Preliminary FY20 Half Year Result

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019


Results for announcement to the market
Name of issuer Cavalier Corporation Limited
Reporting Period 6 months to 31 December 2019
Previous Reporting Period 6 months to 31 December 2018
Currency
Amount (000s) Percentage change
Revenue from continuing
operations
$64,384 (8%)
Total Revenue $64,384 (8%)
Net loss from continuing
operations
$(1,154) (88%)
Total net loss $(1,154) (88%)
Interim/Final Dividend
Amount per Quoted Equity
Security
It is not proposed to pay dividends.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.70 $0.81
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to accompanying results announcement and the
FY20 H1 Report
Authority for this announcement
Name of person

authorised
to make this announcement
Victor Tan
Contact person for this
announcement
Paul Alston or Jackie Ellis
Contact phone number +64 21 918 033 (Paul Alston) or +64 27 246 2505 (Jackie Ellis)
Contact email address palston@cavbrem.co.nz or Jackie@ellisandco.co.nz
Date of release through MAP

21 February 2020

Unaudited financial statements accompany this announcement.

---

Company Announcement
21 February 2020


CAVALIER INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2019

• Results slightly above November 2019 guidance with revenue of $64.4m and a Net Loss
After Tax (NLAT) of $(1.2)m. The reported result includes adjustment for NZ IFRS 16 and
$0.8m of transformation costs incurred for the period to 31 December 2019.
• Excluding transformation costs, normalised EBITDA of $3.0m and normalised NLAT was
$(0.6)m.
• Trading conditions remain soft for carpet, impacting on sales. In addition, softer demand for
wool has also affected Elco Direct’s revenue although margin has improved.
• Development of Cavalier’s transformation strategy is being finalised as the company moves
to position itself as a wool-focused, design-led business and capture customer demand for
high quality sustainable products.

For the six months to 31 December
$millions 1H19 1H20

1H20
Actual
Prior to
IFRS 16
IFRS 16
adjustment Actual
Revenue 70.0 64.4

64.4
NLAT (10.0) (1.0) (0.2) (1.2)
Normalised EBITDA 4.6 2.0 1.0 3.0
Normalised NPAT/NLAT 1.9 (0.4) (0.2) (0.6)
Net Debt 17.3

17.7
Inventory 50.5

44.7

Equity to total assets 58.0%

53.2%
Leverage (net debt to total capital employed) 27.8%

32.9%
Operating cashflow 2.4

2.0

Cavalier Corporation Limited (NZX: CAV) has today released its unaudited interim results for the six
months to 31 December 2019.

The challenging trading conditions have continued and revenue was down 8% compared to the prior
comparative period. Both the New Zealand and Australian economies remained soft during the
period, with growth deceleration and business uncertainty in both countries.

Pressure continues to be seen in low margin synthetic carpets with increasing competition in a tight
market and Cavalier expects this trend to continue. Cavalier is positioning itself in the higher value
end of the woollen flooring market and, while a smaller part of the market, sales of Cavalier’s
premium Bremworth Collection wool carpets continue to grow.

Company Announcement
21 February 2020



Cavalier has reported a NLAT of $(1.2)m for the six month period (1H19: $(10.0)m)
1
. No interim
dividend has been declared.

Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) was $3.0m
including a $1.0m benefit from the adoption of NZ IFRS 16 for leases (1H19: $4.6m). Normalised
EBITDA excludes $0.8m of transformation costs incurred to 31 December 2019, which are associated
with the development of Cavalier’s new business model and strategy. Further transformation costs
are expected in 2H20 as the company moves to reposition itself as a wool-focused, design-led
organisation.

Normalised NLAT, excluding transformation costs, was $(0.6)m (1H19 normalised NPAT: $1.9m).

Prudent capital management remains a priority and debt has reduced by more than 70% since FY14,
from $58.8m down to $17.7m as at 31 December 2019. The continuing reduction of debt and
strengthening of the balance sheet remains a priority for the Board.

Inventories have also reduced by $22.1m since FY14, with $44.7m of raw materials and finished
goods on hand as at 31 December 2019. The reduction of stock levels, particularly of lower value
synthetic carpets, remains a focus for management and proceeds will be used to further reduce
debt.

Cavalier is currently developing a new strategy as it moves to become a wool-focused, design-led
business. In the interim, management remain focused on lifting the performance of the existing
business. In particular, initiatives are focused around building sales through in-store presence,
supply chain improvements, ongoing product development and innovation, and reducing the cost
base.

New Strategy

Cavalier is considered a world leader in the manufacture of quality wool carpet. The company is
planning to leverage this expertise and build on its heritage to capture the growing consumer
demand for more natural, sustainable and healthier products.

CEO of Cavalier, Paul Alston, said: “We are on the cusp of a societal change, with consumers
becoming increasingly aware of the negative impacts of plastics, micro-plastics and synthetic
products. As a leader in the manufacture and sale of beautiful, premium wool carpets, Cavalier is
well positioned to meet customer demand for natural, sustainable products.

“For years, manufacturers of synthetic carpets have been marketing their products by denigrating
wool carpets. We believe it is time to dispel the myths – wool is naturally resilient, hard wearing, fire

1
1H20 NLAT included transformation costs of $0.6m (1H19 NLAT included the non-cash write down of $12.0m on
Cavalier’s carrying value of its 27.5% in Cavalier Wool Holdings (CWH), following its sale at the end of September 2018.)

Company Announcement
21 February 2020


and stain resistant and easy to clean. Not only that, it is soft, warm, a great insulator and 100%
sustainable.

“We are working closely with New Zealand Merino and other advisers to finalise our strategy, which
will see Cavalier go back to its roots as a wool-focused, design-led business. We will be building on
the strength of our brand to cement and grow our position in the high value wool and natural fibre
sector and look forward to taking our place alongside other iconic New Zealand wool brands such as
Icebreaker and All Birds. Our opportunity lies not just in New Zealand, but in other markets around
the world.”

Cavalier anticipates finalising and launching its new strategy prior to the start of the FY21 financial
year (1 July 2020). The focus will be on five critical streams – Marketing & Sales, Operations,
Inventory, Adjacencies & Growth Opportunities and Funding.

Chair of Cavalier, Alan Clarke, commented: “The trends being seen in the flooring sector and the
results from Cavalier’s existing business, further reinforce the need for Cavalier to change and
develop a new strategy for the future. The transformation will see Cavalier positioned for growth in
today’s world, meeting the growing customer demand for natural, sustainable products. This change
will take patience, investment and time, however, the Board believes this repositioning of Cavalier
back to its heritage of beautifully designed woollen flooring is the optimal pathway for future
growth.”

Adoption of NZ IFRS 16 for leases

NZ IFRS 16 is the new accounting standard in relation to the treatment of leases. It is important to
note that the impact of NZ IFRS 16 is non-cash and is for financial reporting purposes only. NZ IFRS
16 classification has resulted in an increase of $1.0m in EBITDA and a reduction of $0.2m in profit
due to increased depreciation and interest expense.

ENDS

For further information please contact:
Paul Alston
Chief Executive Officer
palston@cavbrem.co.nz
+64 21 918 033
+64 9 277 1135
Jackie Ellis
Media and Investor Relations
Jackie@ellisandco.co.nz
+64 27 246 2505

---

CAVALIER CORPORATION LIMITED


HALF YEAR FINANCIAL STATEMENTS

for the six months ended 31 December 2019

CONTENTS



Financial Summary 1

Half Year Review 2

Condensed Consolidated Income Statement 4

Condensed Consolidated Statement of Comprehensive Income 5

Condensed Consolidated Statement of Changes in Equity 6

Condensed Consolidated Statement of Financial Position 8

Condensed Consolidated Statement of Cash Flows 9

Notes to the Financial Statements 11

Disclosure of Non-GAAP Financial Information 22

Corporate Directory 25

1

Cavalier Corporation Limited and subsidiary companies

Financial Summary - for the six months ended 31 December 2019 (Unaudited)


Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
Audited
Year
ended
30 June 2019
$000 $000 $000

Revenue $64,384 $69,996 $135,234

EBITDA (normalised)
1
2,951 4,624 7,076

Depreciation – owned assets (1,700) (1,755) (3,479)
Depreciation – right-of-use assets (945) - -

EBIT (normalised)
1
306 2,869 3,597

Net finance costs (1,055) (1,045) (1,790)

Share of profit after tax of equity-accounted investees - 644 644

(Loss)/Profit before tax (normalised)
1
(749) 2,468 2,451

Tax credit/(expense) 183 (537) (572)

(Loss)/Profit after tax (normalised)
1
(566) 1,931 1,879

Abnormal net losses after tax
1
(588) (11,964) (18,659)

Loss after tax (GAAP) $(1,154) $(10,033) $(16,780)

Net cash flow from operating activities $1,999 $2,405 $2,906

Basic and diluted earnings per share (cents) –
based on weighted average number of shares
outstanding of 68,679,098

Normalised
1
(0.8) 2.8 2.7
GAAP (1.7) (14.6) (24.4)

Return on average shareholders’ equity (%)
Normalised
1
(1.0)% 2.9% 3.0%
GAAP (2.1)% (14.9)% (26.4)%

Unaudited
As at
31 December
2019
Unaudited
As at
31 December
2018
Audited
As at
30 June 2019

Net tangible asset backing per share ($) $0.70 $0.81 $0.72


Equity to total assets (%) 53.2% 58.0% 55.4%


Net interest-bearing debt to equity ratio 25:75 22:78 24:76




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 22 to 24 of the half year report.

2

Cavalier Corporation Limited and subsidiary companies

Half Year Review

Summary

• Results slightly above November 2019 guidance with revenue of $64.4m and a Net Loss After Tax (NLAT) of
$(1.2)m. The reported result includes adjustment for NZ IFRS 16 and $0.8m of transformation costs incurred
for the period to 31 December 2019.
• Excluding transformation costs, normalised EBITDA of $3.0m and normalised NLAT was $(0.6)m.
• Trading conditions remain soft for carpet, impacting on sales. In addition, softer demand for wool has also
affected Elco Direct’s revenue although margin has improved.
• Development of Cavalier’s transformation strategy is being finalised as the company moves to position itself as
a wool-focused, design-led business and capture customer demand for high quality sustainable products.

Financial Performance

For the six months to 31 December
$millions 1H19 1H20

1H20

Actual
Prior to
IFRS 16
IFRS 16
adjustment Actual
Revenue 70.0 64.4

64.4
NLAT (10.0) (1.0) (0.2) (1.2)
Normalised EBITDA 4.6 2.0 1.0 3.0
Normalised NPAT/NLAT 1.9 (0.4) (0.2) (0.6)
Net Debt 17.3

17.7
Inventory 50.5

44.7

Equity to total assets 58.0%

53.2%
Leverage (net debt to total capital employed) 27.8%

32.9%
Operating cashflow 2.4

2.0

The challenging trading conditions have continued and revenue was down 8% compared to the prior comparative
period. Both the New Zealand and Australian economies remained soft during the period, with growth deceleration
and business uncertainty in both countries.

Pressure continues to be seen in low margin synthetic carpets with increasing competition in a tight market and
Cavalier expects this trend to continue. Cavalier is positioning itself in the higher value end of the woollen flooring
market and, while a smaller part of the market, sales of Cavalier’s premium Bremworth Collection wool carpets
continue to grow.

Cavalier has reported a NLAT of $(1.2)m for the six month period (1H19: $(10.0)m)
1
. No interim dividend has been
declared.

Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) was $3.0m including a $1.0m
benefit from the adoption of NZ IFRS 16 for leases (1H19: $4.6m). Normalised EBITDA excludes $0.8m of
transformation costs incurred to 31 December 2019, which are associated with the development of Cavalier’s new
business model and strategy. Further transformation costs are expected in 2H20 as the company moves to
reposition itself as a wool-focused, design-led organisation.

Normalised NLAT, excluding transformation costs, was $(0.6)m (1H19 normalised NPAT: $1.9m).

Prudent capital management remains a priority and debt has reduced by more than 70% since FY14, from $58.8m
down to $17.7m as at 31 December 2019. The continuing reduction of debt and strengthening of the balance sheet
remains a priority for the Board.

1
1H20 NLAT included transformation costs of $0.6m (1H19 NLAT included the non-cash write down of $12.0m on Cavalier’s carrying value
of its 27.5% in Cavalier Wool Holdings (CWH), following its sale at the end of September 2018.)

3

Cavalier Corporation Limited and subsidiary companies

Half Year Review (continued)

Inventories have also reduced by $22.1m since FY14, with $44.7m of raw materials and finished goods on hand as
at 31 December 2019. The reduction of stock levels, particularly of lower value synthetic carpets, remains a focus
for management and proceeds will be used to further reduce debt.

Cavalier is currently developing a new strategy as it moves to become a wool-focused, design-led business. In the
interim, management remain focused on lifting the performance of the existing business. In particular, initiatives are
focused around building sales through in-store presence, supply chain improvements, ongoing product
development and innovation, and reducing the cost base.

New Strategy

Cavalier is considered a world leader in the manufacture of quality wool carpet. The company is planning to
leverage this expertise and build on its heritage to capture the growing consumer demand for more natural,
sustainable and healthier products.

CEO of Cavalier, Paul Alston, said: “We are on the cusp of a societal change, with consumers becoming
increasingly aware of the negative impacts of plastics, micro-plastics and synthetic products. As a leader in the
manufacture and sale of beautiful, premium wool carpets, Cavalier is well positioned to meet customer demand for
natural, sustainable products.

“For years, manufacturers of synthetic carpets have been marketing their products by denigrating wool carpets. We
believe it is time to dispel the myths – wool is naturally resilient, hard wearing, fire and stain resistant and easy to
clean. Not only that, it is soft, warm, a great insulator and 100% sustainable.

“We are working closely with New Zealand Merino and other advisers to finalise our strategy, which will see
Cavalier go back to its roots as a wool-focused, design-led business. We will be building on the strength of our
brand to cement and grow our position in the high value wool and natural fibre sector and look forward to taking our
place alongside other iconic New Zealand wool brands such as Icebreaker and All Birds. Our opportunity lies not
just in New Zealand, but in other markets around the world.”

Cavalier anticipates finalising and launching its new strategy prior to the start of the FY21 financial year (1 July
2020). The focus will be on five critical streams – Marketing & Sales, Operations, Inventory, Adjacencies & Growth
Opportunities and Funding.

Chair of Cavalier, Alan Clarke, commented: “The trends being seen in the flooring sector and the results from
Cavalier’s existing business, further reinforce the need for Cavalier to change and develop a new strategy for the
future. The transformation will see Cavalier positioned for growth in today’s world, meeting the growing customer
demand for natural, sustainable products. This change will take patience, investment and time, however, the Board
believes this repositioning of Cavalier back to its heritage of beautifully designed woollen flooring is the optimal
pathway for future growth.”

Adoption of NZ IFRS 16 for leases

NZ IFRS 16 is the new accounting standard in relation to the treatment of leases. It is important to note that the
impact of NZ IFRS 16 is non-cash and is for financial reporting purposes only. NZ IFRS 16 classification has
resulted in an increase of $1.0m in EBITDA and a reduction of $0.2m in profit due to increased depreciation and
interest expense.

For and on behalf of the Board of Directors:


Alan Clarke George Adams
Chairman Director
21 February 2020

4

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Income Statement


Six months ended 31 December 2019 (Unaudited)

Note Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000


Revenue 5 64,384 69,996
Cost of sales (49,150) (51,741)

Gross profit 15,234 18,255

Other income and gains 6 5 35
Distribution expenses (10,965) (12,028)
Administration expenses (4,784) (3,393)

Result from operating activities (510) 2,869

Net finance costs 7 (1,055) (1,045)

Share of profit of equity-accounted investees (net of tax) 10 - 644
Loss on sale of interest in, and property held by, equity-
accounted investees (net of tax)

10

-

(11,964)

Loss before tax (1,565) (9,496)

Tax credit/(expense) 411 (537)

Loss after tax for the period $(1,154) $(10,033)

Basic and diluted earnings per share (cents) (1.7) (14.6)

Weighted average number of shares outstanding during
the period (000s)



68,679

68,679






















This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual
financial statements.

5

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Comprehensive Income


Six months ended 31 December 2019 (Unaudited)

Note Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000


Loss after tax for the period (1,154) (10,033)

Other comprehensive income that may be reclassified
subsequently to profit or loss

Effective portion of changes in fair value of cash flow hedges 355 894
Net change in fair value of cash flow hedges transferred to profit
or loss



(316)

(376)
Tax on other comprehensive income (11) (145)
Share of fair value of cash flow hedges of equity-accounted
investee (net of tax)

10

-

72
28 445

Other comprehensive income not reclassified subsequently
to profit or loss

-

-

Other comprehensive income for the period, net of tax 28 445

Total comprehensive income for the period $(1,126) $(9,588)






























This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual
financial statements.

6

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity


Six months ended 31 December 2019 (Unaudited) Note Share
Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Total Equity
$000 $000 $000 $000 $000


Total equity at 1 July 2019 21,846 (219) (1,420) 34,782 54,989

Change in accounting policy 2 - - - - -
Total equity at 1 July 2019 after adjusting for impact of change
in accounting policy



21,846

(219)

(1,420)

34,782

54,989

Total comprehensive income for the period

Loss after tax - - - (1,154) (1,154)

Other comprehensive income that may be reclassified
subsequently to profit or loss

Changes in fair value of cash flow hedges (net of tax) - 28 - - 28
Share of fair value of cash flow hedges of equity-accounted
investee (net of tax)



-

-

-

-

-

- 28 - - 28

Other comprehensive income not reclassified subsequently to
profit or loss



-

-

-

-

-

Total other comprehensive income - 28 - - 28

Total comprehensive income for the period - 28 - (1,154) (1,126)

Total equity at 31 December 2019 $21,846 $(191) $(1,420) $33,628 $53,863



This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual financial statements.

7

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity (continued)


Six months ended 31 December 2018 (Unaudited) Note Share
Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Total Equity
$000 $000 $000 $000 $000


Total equity at 1 July 2018 21,846 (70) (1,420) 51,866 72,222

Change in accounting policy - - - (304) (304)
Total equity at 1 July 2018 after adjusting for impact of change
in accounting policy



21,846

(70)

(1,420)

51,562

71,918

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)

10

-

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 31 December 2018 $21,846 $375 $(1,420) $41,529 $62,330



This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual financial statements.

8

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Financial Position


As at 31 December 2019 (Unaudited)
Note Unaudited
31 December
2019
Audited
30 June 2019
$000 $000

ASSETS

Property, plant and equipment - owned 30,344 30,164
Property, plant and equipment – right-of-use 2 7,415 -
Deferred tax asset 5,658 5,456

Total non-current assets 43,417 35,620

Cash and cash equivalents 304 2,724
Trade receivables, other receivables and prepayments 11,584 12,344
Inventories 8 44,685 47,678
Derivative financial instruments 480 653
Income tax receivable 705 315

Total current assets 57,758 63,714

Total assets $101,175 $99,334

EQUITY

Share capital 21,846 21,846
Cash flow hedging reserve (191) (219)
Foreign currency translation reserve (1,420) (1,420)
Retained earnings 33,628 34,782

Total equity attributable to equity holders of the Company 53,863 54,989

LIABILITIES

Loans and borrowings 18,050 20,500
Lease liabilities 6,285 -
Employee benefits 870 903
Provisions 715 715

Total non-current liabilities 25,920 22,118

Trade payables and accruals 14,882 17,014
Employee entitlements 3,885 3,856
Lease liabilities 1,362 -
Provisions 535 699
Derivative financial instruments 728 649
Deferred income - 9

Total current liabilities 21,392 22,227

Total liabilities 47,312 44,345

Total equity and liabilities $101,175 $99,334






This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual
financial statements.

9

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Cash Flows


Six months ended 31 December 2019 (Unaudited)

Note Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 64,984 71,223
Cash paid to suppliers and employees (61,614) (67,549)
Dividends received 1 2
Other receipts 2 2
GST (paid)/refunded (130) (25)
Interest paid – loans and borrowings (758) (1,176)
Interest paid – lease liabilities 2 (294) -
Income tax (paid)/refunded (192) (72)

Net cash flow from operating activities 1,999 2,405


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment 2 100
Proceeds from sale of interest in, and property held by,
equity-accounted investees

10

-

10,553
Dividends received from equity-accounted investee 10 - 1,243
Acquisition of property, plant and equipment (1,306) (2,184)

Net cash flow from investing activities (1,304) 9,712


CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayment of lease liabilities 2 (713) -
Repayment of loans and borrowings (2,450) (13,600)

Net cash flow from financing activities (3,163) (13,600)


NET DECREASE IN CASH AND CASH EQUIVALENTS (2,468) (1,483)

Cash and cash equivalents at beginning of the period 2,724 2,111

Effect of exchange rate changes on cash 48 (29)

CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD



$304

$599













This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual
financial statements.

10

Cavalier Corporation Limited and subsidiary companies

Condensed Consolidated Statement of Cash Flows (continued)


Reconciliation of profit/(loss) with net cash flow from operating activities

Six months ended 31 December 2019 (Unaudited)

Six months
ended
31 December
2019
Six months
ended
31 December
2018
$000 $000

Loss after tax for the period (1,154) (10,033)

Add/(Deduct) non-cash and other items:
Depreciation – owned assets 1,700 1,755
Depreciation – right-of-use assets 945 -
Share of profit of equity-accounted investees - (644)
Loss on sale of interest in, and property held by,
equity-accounted investees

-

11,964
Deferred tax asset (213) 523
Employee benefits (4) 361
Deferred income (9) (13)
Provisions (164) (1,686)
Net gain on sale of property, plant and equipment (2) (31)
Net (gain)/loss on foreign currency balance (48) 29

Changes in working capital items:
Trade and other receivables and prepayments 760 1,454
Inventories 2,419 (1,289)
Tax receivable/payable (390) (58)
Trade payables and accruals (2,132) (143)
Derivative financial instruments 291 216

Net cash flow from operating activities $1,999 $2,405























This statement is to be read in conjunction with the Notes on pages 11 to 21 and the previous year’s annual
financial statements.

11

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements
For the six months ended 31 December 2019

1. General information

Reporting entity

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”) as at, and for the six months ended, 31
December 2019.

The Company is listed on the New Zealand Exchange and is required to comply with the provisions of the
NZX 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 manufacturing and sales and wool acquisition and
sales.

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
2018, are unaudited. The comparative information as at 30 June 2019 is audited.

The interim financial statements were approved for issue by the Board of Directors of the Company on 20
February 2020.

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
2019.

12

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

Accounting policies

The interim financial statements should be read in conjunction with the annual financial statements for the
year ended 30 June 2019 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 16 Leases (NZ IFRS 16) during the six months ended 31 December 2019.

2. Leases

Impact of the adoption of NZ IFRS 16

Effective 1 July 2019, the Group applied NZ IFRS 16 for its accounting of leases, using the modified
retrospective approach. Under this approach, the cumulative effect of initially applying NZ IFRS 16, if any,
is recognised as an adjustment to equity at that date. Comparative figures for the period ended 31
December 2018 are not restated to reflect the application of NZ IFRS 16.

Prior to 1 July 2019, the Group treated its leases of property, plant and equipment as operating leases
pursuant to NZ IAS 17 Leases, with lease payments recognised through profit or loss on a straight-line
basis over the term of these leases.

Effective 1 July 2019, NZ IFRS 16 eliminates the lessee’s classification of leases as either finance leases
(on balance sheet) or operating leases (off balance sheet) and introduces a single lessee accounting
model. Applying the new model, a lessee is required to recognise a right-of-use (or leased) asset and a
corresponding lease liability (reflecting the present value of future lease payments) at the date at which the
leased asset is available for use unless the term of the lease is 12 months or less (a short-term lease) or
the underlying leased asset is of low value (low-value lease). Lease payments are then allocated between
the lease liability recognised and finance costs, with the amount of finance costs charged to profit or loss
over the lease term using the effective interest rate method on the outstanding lease liability for each
reporting period.

As a consequence, the way lease payments are recognised in profit or loss changes under NZ IFRS 16,
with the Group now recognising a depreciation charge for right-of-use assets and interest expense on lease
liabilities, whereas previously, the Group recognised an operating lease expense over the term of the
lease.

The application of NZ IFRS 16 does not impact the Group’s cash flow or its ability to comply with its debt
covenants because all changes effected by NZ IFRS 16 are not required to be taken into account for the
purpose of calculating financial covenants pursuant to the terms of the Group’s facility agreement with the
Bank.

The operating lease commitments set out in note 8d (Operating leases) to the financial statements as at,
and for the year ended, 30 June 2019, to the extent that they relate to leases of identifiable assets with a
lease term of 12 months or more or which were not low value, were brought onto the statement of financial
position on 1 July 2019.

Some property leases contain an extension option that can be exercised at the discretion of the Group.
Where an extension is reasonably certain of being exercised, that extension period and related costs are
recognised in the Statement of Financial Position as additional right-of-use (or leased) asset and additional
lease liability.

13

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

Leases (continued)

Impact of the adoption of NZ IFRS 16 (continued)

Certain practical expedients permitted by NZ IFRS 16 were adopted in applying NZ IFRS 16 for the first
time as follows:

• use of a single discount rate for portfolio of leases with reasonably similar characteristics;
• use of onerous contract assessment under NZ IAS 37 Provisions, Contingent Liabilities and Contingent
Assets immediately before the date of initial application instead of performing an impairment review
under NZ IAS 36 Impairment of Assets;
• accounting for operating leases with remaining lease terms of less than 12 months as at 1 July 2019 as
short-term leases;
• exclusion of initial direct costs for the measurement of right-of-use assets at the date of initial
application;
• use of hindsight in determining the lease term where the contract contains options to extend the lease;
and
• the election not to reassess whether a contract is, or contains, a lease at the date of initial application,
with reliance placed on NZ IAS 17 and NZ IFRIC 4 Determining whether an Arrangement contains a
Lease for contracts entered into before the transition date.

Summary of the impact on the Statement of Financial Position on the adoption of NZ IFRS 16:

Audited
30 June 2019
Unaudited
Adjustments
Unaudited
1 July 2019
$000 $000 $000
Assets
Non-current assets
Property, plant and equipment – right-of-use - 8,088 8,088
Total 8,088

Total adjustments – Assets 8,088

Equity
Retained earnings 34,782 - 34,782
Total -

Liabilities
Non-current liabilities
Lease liabilities - 6,767 6,767
Total 6,767

Current liabilities
Lease liabilities - 1,321 1,321
Total 1,321

Total adjustments – Equity and liabilities 8,088

14

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

Leases (continued)

Impact of the adoption of NZ IFRS 16 (continued)

Reconciliation between operating lease commitments in accordance with NZ IAS 17 as at 30 June
2019 and lease liabilities recognised on initial application of NZ IFRS 16 as at 1 July 2019:

Unaudited
000’s
Operating lease commitments as at 30 June 2019 as disclosed in note 8d (Operating
leases) to the annual financial statements (audited)

$5,510
Less short-term leases (less than 12 months) not recognized (266)
Less low-value leases not recognized (45)
Add adjustments for lease extensions reasonably certain to be exercised 5,642
Operating lease commitments recognised on initial application of NZ IFRS 16
as at 1 July 2019

$10,841

Lease liabilities as at 1 July 2019
Present value of lease commitments as at date of initial application of NZ IFRS 16 $8,088

Non-current 6,767
Current 1,321
Lease liabilities recognised as at 1 July 2019 $8,088


A weighted average discount rate of 7.5% was used to determine the present value of lease liabilities as at
1 July 2019.

The assessment of the discount rate requires significant judgement. However, the results are not sensitive
to changes in the discount rate, with a 50 percentage basis points increase or decrease to the discount rate
decreasing or increasing lease liabilities recognised on application of NZ IFRS 16 by approximately
$140,000/1.7%.

Right-of-use assets

The reconciliation of right-of-use assets recognised on initial application of NZ IFRS 16 as at 1 July 2019
with those as at 31 December 2019 by class is set out below:

Unaudited
Carrying value
1 July 2019
Additions Depreciation Carrying value
31 December 2019
$000 $000 $000 $000
Buildings 6,638 47 (617) 6,068
Other assets 1,450 225 (328) 1,347
Total $8,088 $272 $(945) $7,415

15

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

Leases (continued)

Impact of the adoption of NZ IFRS 16 (continued)

Summary of the impact of NZ IFRS 16 on the Income Statement for the period:

Unaudited
Prior to
adoption
Unaudited
Impact of
NZ IFRS 16
Unaudited
Reported
result
$000 $000 $000
Revenue 64,384 - 64,384
Cost of sales (49,234) 84 (49,150)

Gross profit 15,150 84 15,234

Other income and gains 5 - 5
Distribution expenses (10,980) 15 (10,965)
Administration expenses (4,747) (37) (4,784)

Result from operating activities (572) 62 (510)

Net finance costs (761) (294) (1,055)

Loss before tax (1,333) (232) (1,565)

Tax credit 346 65 411

Loss after tax $(987) $(167) $(1,154)

Basic and diluted earnings per share (cents) (1.44) (0.24) (1.68)

Analysis of the impact of NZ IFRS 16 on the Income Statement (Unaudited):

Lease payments
booked to lease
liabilities in the
Statement of
Financial
Position
Additional
depreciation
charge for right-
of-use assets
recognised in
profit or loss
Additional
finance costs
on lease
liabilities
recognised in
profit or loss
Impact on
Income
Statement for
six months
ended 31
December 2019
$000 $000 $000 $000
Cost of sales 519 (435) - 84
Distribution expenses 404 (389) - 15
Administration expenses 84 (121) - (37)
Net finance costs - - (294) (294)
$1,007 $(945) $(294) $(232)

Analysis of short-term and low-value leases not dealt with under NZ IFRS 16 (Unaudited):

Expense
recognised in
profit or loss
Lease
commitments as
at 31 December
2019
Lease
commitments
within one year
Lease
commitments
in excess of
one year
$000 $000 $000 $000
Short-term leases 266 - - -
Low-value leases 37 8 8 -
Total $303 $8 $8 -

16

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

Leases (continued)

Impact of the adoption of NZ IFRS 16 (continued)

Summary of the impact of NZ IFRS 16 on the presentation of the Statement of Cash Flows for the
period:

Prior to the adoption of NZ IFRS 16, the total cash outflow relating to operating leases were included in
cash paid to suppliers and employees within cash flows from operating activities.

Following the adoption of NZ IFRS 16, the cash outflow is dealt with as follows in the Statement of Cash
Flows:

Unaudited
Six months
ended 31
December
2019
000’s
Total cash outflow relating to operating leases
(previously included in cash paid to suppliers and employees within cash flows from
operating activities)


$1,310

Cash outflow:
• allocated to interest expense (now included in interest paid within cash flows from
operating activities)

294

• allocated to lease liabilities (treated as repayment of lease liabilities and now
included in repayment of lease liabilities within cash flows from financing activities)

713

• relating to short-term and low-value leases not included in the measurement of lease
liabilities (continues to be included in cash paid to suppliers and employees within
cash flows from operating activities)


303

Total cash outflow $1,310


Accounting policy

The Group’s leases predominantly relate to buildings, forklifts and motor vehicles. A right-of-use (or leased)
asset and a corresponding lease liability (reflecting the present value of remaining lease payments) are
recognised at the date on which the leased asset is available for use.

Right-of-use assets are depreciated over their expected lease terms on a straight-line basis.

Lease liabilities are measured at the present value of the remaining lease payments, discounted using a
discount rate derived from the Group’s incremental borrowing rate where the interest rate implicit in the
lease is not readily available. Lease liabilities are amortised using the effective interest rate method.

The Group has elected to not apply NZ IFRS 16 in relation to short-term and low-value leases. Short-term
leases are leases with a lease term of 12 months or less. Low-value leases are those for which the
underlying asset is of low value. Payments associated with short-term leases and low-value leases are
recognised as an expense in the Income Statement on a straight-line basis over the lease term.

The Group has also elected to not separate in respect of motor vehicle leases non-lease components from
lease components and instead account for each lease component and any associated non-lease
component as a single lease component.

17

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

3. 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.

For the six months to 31 December 2019, the Group made a loss after tax of $1,154,000. Carpet sales
revenue decreased by 8% on the previous comparable period, on carpet sales volume 8% lower, during
the period.

Despite the challenging trading conditions encountered during the six months ended 31 December 2019,
the Group was able to meet the banking covenants that were negotiated on 28 June 2019.

The Group further renegotiated its banking covenants on 20 December 2019 as part of the extension of its
funding facilities from 1 September 2020 to 1 April 2021.

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 particularly 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.

Should the Group not achieve its financial forecasts and meet its debt obligations, the Group may not be
able to continue as a going concern and realise the value in its assets and discharge its liabilities in the
normal course of business.

The Board notes the plans that are in place 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.

The Board has also put in place several initiatives to improve business performance. These include:

(i) plans to grow carpet sales by focusing on in-store presence, supply chain improvements and on-
going product development and range refreshment;
(ii) initiatives to reduce the cost base; and
(iii) implementation of the strategy to becoming a design-led wool-focused business.

As a consequence, the Board considers the Group to be a going concern.

18

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

4. Segment performance

Unaudited Carpets Wool Total

Six months
ended
31 December
2019
Six months
ended
31 December
2018
Six months
ended
31 December
2019
Six months
ended
31 December
2018
Six months
ended
31 December
2019
Six months
ended
31 December
2018
$000 $000 $000 $000 $000 $000
External revenue 56,675 61,479 7,709 8,517 64,384 69,996
Inter-segment revenue - - 1,240 1,761 1,240 1,761
Total revenue $56,675 $61,479 $8,949 $10,278 65,624 71,757

Elimination of inter-segment revenue (1,240) (1,761)
Consolidated revenue $64,384 $69,996

Segment result before depreciation 3,564 5,459 78 14 3,642 5,473
Depreciation – owned assets (1,625) (1,691) (75) (64) (1,700) (1,755)
Depreciation -right-of-use assets (833) - (112) - (945) -
Segment result before
transformation costs

1,106

3,768

(109)

(50)

997

3,718
Transformation costs (816) - - - (816) -
Segment result after transformation
costs

290

3,768

(109)

(50)

181

3,718


Elimination of inter-segment profits 61 21
Unallocated corporate costs (752) (870)
Result from operating activities (510) 2,869

Net finance costs (1,055) (1,045)

Share of profit of equity-accounted
investees (net of tax)

-

644
Loss on sale of interest in, and
property held by, equity-accounted
investees (net of tax)


-


(11,964)
Loss before tax (1,565) (9,496)

Tax credit/(expense) 411 (537)
Loss after tax for the period $(1,154) $(10,033)

Capital expenditure 1,255 1,812 51 372 $1,306 $2,184


Carpets Wool Total

Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
$000 $000 $000 $000 $000 $000
Reportable segment assets 98,481 96,300 2,694 3,034 $101,175 $99,334

Reportable segment liabilities 27,769 21,496 1,493 2,349 29,262 23,845
Unallocated liabilities 18,050 20,500
Total liabilities $47,312 $44,345

Employee numbers
Operations 430 435 28 24 458 459
Unallocated 3 3
Total 461 462

19

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

4. Segment performance (continued)

The Group’s reportable segments are:
• carpets, which comprises the manufacturing and sale 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.

Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000
Revenue
New Zealand 36,135 38,851
Australia 26,573 28,145
Rest of the world 1,676 3,000

Total revenue $64,384 $69,996

Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
$000 $000
Non-current assets
New Zealand 41,641 34,955
Australia 1,776 665

Total non-current assets $43,417 $35,620

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.

20

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

5. Revenue

Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000
Sales of goods
Carpet 56,206 59,547
Wool 7,709 8,517
Carpet yarn 469 1,932
Total revenue $64,384 $69,996

6. Other income and gains

Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000
Rentals received 2 2
Dividends received 1 2
Net gain on sale of property, plant and equipment 2 31
Total other income and gains $5 $35


7. Net finance costs

Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000
Interest expense – loans and borrowings 761 1,045
Interest expense – lease liabilities 294 -
Net finance costs $1,055 $1,045

8. Inventories

During the six months ended 31 December 2019, the net realisable value provision in respect of
inventories increased by $348,000 (six months ended 31 December 2018: $294,000).

21

Cavalier Corporation Limited and subsidiary companies

Notes to the Financial Statements (continued)

9. Capital expenditure commitments

Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
$000 $000
Capital expenditure commitments $1,119 $361

10. 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:

Unaudited
Six months
ended
31 December
2019
Unaudited
Six months
ended
31 December
2018
$000 $000
Carrying value as at 1 July - 24,544
Share of profit after tax - 644
Share of changes in fair value of cash flow hedges (net of tax) - 72
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

11. Contingent liabilities

Unaudited
As at
31 December
2019
Audited
As at
30 June 2019
$000 $000
Indemnities in favour of Bank of New Zealand and National
Australia Bank (together, “the Bank”) in respect of Bank
guarantees relating to operating leases and other
commitments



$899



$879

12. Related party transactions

Apart from directors’ fees and senior managers’ remuneration, there have been no material transactions
with the directors, senior managers and their related parties or with any other related parties during the
period. No amounts were owed by/to related parties during the period.

13. Subsequent events

There have been no events subsequent to 31 December 2019 which would materially affect the financial
statements.

22

Cavalier Corporation Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information
For the six months ended 31 December 2019


The half year report for the six months ended 31 December 2019 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’.

23

Cavalier Corporation Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


Reconciliation of GAAP-compliant to non GAAP-compliant measures of profit/(loss) after tax

Six months ended 31 December 2019

GAAP Adjustments Normalised
$000 $000 $000

Revenue $64,384 - $64,384

EBITDA 2,135 816 2,951

Depreciation - owned assets (1,700) - (1,700)
Depreciation – right-of-use assets (945) - (945)

EBIT

(510) 816 306

Net interest expense (1,055) - (1,055)

Loss before tax (1,565) 816 (749)

Tax credit 411 (228) 183

Profit/(Loss) after tax $(1,154) 588 (566)

Abnormal net loss after tax (588) (588)

Loss after tax (GAAP) - $(1,154)

Analysis of adjustments

Profit/(Loss)
before tax
Tax effect Profit/(Loss)
after tax
$000 $000 $000
Transformation costs (816) 228 (588)
$(816) $228 $(588)

24

Cavalier Corporation Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


Reconciliation of GAAP-compliant to non GAAP-compliant measures of profit/(loss) after tax (continued)


Six months ended 31 December 2018

GAAP Adjustments Normalised
$000 $000 $000

Revenue $69,996 - $69,996

EBITDA 4,624 - 4,624

Depreciation (1,755) - (1,755)

EBIT

2,869 - 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) 11,964 2,468

Tax expense (537) - (537)

Profit/(Loss) after tax $(10,033) 11,964 1,931

Abnormal net loss after tax (11,964) (11,964)

Loss after tax (GAAP) - $(10,033)

Analysis of adjustments

Profit/(Loss)
before tax
Tax effect Profit/(Loss)
after tax
$000 $000 $000
Loss on sale of interest in, and property held by, equity-
accounted investees

(11,964)

-

(11,964)
$(11,964) - $(11,964)

25

Cavalier Corporation Limited

Corporate Directory


Board of Directors:
George Adams DipFSA(Hons), FCA, CMInstD Deputy Chairman of the Board of Directors
Independent Chairman of Audit Committee
Member of Remuneration and Nomination 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 Chairman of Remuneration Committee
Independent Member of Audit and Nomination Committees

Dianne Williams B.Com., MBA, CMInstD Member of Audit, Remuneration and Nomination
Independent Committees

Chief Executive Officer:
Paul Alston BBS, CA

Chief Financial Officer and Company Secretary:
Victor Tan CA, FCIS

Founding Shareholder:
The late Anthony Charles Timpson ONZM

Registered Office:
7 Grayson Avenue, Auckland 2014, P O Box 97-040, 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 92-119, 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