Bremworth Limited Analysis

Overview

Overview

Synonymous with quality, Bremworth has been voted New Zealand’s most trusted carpet brand* for the last eight years. With manufacturing facilities in Napier, Whanganui and Auckland, Bremworth employs over 400 people and is committed to sourcing its wool from New Zealand growers.

In 2020 the company began to implement its new purpose-led strategic plan when it announced it was exiting synthetic carpet production to focus on redefining Bremworth as a premium design and natural fibre company.

Progressive new initiatives are plotting a fresh course for Bremworth’s future. The team at Bremworth invite you to join them to find a more sustainable way.

Key Milestones :

November 2020 – Re-launched the Bremworth brand

December 2020 - Secured funding to execute the strategic plan, Right-sized the organisation

April 2021 - Secured a $1.9 million grant from MPI’s Sustainable Food and Fibre Futures (SFFF) fund to support Bremworth’s $4.9 million sustainability programme

May 2021 - Celebrated last ever synthetic carpet production

June 2021 - Commenced “Let’s Go Good Together” marketing strategy, Signed up to New Zealand Farm Assurance programme, Appointed new CEO Greg Smith

Markets:

The company is mainly focused on the Australasian woollen carpet and rug markets, but also exports carpet to the USA and Canada where it has identified opportunities in the premium end woollen segments of these markets.

Our growth strategy

• To grow the wool flooring market
• To grow our share of the market
• To expand our presence
• To focus on design-led innovation

Performance

The following information was extracted from Bremworth Limited's full year results, released on 29 August 2024:

Bremworth Reports $4.6m Profit After Tax in Full Year Result

Wool carpet and rug manufacturer Bremworth (NZX: BRW) has reported a $4.6 million profit after tax as it improves organisational efficiency and launches new carpet ranges.

The company has also signalled a return to dividends by 2026, marking the completion of a transition away from synthetics to the production of wool carpets and rugs.

Bremworth’s net profit after tax (NPAT) fell from $10.7m to $4.6m in the year ending 30 June 2024 (FY24). Cyclone Gabrielle related insurance income in FY24 totalled $26.5m (FY23 $35.5m), taking insurance proceeds received to date to $62.0m.

Annual revenue also declined $9.4 million to $80.3 million. This reflects the inability to meet all consumer demand with the severely depleted inventory levels that resulted from the cyclone’s flooding of the Napier yarn plant at the start of the period. Challenges faced in accessing yarn at the right quantity also impacted revenue until recently.

While constraints on stock availability saw annual revenue fall, sales from its wool-buying division, Elco Direct, increased as it increased its share of the wool clip at the farm gate to drive its volumes up, despite wool volume reducing nationally.

The company is unencumbered by debt and its end-of-year cash balance was $31.6 million, down $7.7 million from the previous year end, as it invested heavily to lift inventory levels $8.2 million to $29.3 million - in a move designed to rebuild trade confidence and ensure continuity of supply.