of trade and other
receivables for impairment. Under the new standard, the Group assesses impairment of
trade and other receivables on a forward-looking basis, taking into account not only past
events and current conditions, but also forecast of future economic conditions.
It has been determined that the impact of the new standard on the assessment of trade
and other receivables for impairment is not material.
The Group elected to apply the cumulative effect method, with no restatement of
comparative period amounts, in applying NZ IFRS 9. The cumulative effect of applying
the new standard is nil, with no adjustment to the opening balance of retained earnings
recognised in the Condensed Consolidated Statement of Changes in Equity for the six
months ended 31 December 2018 required as a consequence.
Impact of the adoption of NZ IFRS 15
Effective 1 July 2018, the Group also applied NZ IFRS 15 for its accounting of revenue from
contracts with customers. Based on the five-step assessment performed by the Group
pursuant to NZ IFRS 15, the impact of the new standard is not material. All of the revenue
earned by the Group is derived from the satisfaction of a single performance obligation
for each contract, which can be for the sale of carpet, carpet yarn or wool. This revenue
has historically been recognised at the time there is the transfer of the risks and rewards of
ownership of the products sold to the customer. It has been determined that revenue is now
recognised when the customer obtains control of the products sold, typically on the earlier
of payment or delivery.
It has also been determined that there are:
• no material changes to the accounting for rebates, discounts or any other variable
consideration under NZ IFRS 15; and
• no financing components within the Group’s sales arrangements.
The new accounting policy on revenue is disclosed in Note 4.
The Group also elected to apply the cumulative effect method, with no restatement of
comparative period amounts, in applying NZ IFRS 15. The cumulative effect of applying
the new standard is dealt with as an adjustment to the opening balance of retained earnings
recognised in the Condensed Consolidated Statement of Changes in Equity for the six
months ended 31 December 2018.
Notes to the Financial Statements (continued)
For the six months ended 31 December 2018
18 – Cavalier Corporation – Half Year Report 2019

The Group’s revenue recognition policy remains largely the same with the exception that
revenue is now recognised when the customer obtains control of the products sold, typically
on the earlier of payment or delivery.
The adoption of NZ IFRS 15 has impacted the timing of when some revenue is recognised,
resulting in the following adjustments to opening retained earnings.
$000
Retained earnings as at 1 July 2018 before NZ IFRS 15 adjustments51,866
Change in revenue(2,371)
Change in cost of sales1,949
Change in tax expense118
Retained earnings as at 1 July 2018 after NZ IFRS 15 adjustments$51,562

The table below shows the effect of the adoption of NZ IFRS 15 on 1 July 2018 on the
Condensed Consolidated Statement of Financial Position:
As
previously
reported
$000
NZ IFRS 15
reclassifications
$000
Restated
$000
Assets
Trade receivables, other receivables and
prepayments15,582(2,727)12,855
Inventories47,3211,88949,210
Total impact on assets$62,903$(838)$62,065
Liabilities
Trade creditors and accruals19,490(416)19,074
Tax payable833(118)715
Total impact on liabilities$20,323$(534)$19,789
Retained earnings$51,866$(304)$51,562
Cavalier Corporation – Half Year Report 2019 – 19

2. GOING CONCERN
The Group prepares its financial
statements on a going concern basis
and expects to be able to realise its
assets and meet its financial obligations
in the normal course of business.
The Group’s ability to comply with
the Bank’s financial covenants and
generate sufficient cash flows from
operations to satisfy its funding and
other financial obligations for a period
of at least 12 months following balance
date is important to determining the
appropriateness of the going concern
basis of accounting.
In this regard, reliance is placed on
the forecasts of the Group’s financial
performance, cash flows and financial
position that are prepared by
management as part of its monitoring of
the Group’s operations and the Group’s
ability to comply with, among other
things, the Bank’s financial covenants
and debt repayment obligations over
the term of its Bank facility.
The Board of Directors (“Board”)
notes that these financial forecasts are
sensitive to changes in some of the
assumptions underlying the forecasts
– including sales volumes and margins,
manufacturing performances and a
number of external factors over which
the Group has limited control over, such
as exchange rates and raw material
input costs.
The Board also notes the progress
that is being made to strengthen the
Group’s financial position and reduce
bank loans and borrowings and believes
that the Group will be able to generate
the earnings and cash flows to comply
with the Bank’s covenants and meet
its contractual obligations as these
become due.
Notes to the Financial Statements (continued)
For the six months ended 31 December 2018
3. SEGMENT PERFORMANCE
Unaudited
CarpetsWoolTotal
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
External revenue61,47965,9598,5179,35769,99675,316
Inter-segment revenue––1,7611,4821,7611,482
Total revenue$61,479$65,959$10,278$10,83971,75776,798
Elimination of inter-segment revenue(1,761)(1,482)
Consolidated revenue$69,996$75,316
Segment result before depreciation5,4594,789145815,4735,370
Depreciation(1,691)(1,750)(64)(56)(1,755)(1,806)
Segment result after depreciation3,7683,039(50)5253,7183,564
Elimination of inter-segment profits21(52)
Unallocated corporate costs(870)(900)
Results from operating activities2,8692,612
Net finance costs(1,045)(1,504)
Share of profit of equity-accounted
investees (net of tax)644241
Loss on sale of interest in, and property
held by, equity-accounted investees
(net of tax)(11,964)–
Profit/(Loss) before tax(9,496)1,349
Tax expense(537)(341)
Profit after tax for the period$(10,033)$1,008
Employee numbers
Operations
4384373026468463
Unallocated55
Total473468
Capital expenditure1,812528372193$2,184$721
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Reportable segment assets101,207104,6654,6933,795105,900108,460
Investment in equity-accounted investees1,50024,544
Total assets$107,400$133,004
Reportable segment liabilities24,19826,1222,9723,16027,17029,282
Unallocated liabilities17,90031,500
Total liabilities$45,070$60,782
20 – Cavalier Corporation – Half Year Report 2019

3. SEGMENT PERFORMANCE
Unaudited
CarpetsWoolTotal
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
Six months
ended 31 Dec
2018
$000
Six months
ended 31 Dec
2017
$000
External revenue61,47965,9598,5179,35769,99675,316
Inter-segment revenue––1,7611,4821,7611,482
Total revenue$61,479$65,959$10,278$10,83971,75776,798
Elimination of inter-segment revenue(1,761)(1,482)
Consolidated revenue$69,996$75,316
Segment result before depreciation5,4594,789145815,4735,370
Depreciation(1,691)(1,750)(64)(56)(1,755)(1,806)
Segment result after depreciation3,7683,039(50)5253,7183,564
Elimination of inter-segment profits21(52)
Unallocated corporate costs(870)(900)
Results from operating activities2,8692,612
Net finance costs(1,045)(1,504)
Share of profit of equity-accounted
investees (net of tax)644241
Loss on sale of interest in, and property
held by, equity-accounted investees
(net of tax)(11,964)–
Profit/(Loss) before tax(9,496)1,349
Tax expense(537)(341)
Profit after tax for the period$(10,033)$1,008
Employee numbers
Operations
4384373026468463
Unallocated55
Total473468
Capital expenditure1,812528372193$2,184$721
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Unaudited As at
31 Dec 2018
$000
Audited As at
30 Jun 2018
$000
Reportable segment assets101,207104,6654,6933,795105,900108,460
Investment in equity-accounted investees1,50024,544
Total assets$107,400$133,004
Reportable segment liabilities24,19826,1222,9723,16027,17029,282
Unallocated liabilities17,90031,500
Total liabilities$45,070$60,782
Cavalier Corporation – Half Year Report 2019 – 21

Notes to the Financial Statements (continued)
For the six months ended 31 December 2018
3. SEGMENT PERFORMANCE
(continued)
The Group’s reportable segments are:
• carpets, which comprises the sales and manufacturing of carpets; and
• wool, which covers the acquisition and sale of wool.
Inter-segment transactions
All inter-segmental sales are at market prices. Inter-segmental sales during the period and
intercompany profits on stocks at balance date are eliminated on consolidation.
Information about geographical areas
In presenting information on the basis of geographical areas, revenue is based on the
geographical location of customers and non-current assets are based on the geographical
location of those assets.
Six months
ended
31 Dec 2018
$000
Six months
ended
31 Dec 2017
$000
Revenue
New Zealand38,85141,399
Australia28,14530,442
Rest of the world3,0003,475
$69,996$75,316
As at
31 Dec 2018
$000
As at
30 Jun 2018
$000
Non-current assets
New Zealand43,08966,522
Australia578497
$43,667$67,019
Information about major customers
None of the Group’s customers are major customers as defined in NZ IFRS 8 Operating
Segments. Major customers are those external customers where revenues from transactions
with the Group are equal to, or exceed, 10% of the Group’s total revenues.
22 – Cavalier Corporation – Half Year Report 2019

4. REVENUE
Six months
ended
31 Dec 2018
$000
Six months
ended
31 Dec 2017
$000
Sales of goods69,99675,251
Provision of installation services–65
Total revenue$69,996$75,316
Accounting policy
Revenue is recognised when or as performance obligations are satisfied by transferring
control of the products sold to the customer at the transaction price specified in the
contract. Control typically transfers to the customer on the earlier of payment for, or delivery
of, the product. The transaction price includes all amounts which the Group expects to be
entitled to, net of goods and services tax and other indirect taxes, expected rebates and
discounts. Where applicable, rebates and/or discounts are included within the consideration
using an estimation typically based on the most likely method and are only recognised to the
extent that it is highly probable that a significant reversal will not occur.
5. OTHER INCOME AND GAINS
Six months
ended
31 Dec 2018
$000
Six months
ended
31 Dec 2017
$000
Rentals received22
Dividends received21
Net gain on sale of property, plant and equipment3173
Total other income and gains$35$76
6. EXPENSES
Profit/(Loss) before tax includes the following:
Six months
ended
31 Dec 2018
$000
Six months
ended
31 Dec 2017
$000
Depreciation$1,755$1,806
Operating lease and rental costs$1,373$1,792
7. CAPITAL EXPENDITURE COMMITMENTS
As at
31 Dec 2018
$000
As at
30 Jun 2018
$000
Capital expenditure commitments
$435$397
Cavalier Corporation – Half Year Report 2019 – 23

Notes to the Financial Statements (continued)
For the six months ended 31 December 2018
8. EQUITY-ACCOUNTED INVESTEES
The details relating to the Group’s interest in equity-accounted investees (being Cavalier
Wool Holdings Limited (CWH) and CWS Assets Limited (CWSA)) are set out below:
Six months
ended
31 Dec 2018
$000
Six months
ended
31 Dec 2017
$000
Carrying value as at 1 July24,54423,490
Share of profit after tax644241
Share of changes in fair value of cash flow hedges
(net of tax)72(24)
Dividends received(1,243)–
Proceeds of sale of interest in CWH and property
in CWSA
(10,553)–
Loss on sale of interest in CWH and property in CWSA(11,964)–
Carrying value as at 31 December$1,500$23,707
The Group sold its interest in 27.5%-owned CWH and the property held by 50%-owned CWSA
during the period.
9. CONTINGENT LIABILITIES
As at
31 Dec 2018
$000
As at
30 Jun 2018
$000
Bank guarantees in respect of operating leases and
other commitments
$2,246$2,095
10. RELATED PARTY TRANSACTIONS
During the period, the Group did not enter into any material contracts involving related
parties or directors’ interests. No amounts owed by related parties have been written
off or forgiven during the period. Apart from directors’ fees, key executive remuneration
and procurement of wool scouring services from CWH, there have been no related party
transactions.
24 – Cavalier Corporation – Half Year Report 2019

The half year report for the six months ended 31 December 2018 contains financial information
that is non-GAAP (Generally Accepted Accounting Practice) and therefore falls within the
Financial Markets Authority’s guidance note on “Disclosing non-GAAP financial information”
issued in July 2017.
Non-GAAP financial information has been prepared using the unaudited GAAP-compliant half
year and audited GAAP-compliant full year financial statements of the Group and has not been
independently reviewed.
Non-GAAP financial information contained within the half year report (more particularly,
the non-GAAP measures of financial performance such as “EBITDA (normalised)”, “EBIT
(normalised)”, “Profit before tax (normalised)” and “Profit after tax (normalised)” provide useful
information to investors regarding the performance of the Group because the calculations
exclude restructuring costs and other gains/losses (for example, gain/loss on sale of property
and investments) that are not expected to occur on a regular basis either by virtue of quantum
or nature.
In arriving at this view, the Directors have also taken cognisance of the regular requests by users
of the Group financial statements, including analysts and shareholders, regarding the nature and
quantum of significant items within the GAAP-compliant results and the way analysts distinguish
between GAAP and non-GAAP measures of profit.
The disclosure of the non-GAAP financial information is also consistent with how the financial
information for the Group is reported internally, and reviewed by the Chief Executive Officer
as its chief operating decision maker, and provides what the Directors and management
believe gives a more meaningful insight into the underlying financial performance of the
Group and a better understanding of how the Group is tracking after taking into account
these significant items.
Non-GAAP financial information does not have standardised meaning prescribed by GAAP and
therefore may not be comparable to similar financial information prescribed by other entities.
In putting together the half year report, the Directors have taken into account all of the
requirements within the guidance note. More specifically, these include:
• outlining why non-GAAP financial information is useful to investors and how it is used
internally by management;
• identifying the source of non-GAAP financial information;
• ensuring that:
– non-GAAP financial information is not presented with undue and greater prominence,
emphasis or authority than the most directly comparable GAAP financial information;
– presentation of non-GAAP financial information does not in any way confuse or obscure
presentation of GAAP financial information;
– a reconciliation from the non-GAAP financial information to the most directly comparable
GAAP financial information, including that for the previous period, can be easily accessed
(see below);
– a consistent approach is adopted from period to period with respect to the presentation of
non-GAAP financial information, including that for comparative periods;
– where there is any change in approach from the previous period, the nature of the change is
explained and the reasons and financial impact provided;
– non-GAAP financial information is unbiased; and
• taking care when describing, or referring to, items as ‘one-off’ or ‘non-recurring’.
Disclosure of Non-GAAP Financial Information
For the six months ended 31 December 2018
Cavalier Corporation – Half Year Report 2019 – 25

Disclosure of Non-GAAP Financial Information (continued)
For the six months ended 31 December 2018
Reconciliation of GAAP-compliant to non GAAP-compliant measures of profit/(loss) after tax
Six months ended 31 Dec 2018
GAAP
$000
Adjustments
$000
Normalised
$000
Revenue$69,996–$69,996
EBITDA4,624–4,624
Depreciation(1,755)–(1,755)
EBIT2,869–2,869
Net interest expense(1,045)–(1,045)
Share of profit of equity-accounted investees (net of tax)644–644
Loss on sale of interest in, and property held by,
equity-accounted investees (net of tax)
(11,964)11,964–
Profit/(Loss) before tax(9,496)11,9642,468
Tax expense(537)–(537)
Profit/(Loss) after tax($10,033)11,9641,931
Abnormal net loss after tax
(11,964)(11,964)
Loss after tax (GAAP)–$(10,033)
Analysis of adjustments
Profit/(Loss)
before tax
$000
Ta x
effect
$000
Profit/(Loss)
after tax
$000
Loss on sale of interest in, and property held by,
equity-accounted investees(11,964)–(11,964)
$(11,964)–$(11,964)
26 – Cavalier Corporation – Half Year Report 2019

Reconciliation of GAAP-compliant to non GAAP-compliant measures of profit/(loss) after tax
(continued)
Six months ended 31 Dec 2017
GAAP
$000
Adjustments
$000
Normalised
$000
Revenue$75,316–$75,316
EBITDA4,418–4,418
Depreciation(1,806)–(1,806)
EBIT2,612–2,612
Net interest expense(1,504)–(1,504)
Share of profit of equity-accounted investees (net of tax)241140381
Profit before tax1,3491401,489
Tax expense(341)–(341)
Profit after tax$1,0081401,148
Abnormal net loss after tax(140)(140)
Profit after tax (GAAP)–$1,008
Analysis of adjustments
Profit/(Loss)
before tax
$000
Ta x
effect
$000
Profit/(Loss)
after tax
$000
Scour merger costs(140)–(140)
$(140)–$(140)
Cavalier Corporation – Half Year Report 2019 – 27

CORPORATE DIRECTORY
Board of Directors:
George Adams DipFSA(Hons), FCA, Chairman of Audit Committee
CMInstD Member of Remuneration and Nomination
Independent Committees
Grant Biel B.E. (Mech.) Member of Audit, Remuneration and Nomination
Non-independent Committees
Alan Clarke B.Sc.(Hons), MBA, CFInstD Chairman of the Board of Directors
Independent Chairman of Nomination Committee
Member of Audit and Remuneration Committees
John Rae B.Com., LLB, CMInstD Deputy Chairman of the Board of Directors
Independent Chairman of Remuneration Committee
Member of Audit and Nomination Committees
Dianne Williams B.Com., MBA, CMInstD Member of Audit, Remuneration and Nomination
Independent Committees
Founding Shareholder:
The late Anthony Charles Timpson ONZM
Registered Office:
7 Grayson Avenue, Auckland 2104, P O Box 97040, Auckland 2241.
Telephone: 64-9-277 6000, Facsimile: 64-9-279 4756
Share Registrar:
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road, Auckland 0622, Private Bag 92119, Auckland 1142.
Telephone: 64-9-488 8700, Facsimile: 64-9-488 8787, Investor Enquiries: 64-9-488 8777
Auditors:
KPMG
Legal Advisors:
Russell McVeagh
Bankers:
Bank of New Zealand National Australia Bank Limited
Websites:
Corporate www.cavcorp.co.nz
Carpet Operation www.cavbrem.co.nz, www.cavbrem.com.au,
www.normanellison.co.nz, www.normanellison.com.au
Wool Operation www.elcodirect.co.nz
Share Registrar www.computershare.co.nz/investorcentre
28 – Cavalier Corporation – Half Year Report 2019