Preliminary FY21 Unaudited Results Announcement

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

Based on preliminary annual financial information for year ended 30 June 2021 (Unaudited)

Results for announcement to the market
Name of issuer Bremworth Limited
Reporting Period 12 months to 30 June 2021
Previous Reporting Period 12 months to 30 June 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$111,577 (5%)
Total Revenue $111,577 (5%)
Net profit/(loss) from
continuing operations
$1,684 Prior year $(21,451)
Total net profit/(loss) $1,684 Prior year $(21,451)
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
$0.36 $0.47
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to accompanying Board-approved market release
Authority for this announcement
Name of person

authorised
to make this announcement
Victor Tan
Contact person for this
announcement
Victor Tan
Contact phone number 027 668 8963
Contact email address vtan@bremworth.co.nz
Date of release through MAP

30 August 2021

Announcement based on financial statements which are in the process of being audited.

---

MARKET RELEASE
30 August 2021
Bremworth Announces Preliminary FY21 Unaudited Results and Return to Profit

• Results in line with expectations as Bremworth continues to execute its all wool and natural
fibres strategy
• Strong operating cashflows of $16.2m, up from $6.8m in prior year
• 55% year on year improvement in normalised EBITDA
1

• Return to profit with $1.7m net profit after tax, up from $21.5m loss in FY20
• All debt repaid and $22.5m cash as at 30 June 2021
• Robust balance sheet providing a strong platform to execute the strategy

New Zealand wool carpet and rug business, Bremworth Limited (NZX: BRW), has reported escalating
wool carpet sales, strong cashflows and a return to profit as it continues its journey to execute its all
wool and natural fibres strategy.

The company has today announced its preliminary unaudited results for the 12 months ended 30 June
2021, with results in line with management expectations. Revenue was $111.6m, with EBITDA of
$4.9m and normalised EBITDA up 55% to $3.6m. Net profit after tax improved to $1.7m, up from a loss
of $21.5m in the prior year.

Group revenue was down 5% on the prior year, reflecting Bremworth’s exit from the synthetic carpet
market, with synthetic carpet stocks selling down faster and at a higher margin than anticipated.
Pleasingly, sales of wool carpets grew strongly in the second half, increasing 17% year on year. The
improved sales mix was underpinned by strong consumer demand in both New Zealand and Australia,
despite supply chain issues and COVID-related disruption to the export supply chain.

Revenue from the wool buying business, Elco Direct, was down 5% , but it recorded strong year on
year margin growth as operating conditions improved.

Operating expenses increased as expected, with the right sizing of the business for the new strategy
and commencement of brand awareness campaigns in the second half of the year. Earnings before
interest, tax, depreciation and amortisation (EBITDA) increased to $4.9m, up from $(8.9)m in FY20,
with normalised EBITDA up 55% to $3.6m.

Group profit for the year was $1.7m, which included the costs associated with the right-sizing of the
organisation and a $2.6m net gain on the sale and leaseback of the Auckland property. Excluding these
one-off items, normalised profit after tax was $0.3m (FY20: normalised loss after tax of $3.5m).



1
Normalised EBITDA is a non-GAAP measure and is earnings before interest, tax, depreciation and
amortisation and non-trading adjustments of $1.3m which comprise net gain on sale and leaseback of
property of $2.6m and restructuring costs of $(1.3)m.

Tight control over working capital continues. Inventory levels reduced as planned due to the sell down
of synthetic carpets and are expected to increase again over time as wool carpet sales grow. All debt
was repaid during the year, with cash of $22.5m at year end providing a strong platform and the
financial resources to execute the new strategy. Operating cashflow improved to $16.2m, up 138% on
the prior year.

Prudent capital management remains a priority as the Company continues to invest in resetting the
business and expanding capacity to support growth. No dividend has been declared.

Strategic Progress

As previously advised, the priorities for FY21 to FY23 are to reset the business, commence the new
strategy and navigate the economic recovery post-COVID.

The company has successfully achieved the near-term goals set in 2020:
• Announced ‘all wool and natural fibres’ strategy
• Exited the synthetic carpet market, which is essentially plastic, and in May 2021, celebrated
the last ever roll of synthetic carpet to be made in the plant
• Rightsized the organisational structure
• Successful $25.5 million sale and leaseback of the Auckland property in December 2020,
providing funding for the execution of Bremworth’s five-year strategic plan.

Strategic initiatives included:
• The launch of the re-energised Bremworth brand for the core carpet business
• Rollout of the Lifestyle (affordable wool) Collection, providing greater choice for consumers
• Expansion of the retailer distribution networks, predominantly in Australia
• Launch of a differentiated brand strategy in 2H21, designed to build demand for Bremworth
branded product, grow the New Zealand wool carpet category and support the broader New
Zealand wool industry.

Hand in hand with the commercial strategy has been the commencement of Bremworth’s
sustainability journey. In the last few months, the company launched a $4.9 million sustainability-
based research programme. This will focus on reducing the company’s carbon footprint, using more
natural solutions and finding new, innovative ways to manufacture its products that are better for
people and the planet. More recently, Bremworth signed up to the New Zealand Farm Assurance
Programme, which will provide consumers with a product where the wool has met traceability,
authentic origin and animal welfare standards.

Chair of Bremworth, George Adams, said: “It has been an exciting year for Bremworth as we transform
our business. Our decision to stop selling synthetic carpets was brave and disruptive. However, we
believe it was the right thing for people, the planet and our business and we are confident that these
sales will soon be replaced, and indeed surpassed, by higher margin, higher quality wool carpet sales.
Already we are seeing a lift in our wool carpet sales, and we expect this momentum to continue as
consumer demand grows for natural and sustainable quality products.

“We are heading into the new financial year with a strong balance sheet, funding in place to continue
to execute our five-year plan, a right sized organisational footprint, and a clear strategic pathway, as
well as new leadership following the appointment of Greg Smith as CEO in June 2021. We look forward
to adding value for our shareholders, staff and consumers.”

Outlook

Supply chain and COVID-related disruptions including a tight labour market are expected to continue
over the short term. However, consumer demand has strengthened over the pandemic period as
people spend money on consumer goods and housing in lieu of travel. There is also growing awareness
of, and sentiment towards, natural products, with increasing Government policy addressing
sustainability and climate change.

The priorities for this year are four-fold:
1. Create demand for Bremworth branded product
2. Optimise operational efficiency and commercial excellence
3. Super charge the digital business
4. Prioritise innovation, sustainability and partnerships.

Investment into the new strategy will continue in FY22, in particular, technology, Bremworth’s
sustainability journey and marketing to raise awareness and drive sales of Bremworth’s wool carpets
and rugs.

CEO Greg Smith said: “The opportunity for Bremworth is significant. Wool carpets make up only a
small portion of carpet sales overall and there is an enormous opportunity for wool to rebuild share in
the market as consumers look for more natural alternatives in their lives. They know that wool is a
miracle fibre, naturally providing health, safety, design and comfort benefits. We are excited about our
future and the opportunities to add value for our customers.”

ENDS

For further information please contact:

Greg Smith
Chief Executive Officer
gregsmith@bremworth.co.nz
+64 21 711 622
Jackie Ellis
Media and Investor Relations
Jackie@ellisandco.co.nz
+64 27 246 2505

---

FY21
RESULTS
FOR THE 12 MONTHS
ENDED 30 JUNE 2021
FY21
RESULTS

FY21
RESULTS
OUR VISION IS TO BECOME A GLOBAL LEADER
IN DESIGNING AND CREATING DESIRABLE,
SAFE, SUSTAINABLE AND HIGH-PERFORMING
NATURAL INTERIOR SOLUTIONS

FY21 KEY
MILESTONES
FY21
RESULTS

July
2020
New purpose led
strategic direction
was announced.
December
2020
Secured funding
to execute the
strategic plan.
Right sized the
organisation.
May
2021
Celebrated last ever
synthetic carpet
production.
November
2020
Re-launched
Bremworth brand.
April
2021

Secured a $1.9 million
grant to support
Bremworth’s $4.9m
sustainability
programme.
June
2021
Commenced Let’s
Go Good Together
marketing strategy.
Bremworth signed up
to New Zealand Farm
Assurance Programme.
Appointment of new
CEO Greg Smith.
FY21 KEY
MILESTONES
FY21
RESULTS

FY21 OPERATING
ENVIRONMENT
• Ongoing impact of COVID-19 lockdowns, particularly in Australia
• Global supply chain issues, particularly shipping capacity and port congestion
• Consumers investing in their homes, in lieu of travel and following lockdown
• Growing consumer awareness and sentiment towards natural products
• Increasing Government policy addressing sustainability and climate change
FY21
RESULTS

FY21 TRADING
PEFORMANCE
• Strong performance in NZ post March 2020 lockdown continued into FY21
• Softer performance in Australia, with some impact from supply chain challenges
and lost trading days due to COVID-lockdowns
• Faster than anticipated sell down of synthetics in 1H21 and at a higher margin
• Growing demand for wool carpets and rugs in 2H21
• Revenue down 5% for wool buying business Elco Direct, but strong year on year
improvement in margin
FY21
RESULTS

FINANCIAL
SNAPSHOT
• FY21 results in line with expectations
• Return to profit with $1.5m net profit
after tax, up from $21.5m loss in FY20
• All debt repaid and $22.5m cash at
30 June 2021
• Strong cashflows of $16.2m, up from
$6.8m prior year
• Robust balance sheet to execute the
transformation strategy
• Prudent capital management and
no dividend declared
FY21
111.6
4.9
(1.3)
3.6
1.8
0.1
22.5
FY20
118
(8.9)
11.2
2.3
(21.5)
(3.5)
(14.5)
$millions
Revenue
EBITDA
Non-Trading Adjustments*
Normalised EBITDA
Net Profit/(Loss) After Tax
Normalised NPAT/(NLAT)
Cash/(Net Bank Debt)
FY21
RESULTS
*Normalised is a non-GAAP measure of performance, with FY21 non-trading adjustments of $1.3m
comprising net gain on sale and leaseback of property of $2.6m and restructuring costs of $(1.3)m.
See appendix slides for for full reconciliations of GAAP to non-GAAP financial information.

REVENUE
Total revenue of $111.6m, down 5% versus FY20:

• due to the conscious decision to exit the synthetic
carpet market

• offset by 17% increase in wool carpet sales in line
with the company’s strategic purpose-led plan, with
improved sales mix underpinned by strong
consumer demand for high quality wool carpets

• and a 5% decrease in revenue for Elco Direct
FY21
RESULTS
Revenue ($ millions)
80
0
10
20
30
40
50
60
70
FY21
FY20
Carpet -
Wool
Carpet -
Non-wool
Wool fibre ex
Elco Direct
Others

EBITDA
• Increased EBITDA to $4.9m, up from $(8.9)m in FY20
• Normalised EBITDA up 55% to $3.6m
• Investment into people and marketing as new strategy
is executed with increase in operating expenses as
planned
• Margin growth expected as sales of wool carpets
escalate in line with strategy
FY21
RESULTS
EBITDA ($ millions)
6.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
FY21
FY20
EBITDANormalised
EBITDA

df
FINANCIAL
POSITION
• Tight control over working capital continues
• Inventory reduction due to exit from synthetics and
ahead of increase in woollen inventory levels
• Bank debt fully repaid and cash of $22.5m at year end
to undertake strategic transformation
• Operating cashflow up 138% to $16.2m (FY20: $6.8m)
FY21
12.5
20.0
(21.0)
11.5
0.0
22.5
22.5
FY20
12.6
32.1
(16.1)
28.6
(15.8)
1.3
(14.5)
$millions
Trade and Other Receivables
Inventories
Trade and Other Payables
Working Capital
Bank Debt
Cash
Cash/(Net Bank Debt)
FY21
RESULTS

GROWTH
STRATEGY
FY21
RESULTS

FY21
RESULTS
GROW THE WOOL FLOORING MARKET.
GROW OUR SHARE OF THE MARKET.
EXPAND OUR PRESENCE.
DESIGN-LED INNOVATION.

PRIORITIES
FOR FY22
FY21
RESULTS

PRIORITIES
FOR FY22
• Create demand for Bremworth branded product
• Optimise operational efficiency and commercial excellence
• Super charge the digital business
• Prioritise innovation, sustainability and partnerships
FY21
RESULTS

FY22
OUTLOOK
FY21
RESULTS

FY22
OUTLOOK
• COVID-related challenges and supply chain headwinds expected to continue
• Increased consumer awareness of the health and wellbeing benefits of natural fibres
• Demand for NZ wool and wool soft flooring expected to increase
• Ongoing investment in demand creation, sustainability and technology
FY21
RESULTS

A STRONG
FOUNDATION
FOR THE
FUTURE
FY21
RESULTS

A STRONG FOUNDATION
FOR THE FUTURE
• Trusted iconic brand known for premium products
• New brand strategy aligned to changing consumer landscape and trends
• Industry leading people, quality and design
• Significant cash resources in place for execution of strategy
FY21
RESULTS

GOVERNANCE
• Alan Clarke stepped down as Chair in July 2020 and as a director in December 2020
• George Adams appointed as Chair in July 2020
• Paul Izzard appointed as director in November 2020
• Founder Grant Biel to retire as director at 2021 Annual Meeting
FY21
RESULTS

FY21
RESULTS

APPENDIX
FY21
RESULTS

RECONCILIATION OF
GAAP TO NORMALISED
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.
$millions
GAAP NPAT/(NLAT)
Reversal of abnormal items (after tax):
Net gain on sale of property
Impairment of plant and equipment
Impairment of right-of-use assets
Transformation/Restructuring costs
Change in legislation regarding tax depreciation on buildings
Derecognition of deferred tax asset
Normalised NPAT/(NLAT)
FY21
1,811
(2,624)
0
0
915
0
0
103
FY20
(21,451)
0
5,095
2,094
854
(2,940)
12,891
(3,456)
FY21
RESULTS

RECONCILIATION OF
GAAP TO NORMALISED
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.
$millions
EBITDA
Reversal of abnormal items (before tax):
Net gain on sale of property
Impairment of plant and equipment
Impairment of right-of-use assets
Transformation/Restructuring costs
Normalised EBITDA
FY21
4,926
(2,624)
0
0
1,271
3,573
FY20
(8,872)
0
7, 0 7 7
2,909
1,186
2,300
FY21
RESULTS

DISCLAIMER
• This presentation has been prepared by Bremworth (“BRW”). The information in this presentation
is of a general nature only. It is not a complete description of BRW.
• This presentation is not a recommendation or offer of financial products for subscription, purchase or sale,
or an invitation or solicitation for such offers.
• This presentation is not intended as investment, financial or other advice and must not be relied on by any prospective investor. It does not take
into account any particular prospective investor’s objectives, financial situation, circumstances or needs, and does not purport to contain all the
information that a prospective investor may require. Any person who is considering an investment in BRW securities should obtain independent
professional advice prior to making an investment decision, and should make any investment decision having regard to that person’s own
objectives, financial situation, circumstances and needs.
• Past performance information contained in this presentation should not be relied upon (and is not) an indication of future performance.
This presentation may also contain forward looking statements with respect to the financial condition, results of operations and business,
and business strategy of BRW. Information about the future, by its nature, involves inherent risks and uncertainties. Accordingly, nothing in
this presentation is a promise or representation as to the future or a promise or representation that a transaction or outcome referred to in this
presentation will proceed or occur on the basis described in this presentation. Statements or assumptions in this presentation as to future
matters may prove to be incorrect.
• A number of financial measures are used in this presentation and should not be considered in isolation from, or as a substitute for,
the information provided in BRW’s financial statements available at www.bremworth.co.nz.
• BRW and its related companies and their respective directors, employees and representatives make no representation or warranty of any nature
(including as to accuracy or completeness) in respect of this presentation and will have no liability (including for negligence) for any errors in or
omissions from, or for any loss (whether foreseeable or not) arising in connection with the use of or reliance on, information in this presentation.
FY21
RESULTS

---

PRELIMINARY ANNUAL FINANCIAL INFORMATION - YEAR ENDED 30 JUNE 2021
CONTENTS
Statement of Profit or Loss
2
Statement of Comprehensive Income
3
Statement of Changes in Equity
4
Statement of Financial Position
6
Statement of Cash Flows
7
Notes to the preliminary annual financial information
1. Company information
9
2. General information relating to preparation of annual financial information
9
3. Financial performance
3a. Segment performance10
3b. Earnings per share12
3. Net tangible assets
12
NON-GAAP FINANCIAL INFORMATION
Disclosure of non-GAAP financial information
13
Page 1

Bremworth Limited and subsidiary companies
Consolidated Statement of Profit or Loss
For the year ended 30 June 2021
UnauditedAudited
20212020
Note$000$000
111,577 117,981
(80,145) (95,227)
31,431 22,754
2,822 35
(19,914) (18,255)
(9,819) (6,696)
(1,271) (1,186)
- (7,077)
- (2,909)
3,249 (13,334)
(1,056) (2,535)
2,192 (15,869)
(508) 7,309
- (12,891)
$1,684 ($21,451)
3b2.45 (31.23)
3b2.41 (31.23)
Derecognition of deferred tax assets
Profit/(Loss) after tax for the year
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
Restructuring costs
Impairment of plant and equipment
Impairment of right-of-use assets
Finance costs
Profit/(Loss) before income tax
Income tax (expense)/benefit
Revenue from contracts with customers
Cost of sales
Gross profit
Other income and gains
Distribution expenses
Administration expenses
Page 2

Bremworth Limited and subsidiary companies
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
UnauditedAudited
20212020
Note$000$000
1,684 (21,451)
299 (178)
(77) 315
(47) (38)
174 99
$1,858 ($21,352)
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges transferred to profit or loss
Income tax on changes in fair value of cash flow hedges
Total other comprehensive income
Total comprehensive income for the year
Profit/(Loss) after tax for the year
Other comprehensive income that may be reclassified subsequently to profit or loss
Page 3

Bremworth Limited and subsidiary companies
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Share Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Retained
Earnings
Total Equity
Note$000$000$000$000$000$000
21,846 (120) (1,420) - 13,331 33,637
- - - - 1,684 1,684
- 174 - - - 174
- 174 - - 1,684 1,858
- - - 51 - 51
$21,846 $54 ($1,420)$51 $15,015 $35,546
Transaction with owners in their capacity as owners
Share-based payments - value of employee services
Total equity at 30 June 2021
Total equity at 1 July 2020
Total comprehensive income for the year
Profit after tax
Other comprehensive income that may be reclassified subsequently
to profit or loss
Changes in fair value of cash flow hedges (net of income tax)
Total comprehensive income for the year
Unaudited
Page 4

Bremworth Limited and subsidiary companies
Consolidated Statement of Changes in Equity (continued)
For the year ended 30 June 2020
Share Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Total Equity
Note$000$000$000$000$000
21,846 (219) (1,420) 34,782 54,989
- - - (21,451) (21,451)
- 99 - - 99
- 99 - (21,451) (21,352)
$21,846 ($120)($1,420)$13,331 $33,637
Loss after tax
Other comprehensive income that may be reclassified subsequently
to profit or loss
Changes in fair value of cash flow hedges (net of income tax)
Total comprehensive income for the year
Total equity at 30 June 2020
Audited
Total equity at 1 July 2019
Total comprehensive income for the year
Page 5

Bremworth Limited and subsidiary companies
Consolidated Statement of Financial Position
As at 30 June 2021
UnauditedAudited
20212020
Note$000$000
12,094 22,725
9,968 430
514 600
22,576 23,755
22,508 1,276
12,520 12,607
20,034 32,081
109 160
43 102
55,215 46,226
$77,790 $69,981
EQUITY
21,846 21,846
54 (120)
(1,420) (1,420)
51 -
15,015 13,331
35,546 33,637
19,530 2,224
987 888
672 584
21,188 3,696
- 15,800
12,966 10,617
136 128
4,903 3,316
2,003 1,345
662 710
34 732
351 -
21,056 32,648
42,244 36,344
$77,790 $69,981
Total current liabilities
Total liabilities
Total equity and liabilities
Employee benefits
Employee entitlements
Lease liabilities
Provisions
Derivative financial instruments
Deferred income
Lease liabilities
Employee benefits
Provisions
Total non-current liabilities
Loans and borrowings
Trade payables and accruals
Cash flow hedging reserve
Foreign currency translation reserve
Share-based payment reserve
Retained earnings
Total equity
LIABILITIES
Inventories
Derivative financial instruments
Income tax receivable
Total current assets
Total assets
Share capital
Property, plant and equipment - owned
Property, plant and equipment - right-of-use
Deferred tax asset
Total non-current assets
Cash and cash equivalents
Trade receivables, other receivables and prepayments
ASSETS
Page 6

Bremworth Limited and subsidiary companies
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
UnauditedAudited
20212020
Note$000$000
111,526 117,836
(94,081) (107,965)
17,445 9,871
494 -
6 5
(229) (10)
(469) (2,006)
(675) (536)
7 -
(363) (551)
16,216 6,773
28 28
25,022 -
(2,481) (2,119)
22,569 (2,091)
(15,800) (4,700)
(1,744) (1,490)
(17,544) (6,190)
1,276 2,724
(10) 60
$22,508 $1,276
21,242
(1,508)
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes on cash
Cash and cash equivalents at end of the year
Net cash flow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans and borrowings
Principal elements of lease payments
Net cash flow from financing activities
Net increase/(decrease) in cash and cash equivalents
Income tax paid
Net cash flow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant and equipment
Proceeds from sale of property
Acquisition of property, plant and equipment
Government grants received
Other receipts
GST paid
Interest paid - bank borrowings
Interest paid - lease liabilities
Interest received
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers
Cash paid to suppliers and employees
Page 7

Bremworth Limited and subsidiary companies
Consolidated Statement of Cash Flows (continued)
For the year ended 30 June 2021
RECONCILIATION OF PROFIT/(LOSS) WITH NET CASH FLOW FROM OPERATING ACTIVITIES
UnauditedAudited
20212020
$000$000
1,684 (21,451)
1,279 2,683
398 1,779
51 -
- 7,077
- 2,909
86 (8,073)
- 12,891
1,693 (427)
351 (9)
10 (174)
(2,650) 35
10 (60)
87 (263)
11,282 15,332
59 213
2,349 (6,400)
(473) 711
$16,216 $6,773
Trade payables and accruals
Derivative financial instruments
Net cash flow from operating activities
Net (gain)/loss on sale of property, plant and equipment
Net loss/(gain) on foreign currency balance
Changes in working capital items:
Trade receivables, other receivables and prepayments
Inventories
Income tax receivable
Impairment of right-of-use assets
Deferred tax credit
Derecognition of deferred tax assets
Employee benefits and entitlements
Deferred income
Provisions
Profit/(Loss) after tax for the year
Add/(Deduct) non-cash items:
Depreciation - owned assets
Depreciation - right-of-use assets
Share-based payments - value of employee services
Impairment of plant and equipment
Page 8

Bremworth Limited and subsidiary companies
Notes to the preliminary annual financial information
For the year ended 30 June 2021
1.
On 30 August 2021, Cavalier Corporation Limited changed its name to Bremworth Limited.
2.
The Statement of Profit or Loss for the year ended 30 June 2020 included $784,000 in distribution expenses that should have been included in cost of sales.
This has been corrected by restating both distribution expenses and cost of sales in the year ended 30 June 2020 by $784,000.
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the preliminary annual
financial information. Unrealised losses are also eliminated unless the underlying intra-group transaction provides evidence that the asset transferred is
impaired.
2b. Changes in accounting policies
The Group previously capitalised costs incurred in configuring or customising certain suppliers’ application software in certain cloud computing
arrangements as fixed assets, as the Group considered that it would benefit from those costs to implement the cloud-based software over the expected
terms of the cloud computing arrangements. Following the IFRS Interpretations Committee (IFRIC) agenda discussion on Configuration or Customisation
Costs in a Cloud Computing Arrangement in March 2021 (ratified by International Accounting Standards Board (IASB) in April 2021), the Group has
reconsidered its accounting treatment and adopted the guidance set out in the IFRIC agenda decision, which is to recognise those costs as intangible
assets only if the activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result
in an intangible asset are expensed as incurred, unless they are paid to the suppliers of the cloud-based software to significantly customise the cloud-based
software for the Group, in which case the costs paid upfront are recorded as prepayments for services and amortised over the expected terms of the cloud
computing arrangements.
As a result of this change in accounting policy, the Group has determined that certain costs relating to the implementation of cloud-based software would
need to be expensed when they were incurred, as the amounts were paid to third parties who were not subcontracted by the supplier of the cloud-based
software and did not create separate intangible assets controlled by the Group, or significantly customise the cloud-based software for the Group.
The change in policy has been applied retrospectively. The impact of this change is an increase of $494,000 to administration expenses in the Statement of
Profit or Loss for the year ended 30 June 2021 with a corresponding decrease to property, plant and equipment (owned) in the Statement of Financial
Position. The impact on the financial statements for the year ended 30 June 2020 is nil.
2c. Restatement of balances
The Company is registered under the Companies Act 1993 and is an FMC reporting entity for the purposes of the Financial Reporting Act 2013 and the
Financial Markets Conduct Act 2013.
The principal activities of the Group comprise wool acquisition, and carpet and rug manufacturing and sales.
All Group subsidiaries are wholly-owned.
GENERAL INFORMATION RELATING TO THE PREPARATION OF THE PRELIMINARY ANNUAL FINANCIAL INFORMATION
2a. Basis of consolidation
The preliminary annual financial information incorporates the assets and liabilities of all subsidiaries of the Group as at 30 June 2021 and the results of all
subsidiaries for the year then ended. Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
COMPANY INFORMATION
Bremworth Limited ("Bremworth" or "Company") is a limited liability company that is domiciled and incorporated in New Zealand.
The preliminary annual financial information presented are for Bremworth and its subsidiaries (“Group”) as at, and for the year ended, 30 June 2021.
Page 9

3.
3a.
Revenue
Major customers
Australia 694 1,015
$22,576
$23,755
None of the Group’s external customers contributed revenues in excess of 10% of the Group’s total revenues.
30 Jun 202130 Jun 2020
Non-current assets$000$000
New Zealand 21,882 22,740
Rest of the world (predominantly Canada and
the USA)
2,609
2,898
$111,577
$117,981
As atAs at
New Zealand 63,901 65,012
Australia 45,067 50,071
Inter-segment transactions
All inter-segmental transactions included in revenue and operating expenses for each segment are on an arm’s-length basis. Inter-segmental sales during
the year and intercompany profits on stocks at balance date are eliminated on consolidation.
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.
20212020
$000$000
· carpet sales and manufacturing (Carpet); and
· wool acquisition (Wool).
An operating segment is a component of the Group:
· that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with
any of the Group’s other components;
· whose operating results are regularly reviewed by the Group’s chief operating decision maker - in this case, the Chief Executive Officer - to make
decisions about the resources to be allocated to the segment and to assess its performance; and
· for which discrete financial information is available.
FINANCIAL PERFORMANCE
This section deals with the financial performance of the Group and addresses, among other things, the financial performance of the Group’s reportable
segments and the key areas that impact on the Group’s profitability, including operating revenue, other income, gains/losses on sale of property, plant and
equipment, expenses and taxation.
3a. Segment performance
Reportable segments
The Group’s reportable and operating segments are:
Page 10

202120202021202020212020
$000$000$000$000$000$000
95,547 101,135 16,029 16,846 111,577 117,981
- - 2,313 1,788 2,313 1,788
Total revenue 95,547 101,135 18,343 18,634 113,890 119,769
(2,313) (1,788)
$111,577 $117,981
6,944 3,484 758 102 7,703 3,586
(1,136) (2,532) (143) (151)
(1,279) (2,683)
(275) (1,649) (123) (130) (398) (1,779)
5,533 (697) 492 (179) 6,026 (876)
(1,271) (1,186) - - (1,271) (1,186)
- (7,077) - - - (7,077)
- (2,909) - - - (2,909)
4,262 (11,869) 492 (179) 4,755 (12,048)
(49) 50
(1,457) (1,336)
3,249 (13,334)
(1,056) (2,535)
2,192 (15,869)
(508) (5,582)
$1,684 ($21,451)
202120202021202020212020
$000$000$000$000$000$000
50,754 67,474 4,528 2,507 55,282 69,981
22,508 -
$77,790 $69,981
2,481 2,067 - 52 $2,481 $2,119
18,734 19,363 1,978 1,181 20,711 20,544
21,533 15,800
$42,244 $36,344
Total assets
Capital expenditure
Reportable segment liabilities
Unallocated liabilities - Loans and borrowings
Total liabilities
Carpets sales and
manufacturing
Wool acquisitionTotal
Reportable segment assets
Unallocated assets
Unallocated corporate costs
Results from operating activities
Finance costs
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss) after tax for the year
Segment result before restructuring and impairment
Restructuring costs
Impairment of plant and equipment
Impairment of right-of-use assets
Segment result after restructuring and impairment
Elimination of inter-segment profits
Inter-segment revenue
Elimination of inter-segment revenue
Consolidated revenue
Segment result before depreciation, restructuring related
expenses and impairment
Depreciation - owned assets
Depreciation - right-of-use assets
3a. Segment performance (continued)
Carpets sales and
manufacturing
Wool acquisitionTotal
External revenue
Page 11

3b.
4
3c.
Number of ordinary shares outstanding 68,679,098 68,679,098
Net tangible assets per share ($) 0.36 0.47
In calculating the diluted earnings per share, the Company has taken into account the maximum number of shares that could be issued under the
Company's long term incentive scheme.
NET TANGIBLE ASSETS
4a. Net tangible assets per share
20212020
Net tangible assets of the Company ($000) 25,065 32,607
Weighted average number of ordinary shares outstanding 69,750,492 68,679,098
Diluted EPS (cents) 2.41 (31.23)
Diluted earnings/(loss) per share (Diluted EPS)
20212020
Profit/(Loss) after tax attributable to shareholders of the Company ($000) 1,684 (21,451)
Weighted average number of ordinary shares outstanding 68,679,098 68,679,098
Basic EPS (cents) 2.45 (31.23)
Basic earnings/(loss) per share (Basic EPS)
20212020
Profit/(Loss) after tax attributable to shareholders of the Company ($000) 1,684 (21,451)
3b. Earnings per share
Page 12

NON-GAAP FINANCIAL INFORMATION
CONTENTS
Disclosure of non-GAAP financial information
14
Page 13

· taking care when describing, or referring to, items as ‘one-off’ or ‘non-recurring’.
- 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
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 items of an
abnormal nature, including items that are unlikely to recur or otherwise unusual in nature.
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 collating the Trend Statement, 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:
Bremworth Limited and subsidiary companies
Disclosure of non-GAAP financial information
The Directors believe that the non-GAAP financial information contained within the financial statements (more particularly, the non-GAAP measures of
financial performance such as “EBITDA (normalised)”, “EBIT (normalised)”, “Profit before income tax (normalised)” and “Profit after tax (normalised)” as
well as the various other financial ratios that are based on normalised results – for example, earnings per share) 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 abnormal items within the GAAP-compliant results and the way analysts distinguish between GAAP and
non-GAAP measures of profit.
Page 14

AdjustmentsNormalisedAdjustmentsNormalised
$000$000$000$000
- $111,577 - $117,981
(1,353) 3,573 11,172 2,300
- (1,279) - (2,683)
- (398) - (1,779)
(1,353) 1,896 11,172 (2,162)
- (1,056) - (2,535)
(1,353) 840 11,172 (4,697)
- (508) 6,823 1,241
(1,353) 332 17,995 (3,456)
1,353 1,353
(17,995) (17,995)
$0 $1,684 $0 ($21,451)
Tax effect
Profit/(Loss)
after tax
Tax effect
(Loss)/Profit
after tax
$000$000$000$000
- (1,271) 332 (854)
- - 1,982 (5,095)
- - 815 (2,094)
- - 2,940 2,940
- - (12,891) (12,891)
- 2,624 - -
$0 $1,353 ($6,823)($17,995)
Loss per share (basic and diluted) (cents)
(31.23) (5.03)
Year ended 30 June 2020
Loss attributable to shareholders ($000)($21,451)$17,995 ($3,456)
Weighted average number of ordinary shares 68,679,098 68,679,098
Earnings per share (basic) (cents)
2.45 0.48
Earnings per share (diluted) (cents) 2.41 0.48
Year ended 30 June 2021
Profit attributable to shareholders ($000)$1,684 ($1,353)$332
Weighted average number of ordinary shares 68,679,098 68,679,098
$1,353
($11,172)
Calculation of basic and diluted earnings/(loss) per share
under GAAP and non-GAAP measures of profit/loss after
tax
GAAP-compliant reported
profit/(loss) after tax
Reverse abnormal items
(net of tax)
Non-GAAP-compliant
normalised profit/(loss) after
tax
Derecognition of deferred tax
assets
- -
Gain on sale and leaseback of
property
2,624 -
Impairment of right-of-use
assets
- (2,909)
Impending change in legislation
relating to tax depreciation on
buildings
- -
Restructuring costs (1,271) (1,186)
Impairment of plant and
equipment
- (7,077)
Abnormal gains/(losses) after
tax
Profit/(Loss) after tax (GAAP)
Analysis of abnormal items
Profit/(Loss) before tax(Loss)/Profit before tax
$000$000
Tax (expense)/benefit (508) (5,582)
Profit/(Loss) after tax 1,684 (21,451)
Finance costs (1,056) (2,535)
Profit/(Loss) before tax 2,192 (15,869)
Depreciation - right-of-use
assets
(398) (1,779)
EBIT 3,249 (13,334)
EBITDA 4,926 (8,872)
Depreciation - owned assets (1,279) (2,683)
GAAPGAAP
$000$000
Revenue$111,577
$117,981
Bremworth 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
Year ended 30 June 2021Year ended 30 June 2020
Page 15