Preliminary FY22 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 Bremworth Limited
Reporting Period Six months to 31 December 2021
Previous Reporting Period Six months to 31 December 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$48,720 (19%)
Total Revenue $48,720 (19%)
Net profit/(loss) from
continuing operations
$1,001 (74%)
Total net profit/(loss) $1,001 (74%)
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
$0.38 $0.39
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
FY22 H1 report
Authority for this announcement
Name of person

authorised
to make this announcement
Victor Tan
Contact person for this
announcement
Greg Smith or Jackie Ellis
Contact phone number +64 21 711 622 (Greg Smith) or +64 27 246 2505 (Jackie Ellis)
Contact email address gregsmith@bremworth.co.nz or Jackie@ellisandco.co.nz
Date of release through MAP

25 February 2022

Unaudited financial statements accompany this announcement.

---

MARKET RELEASE
25 February 2022

Bremworth 1H22 Results
Unaudited results for the six months to 31 December 2021

 Results in line with management expectations, despite COVID-19 and supply chain
disruptions
 Strong progress on FY22 strategic priorities
 Growing consumer demand for Bremworth’s wool carpet and rugs; uplift in wool carpet
sales and margins
 Strong result from Elco Direct wool buying business
 Over 50% of 1H22 capex invested into manufacturing plant improvements to enable higher
output

$millions (unaudited) 1H22 1H21
Total revenue 48.7 60.3
Wool carpet revenue 37.2 35.4
Gross margin % 31.2% 29.9%
EBITDA 2.5 5.7
EBITDA (Normalised)
1
2.5 4.3
NPAT 1.0 3.8
NPAT (Normalised)
1
0.9 1.8
Net cash 18.5 26.3


New Zealand wool carpet and rug business, Bremworth Limited (NZX: BRW), has reported growing
demand for its premium, New Zealand made wool carpet and rugs as it continues to progress its
purpose led, wool and natural fibres strategy.

Bremworth’s reported net profit after tax of $1.0m was in line with the company’s expectations,
despite COVID-19 disruptions (particularly in the first quarter of the financial year) and supply chain
congestion. A strong recovery was seen later in the second quarter, with positive demand trends
expected to continue into 2H22.

CEO Greg Smith, who was appointed in July 2021, commented: “Our long term all wool strategy is on
track and the company is making excellent progress across its FY22 priorities. Despite the challenging
conditions and supply chain headwinds, our team has delivered a solid result.

1
Prior year 1H21 Normalised EBITDA and Normalised NPAT excluded non-trading adjustments of $1.4m,
comprising a net gain on sale and leaseback of property of $2.5m and restructuring costs of $(1.1)m. A
reconciliation and further commentary are set out at pages 23 to 25 of the half year report.

“Consumer sentiment is changing, and we have an enormous market opportunity to shift consumers
from synthetic/plastic carpets to beautiful, natural, New Zealand made wool carpets. There is strong
demand in both New Zealand and Australia, and we are investing in our business to expand our
capacity. FY22 is the year we have started to rebuild the new Bremworth, a business for the future,
and while there is much still to do, we are confident in our strategy and excited about our plans.”

Financial Results

The 1H22 result reflects Bremworth’s transition to the new all wool strategy and a focus on higher
margin, quality carpets. Wool carpet sales increased 5% to $37.2m despite the COVID-19 restrictions
in Australia and New Zealand, including the five-week lockdown in Auckland which impacted
Bremworth’s manufacturing capacity. While difficult to accurately assess, there is no doubt that
1H22 sales would have been stronger without the impact of COVID-19 on both manufacturing and
retailers, particularly in Q1.

Pleasingly, gross margin increased to 31%, driven by improved sales prices and product mix across all
markets, as well as operational efficiencies and disciplined cost and price management. A material
reduction in distribution and administration expenses supported a $1.3m decrease in operating
expenses compared to 1H21.

Elco Direct, Bremworth’s wool buying business, delivered a stronger year on year result with a $2.7m
revenue increase and an uplift in average selling price, as it benefitted from growing demand for
quality strong wool.

Group revenue for the six months was $48.7m, with EBITDA of $2.5m. Bremworth’s cash balance
remains strong, with cash of $18.5m as at 31 December 2021.

On a comparative basis, the prior comparative half year (1H21) normalised NPAT result included a
one-off benefit from the exit from the synthetic carpet market, with $16.0m in sales of synthetic
carpets as the company sold down its inventory. Wage subsidies brought forward from FY20, and a
release of inventory provisions also benefitted the prior comparative period.

Improvements in working capital disciplines are now embedded and Bremworth has a healthy
inventory position, with 80% of stock aged less than six months.

The company is investing for the future, with more than half of 1H22 capex spent on plant
improvements to enable higher output in response to anticipated future demand.

Strategic progress

Strategic initiatives undertaken in the last 12 months are now starting to bear fruit:

 Brand awareness and positive brand associations have increased, driving strong demand and
increasing sales of Bremworth’s premium wool carpet and rugs, which now comprise 76% of its
total revenue
 Operational efficiency in Bremworth’s yarn plants continues to be a focus as the company scales
up manufacturing and recruits more people to increase capacity
 Focus on digital is starting to bear fruit, with strong double-digit growth in direct-to-consumer
online rug sales and continued expansion of audience reach through online and social media
channels
 New products, distribution channels and partnerships are a key focus to create and build
important revenue pipelines
 Sustainability is a key pillar in the transformation journey with some big projects due to kick off
in Q4 which further support the Bremworth purpose, to find a more sustainable way.

Outlook

Positive market and economic trends are expected to support continued demand and sales growth
of Bremworth’s wool carpets and rugs, with a robust pipeline for new consents for residential
building and renovations, and consumers switching to more natural products that create less waste
and environmental impact.

Disruption from Omicron is expected to escalate in Q3 and then diminish towards end of 2H22, and
no future lockdowns are anticipated. Bremworth has undertaken extensive planning to ensure
business continuity and keep its workforce safe during this time. Inflationary pressure is also
expected to rise across the board. A priority focus will be to rebuild sales in Australia as supply chain
constraints ease.

The focus will remain on strategic priorities, with the upcoming launch of a new marketing campaign
expected to further stoke consumer demand, and a ramp up planned for Bremworth’s digital
strategy following the recent appointment of international digital brand agency, Red Antler. A
number of partnerships supporting Bremworth’s innovation and sustainability goals are expected to
be announced in the coming months.

The Board is confident in Bremworth’s strategic progress and, subject to the impact of Omicron,
positive revenue growth and margin trends are expected to be maintained in 2H22 and into FY23.

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

---

2

FY20 –FY21
Transformation
Investment
•Strong capital base to fund
transformation
•Relaunch of Bremworth brand
and marketing
•Right-sized organisation
•Set forth on our sustainability
journey
•Exited synthetics
•Redefined as a premium design
and natural fibre company
FY22 –FY23
Future Focused
Profitable Growth
•Full benefits of transformation
strategy
•Partnerships and product
adjacencies
•Return to dividends
FY24 –ONWARDS
Re-Build
Investment
•Appointment of new CEO
•Clear, purpose led strategy
•Capitalise on consumer and
macro trends
•Build the brand
•Optimise the retailer network
•Measure and drive sustainability
goals
•Return to profitable growth in
FY23
Bremworth 1H22 Results Presentation
3

1.Create demand for Bremworth branded product
2.Optimise operational efficiency and commercial
excellence
3.Super charge our digital strategy
4.Prioritise innovation, sustainability and partnerships
Bremworth 1H22 Results Presentation
Priorities for FY22
4

•New leadership under Greg Smith as CEO
•Fully exited from synthetics market
•Growing consumer demand for Bremworth brand and natural products driving sales of
premium, New Zealand made wool carpets and rugs
•Supply chain and COVID-19 disruptions impacting supply
•Operational efficiency continues to be a focus with benefits being realised
•Focus on digital starting to bear fruit –increased DTC online rug sales; uplift in audience reach
•New products, distribution channels and partnerships are a key focus to build new revenue
pipelines
•Moving ahead with sustainability journey
•Strong cash position as execution of strategy progresses
1H22 strategic progress
Bremworth 1H22 Results Presentation
5

•Growing demand from consumers for more natural, NZ made, high quality products in their
lives
•Increase in wool carpet sales revenue –replacing sales of low value, low margin
synthetic/plastic carpets
•Increase in average selling price across all markets, illustrating ‘brand heat’
•Uplift in margin from better product mix and more sales of premium wool carpet and rugs
•Improved quality of inventory
•New natural positioning highly desirable for target audiences
•Voted New Zealand’s most trusted carpet brand for eight years*
All wool strategy delivering early value
Bremworth 1H22 Results Presentation
6
*Reader’s Digest Most Trusted Brand Awards 2014-2021

Bremworth 1H22 Results Presentation
1H22 Financial Snapshot
$ millions (unaudited)
Revenue
Gross margin
Gross margin %
EBITDA
Non-trading adjustments*
Normalised EBITDA
Net Profit/(Loss) After Tax
Normalised NPAT/(NLAT)
Net Debt/Cash
1H22
48.7
15.2
31.2%
2.5
-
2.5
1.0
0.9
18.5
1H21
60.3
18.0
29.9%
5.7
(1.4)
4.3
3.8
1.8
26.3
*1H21 non-trading adjustments of $1.4m comprise net gain on sale and
leaseback of property of $2.5m and restructuring costs of $(1.1)m.
•Results reflect pivot to all wool and exit from synthetic carpet
market
•Reduction in total revenue and normalised EBITDA primarily due
to exit from low margin synthetic/plastic carpet market in FY21
•Strong recovery in Q2 as COVID-19 restrictions eased
•Margin benefit from increased premium wool carpet and rug
sales
•Strong result from ElcoDirect (wool buying business)
•Material improvement in distribution and administration
expenses
•Strong cash position, continue to invest in pivot to all wool
strategy
7

60.3
48.7
3.1
(1.3)
(15.9)
2.7
(0.2)
-
10
20
30
40
50
60
Source: Management information
Total 1H22 revenue of $48.7m
•Strategic shift in product mix to all wool
•$(15.9)m reduction due to the exit from low margin
synthetic/plastic carpet market, with the one-off
sell-down making up 26% of 1H21 sales
•$1.8m increase in wool carpet sales despite COVID
disruptions in all markets
•Expect positive demand trend to continue into 2H22
•ElcoDirect: $2.7m increase in revenue , with uplift in
average selling price as demand for quality strong
wool grows
Revenue reflects strategic transformation
Bremworth 1H22 Results Presentation
8
Revenue bridge ($m) 1H21 to 1H22
$ millions
1H21Non-wool
carpet
Wool carpet
NZ
Wool carpet
Aus
Wool fibreOther1H22

Bremworth 1H22 Results Presentation
Growing wool carpet sales
•5% increase in wool carpet revenue, despite reduced volume due
to COVID-19 lockdowns and restrictions in NZ and Australia, and
supply chain disruption
•Impact mainly felt in Q1 and early Q2
•Strong recovery in Q2
•Wool carpet sales made up 76% of 1H22 revenue, compared to
58% in 1H21
•1H22 sales would have been stronger without the impact of
COVID-19 on both manufacturing and retailers, particularly in Q1
•Positive growth in New Zealand; COVID-19 and supply chain
headwinds impacting Australian sales expected to reverse later in
the second half
9
1H22 Wool Carpet Sales Volume
(Lineal Metres)
COVID-19
impact
Q1Q2

Uplift in gross margin to 31%, up from 29% in 1H21
•Benefit of improved sales mix and operational efficiencies
•Strong wool carpet margin increases across all markets due to growing
demand for higher end, higher margin, differentiated products
•Disciplined cost and price management
•Operating costs reduced by $1.3m vs1H21
Bremworth 1H22 Results Presentation
Uplift in Margin
10

Bremworth 1H22 Results Presentation
Earnings and profit in line with management expectations as
Bremworth invests in all wool strategy
$ millions (unaudited)
EBITDA
Non-trading adjustments*
Normalised EBITDA
Net Profit After Tax
Normalised NPAT
1H22
2.5
-
2.5
1.0
0.9
1H21
5.7
(1.4)
4.3
3.8
1.8
*1H21 non-trading adjustments of $1.4m comprise net gain on sale and
leaseback of property of $2.5m and restructuring costs of $(1.1)m.
•Reduction in EBITDA and normalised EBITDA primarily as a
result of exit from low margin synthetic/plastic carpet market
•Disciplined cost and price management; inflationary pressure
being seen from Q2 and expected to continue
•Operating costs reduced by $1.3m vs 1H21
•Strong uplift in profit for ElcoDirect, from loss in 1H21
•Profit of $1.1m in line with expectations, with stronger wool
carpet sales
11

Cash position remains strong and in line with
expectations
•Cash $18.3m as at 31 December 2021
•Cash balance remains strong
•Improvements in working capital disciplines now embedded
•Healthy inventory position with more than 80% of stock aged less than 6
months
•Over 50% of YTD capex invested in plant improvements to enable higher
output in response to anticipated future demand
•Prudent capital management remains a priority; no interim dividend declared
•Strong financial platform with financial resources to undertake strategic
transformation.
Bremworth 1H22 Results Presentation
Financial Position
12

Bremworth 1H22 Results Presentation
On track with pivot to all wool strategy
•FY22 is the year we start to rebuild
the business for the future
•Clear growth strategy
•On track with strategy despite
COVID-19 disruptions
•Enormous runway to take market
share from synthetics sector
•Increasing capacity for
manufacturing growth
•Expert team
•Financial resources in place to
support strategic initiatives
14

Bremworth 1H22 Results Presentation
Mix of positive market trends alongside COVID-19
disruption and economic headwinds in 2H22
•Positive consumer and economic
trends supporting demand and
sales growth
-robust pipeline for new consents for residential
building and renovation
-consumers switching to more natural products in
their lives that create less waste and
environmental impact.
•Disruption from Omicron expected
to ease towards end of 2H22
•Expect more inflationary pressure –
wage and salary inflation, freight,
raw material cost inputs
15

Bremworth 1H22 Results Presentation
Growth outlook for 2H22
•Continued focus on execution of
strategic priorities
•Continued marketing initiatives in Q3
will stoke further demand
•Focus on rebuilding sales in Australia
as supply chain constraints ease
•Digital strategy to ramp up, with
recent appointment of international
digital brand agency, Red Antler
•A number of partnerships that
support Bremworth’sinnovation
and sustainability goals to be
announced in the coming months
•Subject to the impact of Omicron,
positive revenue growth and margin
trends expected to be maintained in
2H22
16

Disclaimer
•This presentation has been prepared by Bremworth Limited (“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
https://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.
1
8

---

CONTENTS



FY22 First Half at a Glance 1

Financial Summary 2

Half Year Review – Chair and CEO Commentary 3

Condensed Consolidated Statement of Profit or Loss 6

Condensed Consolidated Statement of Comprehensive Income 7

Condensed Consolidated Statement of Changes in Equity 8

Condensed Consolidated Statement of Financial Position 10

Condensed Consolidated Statement of Cash Flows 11

Notes to the Financial Statements 13

Disclosure of Non-GAAP Financial Information 23

Corporate Directory 26

1


Bremworth Limited and subsidiary companies

FY22 First Half (1H22) at a Glance


• First six months of operation under new all wool and natural fibres strategy

• Solid result in line with management expectations, despite COVID-19 disruptions and supply chain
congestion

• Positive growth in wool carpet sales and margin

• Good progress being made on strategic initiatives:

o Brand awareness and positive brand associations have increased, driving strong demand and
increasing sales of Bremworth’s premium wool carpet and rugs, which now comprise 76% of its
total revenue
o Operational efficiency in Bremworth’s yarn plants continues to be a focus as the company
scales up manufacturing and recruits more people to increase capacity
o Focus on digital is starting to bear fruit, with strong double-digit growth in direct-to-consumer
online rug sales and continued expansion of audience reach through online and social media
channels
o New products, distribution channels and partnerships are a key focus to create and build
important revenue pipelines
o Moving ahead with sustainability journey, with a number of partnerships supporting
Bremworth’s innovation and sustainability goals expected to be announced in the coming
months.

• Strong result from Elco Direct, Bremworth’s wool buying business

• Building for the future, with investment into manufacturing plant improvements to enable higher
output in response to anticipated future demand

• Positive market and economic trends are expected to support continued demand and sales growth of
Bremworth’s wool carpets and rugs

• The Board is confident in Bremworth’s strategic progress and, subject to the impact of Omicron,
positive revenue growth and margin trends are expected to be maintained in 2H22 and into FY23.

2


Bremworth Limited and subsidiary companies

Financial Summary - for the six months ended 31 December 2021 (Unaudited)

Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
Audited
Year
ended
30 June 2021
$000 $000 $000

Operating revenue $48,720 $60,299 $111,577

EBITDA (normalised)
1
2,468 4,279 3,385

Depreciation – owned assets (355) (278) (379)
Depreciation – right-of-use assets (441) (65) (534)
Depreciation – recycled through inventory 65 (858) (764)

EBIT (normalised)
1
1,737 3,078 1,708

Finance costs (519) (543) (1,124)
Finance income 73 3 68

Profit before income tax (normalised)
1
1,291 2,538 652

Income tax expense (388) (737) (276)

Profit after tax (normalised)
1
903 1,801 376

Abnormal net gain after tax
1
98 1,986 1,353

Profit after tax (GAAP) $1,001 $3,787 $1,729

Net cash flow from operating activities $(1,380) $17,545 $16,216

Basic earnings per share (cents)
Normalised
1
1.31 2.62 0.55
GAAP 1.45 5.51 2.52

Diluted earnings per share (cents)
Normalised
1
1.28 2.62 0.54
GAAP 1.42 5.51 2.50

Return on average shareholders’ equity (%)
Normalised
1
2.5% 5.0% 1.1%
GAAP 2.8% 10.6% 5.0%

Unaudited
As at
31 December
2021
Unaudited
As at
31 December
2020
Audited
As at
30 June 2021

Net tangible asset backing per share ($) $0.38 $0.39 $0.36


Equity to total assets (%) 48.8% 47.3% 45.6%



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 23 to 25 of the half year report.

3


Bremworth Limited and subsidiary companies

Half Year Review

Chair and CEO Commentary

Dear Shareholder

We are pleased to present the Bremworth Limited Half Year Report for the six months ended 31 December 2021.

The highlight of the period was the growing demand for Bremworth’s premium, New Zealand made wool carpet
and rugs as we continue to progress our purpose led, wool and natural fibres strategy.

Our long term all wool strategy is on track and we are making excellent progress across our FY22 priorities.

Despite the challenging conditions and supply chain headwinds, our team has delivered a solid result.

Consumer sentiment is changing, and we have an enormous market opportunity to shift consumers from
synthetic/plastic carpets to beautiful, natural, New Zealand made wool carpets. There is strong demand in both
New Zealand and Australia, and we are investing in our business to expand our capacity. FY22 is the year we have
started to rebuild the new Bremworth, a business for the future, and while there is much still to do, we are
confident in our strategy and excited about our plans.


Financial Results

The 1H22 result reflects Bremworth’s transition to the new all wool strategy and a focus on higher margin, quality
carpets. Wool carpet sales increased 5% to $37.2m despite the COVID-19 restrictions in Australia and New
Zealand, including the five-week lockdown in Auckland which impacted Bremworth’s manufacturing capacity.
While difficult to accurately assess, there is no doubt that 1H22 sales would have been stronger without the
impact of COVID-19 on both manufacturing and retailers, particularly in Q1.

Pleasingly, despite lower volumes, gross margin increased to 31%, driven by improved sales prices and product
mix across all markets, as well as operational efficiencies and disciplined cost and price management. A material
reduction in distribution and administration expenses supported a $1.3m decrease in operating expenses
compared to 1H21.

Elco Direct, Bremworth’s wool buying business, delivered a stronger year on year result with a $2.7m revenue
increase and an uplift in average selling price, as it benefitted from growing demand for quality strong wool.

Group revenue for the six months was $48.7m, with EBITDA of $2.5m.

4


Bremworth Limited and subsidiary companies

Half Year Review (continued)

Chair and CEO Commentary (continued)



Bremworth’s cash balance remains strong, with cash of $18.5m as at 31 December 2021.

Bremworth’s reported net profit after tax of $1.0m was in line with the company’s expectations, despite COVID-
19 disruptions (particularly in the first quarter of the financial year) and supply chain congestion. A strong
recovery was seen later in the second quarter, with positive demand trends expected to continue into 2H22.

On a comparative basis, the prior comparative half year (1H21) normalised NPAT result included a one-off benefit
from the exit from the synthetic carpet market, with $16.0m in sales of synthetic carpets as the company sold
down its inventory. Wage subsidies brought forward from FY20 and a release of inventory provisions also
benefitted the prior comparative period.

Improvements in working capital disciplines are now embedded and Bremworth has a healthy inventory position,
with 80% of stock aged less than six months.

The company is investing for the future, with more than half of 1H22 capex spent on manufacturing plant
improvements to enable higher output in response to anticipated future demand.

Strategic progress

Strategic initiatives undertaken in the last 12 months are now starting to bear fruit:

• Brand awareness and positive brand associations have increased, driving strong demand and increasing
sales of Bremworth’s premium wool carpet and rugs, which now comprise 76% of its total revenue
• Operational efficiency in Bremworth’s yarn plants continues to be a focus as we scale up manufacturing
and recruit more people to increase capacity
• Focus on digital is starting to bear fruit, with strong double-digit growth in direct-to-consumer online rug
sales and continued expansion of audience reach through online and social media channels
• New products, distribution channels and partnerships are a key focus to create and build important
revenue pipelines
• Sustainability is a key pillar in the transformation journey with some big projects due to kick off in Q4
which further support the Bremworth purpose, to find a more sustainable way.

5


Bremworth Limited and subsidiary companies

Half Year Review (continued)

Chair and CEO Commentary (continued)



Outlook

Positive market and economic trends are expected to support continued demand and sales growth of
Bremworth’s wool carpets and rugs, with a robust pipeline for new consents for residential building and
renovations, and consumers switching to all natural products that create less waste and environmental impact.

Disruption from Omicron is expected to escalate in Q3 and then diminish towards end of 2H22, and no future
lockdowns are anticipated. We have undertaken extensive planning to ensure business continuity and keep our
workforce safe during this time. Inflationary pressure is also expected to rise across the board. A priority focus will
be to rebuild sales in Australia as supply chain constraints ease.

The focus will remain on strategic priorities, with the upcoming launch of a new marketing campaign expected to
further stoke consumer demand, and a ramp up planned for Bremworth’s digital strategy following the recent
appointment of international digital brand agency, Red Antler. A number of partnerships supporting our
innovation and sustainability goals are expected to be announced in the coming months.

The Board is confident in Bremworth’s strategic progress and, subject to the impact of Omicron, positive revenue
growth and margin trends are expected to be maintained in 2H22 and into FY23.

Thank you for your continued support.


For and on behalf of the Board of Directors:






George Adams
Chairman





Greg Smith
Chief Executive Officer

25 February 2022

6


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Profit or Loss


Six months ended 31 December 2021 (Unaudited)

Note Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000


Revenue from contracts with customers 5 48,720 60,299
Cost of sales (33,537) (42,268)

Gross profit 15,183 18,031

Other income and gains 6 245 2,531
Distribution expenses (8,114) (10,248)
Administration expenses (5,472) (4,725)
Restructuring costs (105) (1,117)

1,737 4,472

Finance costs 7 (519) (543)
Finance income 73 3

Profit before income tax 1,291 3,932

Income tax expense (290) (145)

Profit after tax for the period $1,001 $3,787

Basic earnings per share (cents) 3 1.45 5.51

Diluted earnings per share (cents) 3 1.42 5.51
























This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual
financial statements.

7


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Comprehensive Income


Six months ended 31 December 2021 (Unaudited)

Note Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000


Profit after tax for the period 1,001 3,787

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

Effective portion of changes in fair value of cash flow hedges 44 503
Net change in fair value of cash flow hedges transferred to profit
or loss



(46)

(105)
Income tax on changes in fair value of cash flow hedges - (47)
Total other comprehensive income (2) 351

Total comprehensive income for the period $999 $4,138




































This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual
financial statements.

8


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity


Six months ended 31 December 2021 (Unaudited) Note Share
Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Retained
Earnings
Total Equity
$000 $000 $000 $000 $000 $000

Total equity at 1 July 2021 21,846 55 (1,420) 51 15,060 35,592

Total comprehensive income for the period

Profit after tax - - - - 1,001 1,001

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

Changes in fair value of cash flow hedges (net of income tax) - (2) - - - (2)

Total comprehensive income for the period - (2) - - 1,001 999

Transactions with owners in their capacity as owners
Issue of shares to employees 9 208 - - - - 208
Share-based payments – value of employee services 9 - - - 254 - 254

Total equity at 31 December 2021 $22,054 $53 $(1,420) $305 $16,061 $37,053











This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual financial statements.

9


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity (continued)


Six months ended 31 December 2020 (Unaudited) Note Share
Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Retained
Earnings
Total Equity
$000 $000 $000 $000 $000 $000

Total equity at 1 July 2020 21,846 (120) (1,420) - 13,331 33,637

Total comprehensive income for the period

Profit after tax - - - - 3,787 3,787

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

Changes in fair value of cash flow hedges (net of income tax) - 351 - - - 351

Total comprehensive income for the period - 351 - - 3,787 4,138

Transactions with owners in their capacity as owners
Share-based payments – value of employee services 9 - - - 5 - 5

Total equity at 31 December 2020 $21,846 $231 $(1,420) $5 $17,118 $37,780












This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual financial statements.

10


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Financial Position


As at 31 December 2021 (Unaudited)
Note Unaudited
31 December
2021
Audited
30 June 2021
$000 $000

ASSETS

Property, plant and equipment - owned 13,319 12,094
Property, plant and equipment – right-of-use 9,763 9,968
Deferred tax asset 745 732

Total non-current assets 23,827 22,794

Cash and bank 8 18,513 22,508
Trade receivables, other receivables and prepayments 12,220 12,520
Inventories 11 21,036 20,035
Derivative financial instruments 125 109
Advance to employees 9 151 -
Income tax receivable - 57

Total current assets 52,045 55,229

Total assets $75,872 $78,023

EQUITY

Share capital 22,054 21,846
Cash flow hedging reserve 53 55
Foreign currency translation reserve (1,420) (1,420)
Share-based payment reserve 9 305 51
Retained earnings 16,061 15,060

Total equity 37,053 35,592

LIABILITIES

Lease liabilities 18,771 19,530
Employee benefits 776 776
Provisions 672 672

Total non-current liabilities 20,219 20,978

Trade payables and accruals 9,881 13,064
Employee benefits 40 136
Employee entitlements 5,534 5,203
Lease liabilities 1,987 2,003
Provisions 662 662
Derivative financial instruments 14 34
Deferred income 401 351
Income tax payable 81 -

Total current liabilities 18,600 21,453

Total liabilities 38,819 42,431

Total equity and liabilities $75,872 $78,023

This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual
financial statements.

11


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Cash Flows


Six months ended 31 December 2021 (Unaudited)

Note Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 49,226 64,071
Cash paid to suppliers and employees (49,933) (46,125)
Government grants received 107 -
Other receipts 3 3
GST paid (140) (67)
Interest paid – loans and borrowings (18) (491)
Interest component of lease payments (501) (118)
Interest received 41 -
Income tax paid (165) (213)

Net cash flow from operating activities (1,380) 17,060


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant and equipment 7 18
Proceeds from sale of property - 25,023
Acquisition of plant and equipment (1,586) (618)
Short term deposits 10,000 (10,000)
Advance to employees (208) -

Net cash flow from investing activities 8,213 14,423


CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans and borrowings - (15,800)
Principal component of lease payments (1,011) (690)
Issue of shares to employees 208 -

Net cash flow from financing activities (803) (16,490)


NET INCREASE IN CASH AND CASH EQUIVALENTS 6,030 14,993

Cash and cash equivalents at beginning of the period 10,508 1,276

Effect of exchange rate changes on cash (25) (6)

CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD



$16,513

$16,263










This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual
financial statements.

12


Bremworth 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 2021 (Unaudited)

Note Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000

Profit after tax for the period 1,001 3,787

Add/(Deduct) non-cash items:
Depreciation – owned assets 355 1,136
Depreciation – right-of-use assets 441 65
Share-based payments – value of employee services 254 5
Deferred tax (13) 104
Net gain on sale of property, plant and equipment (1) (2,528)
Net loss on foreign currency balance 25 6

Changes in working capital items:
Trade and other receivables and prepayments 355 4,232
Inventories (1,001) 7,543
Income tax receivable/payable 138 (172)
Trade payables and accruals (3,183) 2,302
Employee benefits and entitlements 235 786
Provisions - 200
Deferred income 50 -
Derivative financial instruments (36) (406)

Net cash flow from operating activities $(1,380) $17,060























This statement is to be read in conjunction with the Notes on pages 13 to 22 and the previous year’s annual
financial statements.

13


Bremworth Limited and subsidiary companies

Notes to the Financial Statements
For the six months ended 31 December 2021

1. General information

Reporting entity

Bremworth Limited (“Bremworth” 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 Bremworth and its subsidiaries (“the Group”) as at, and for the six months ended, 31
December 2021.

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 wool acquisition, and woollen carpet and rug manufacturing
and sales.

All Group subsidiaries are wholly-owned.

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
2020, are unaudited. The comparative information as at 30 June 2021 is audited.

The interim financial statements were approved for issue by the Board of Directors (“Board”) of the
Company on 25 February 2022.

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
2021.

Going concern

The Group expects to be able to realise its assets and meet its financial obligations in the normal course of
business and prepares its interim financial statements on a going concern basis.

14


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

1. General information (continued)

Accounting policies

The interim financial statements should be read in conjunction with the annual financial statements for the
year ended 30 June 2021 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.

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 changed its accounting policy in relation to
the treatment of costs incurred in configuring or customising certain suppliers’ application software in
certain cloud computing arrangements in its annual financial statements for the year ended 30 June 2021.

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 Group has, in preparing its interim financial statements for the six months ended 31 December 2021,
restated the interim financial statements for the six months ended 31 December 2020 to reflect the impact
of this change in accounting policy on the prior year interim financial statements – with the change involving
a charge of $485,000 to administration expenses in the Condensed Consolidated Statement of Profit or
Loss instead of a capitalisation of that amount to fixed assets.

2. COVID-19

On 17 August 2021, in response to a potential outbreak of the COVID-19 Delta variant of the virus, the New
Zealand Government imposed Level 4 lockdown throughout the country effective from 11.59 pm that same
day. Under Level 4 lockdown, all workplaces in New Zealand are required to close unless the workplace is
deemed to be essential. As a consequence, all of the Group's carpet yarn making facilities in Napier and
Whanganui had to cease operations during the duration of the Level 4 lockdown from 18 August 2021
through to 31 August 2021, while its carpet manufacturing operation in Auckland was not able to
recommence operation until 22 September 2021.

Notwithstanding the ability to return to work, protocols that were in place to keep our people safe - such as
separations of our shifts to keep our people apart and bubbles in the workplace - affected plant efficiency
and operating levels and impacted manufacturing capacity.

As a consequence of the Level 4 lockdown and the loss in revenue, the Group was eligible to apply for the
New Zealand Government's COVID-19 wage subsidy. The Group received, for the duration of the
lockdown, $1,488,000 under the wage subsidy scheme. $1,008,000 was recognised in cost of sales,
$81,000 in distribution expenses and $102,000 in administration expenses in the Condensed Consolidated
Statement of Profit or Loss – with the balance of $297,000 carried forward in inventory at balance date.

The Group was also eligible for the New Zealand Government's COVID-19 Resurgence Support Payment
and applied for, and received, a further $87,000 under that scheme. In addition, the Group’s Australian
operation also applied for and received $121,000 under the New South Wales Government’s COVID-19
JobSaver scheme. Both these amounts were recognised in administration expenses in the Consolidated
Statement of Profit or Loss

The Group has considered the impact of COVID-19 in general, and the impact of recent developments, in
forecasting the Group’s projected cashflows for the purposes of assessing liquidity. The Group has
concluded that COVID-19 generally is unlikely to materially impact the Group’s ongoing liquidity adversely.

15


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

3. Earnings per share

Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000

Basic earnings per share (Basic EPS)

Profit after tax ($000) $1,001 $3,787

Weighted average number of ordinary shares outstanding 68,986,163 68,679,098

Basic EPS (cents) 1.45 5.51

Diluted earnings per share (Diluted EPS)

Profit after tax ($000) $1,001 $3,787

Weighted average number of ordinary shares outstanding 70,352,340 68,789,955

Diluted EPS (cents) 1.42 5.51

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 and the Company’s share
option scheme as further discussed at note 8 (Share-based payment arrangements).

16


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

4. Segment performance

Unaudited Carpet sales and
manufacturing
Wool acquisition Total

Six months
ended
31 December
2021
Six months
ended
31 December
2020
Six months
ended
31 December
2021
Six months
ended
31 December
2020
Six months
ended
31 December
2021
Six months
ended
31 December
2020
$000 $000 $000 $000 $000 $000
External revenue 39,989 54,322 8,731 5,977 48,720 60,299
Inter-segment revenue - - 1,520 973 1,520 973
Total revenue $39,989 $54,322 $10,251 $6,950 50,240 61,272

Elimination of inter-segment revenue (1,520) (973)
Consolidated revenue $48,720 $60,299

Segment result before depreciation 2,596 5,477 529 (52) 3,125 5,425
Depreciation – owned assets (276) (204) (79) (74) (355) (278)
Depreciation - right-of-use assets (383) - (58) (65) (441) (65)
Depreciation – recycled through
inventory

65

(858)

-

-

65

(858)
Segment result before gain on sale
and leaseback of property and
restructuring and transformation
costs



2,002



3,930



392



(191)



2,394



3,739
Gain on sale and leaseback of
property

-

2,511

-

-

-

2,511
Restructuring and transformation
costs

(105)

(1,117)

-

-

(105)

(1,117)
Segment result after gain on sale of
property and restructuring and
transformation costs


1,897


5,324


392


(191)


2,289


5,133


Elimination of inter-segment profits (7) 10
Unallocated corporate costs (545) (671)
Result from operating activities 1,737 4,472

Finance costs (519) (543)
Finance income 73 3
Profit/(Loss) before tax 1,291 3,932

Tax (expense)/credit (290) (145)
Profit/(Loss) after tax for the period $1,001 $3,787


Carpet sales and
manufacturing
Wool acquisition Total

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000 $000 $000 $000 $000
Reportable segment assets 53,086 67,474 4,273 2,507 57,359 55,515
Unallocated assets 18,513 22,508
Total assets $75,872 $78,023

Reportable segment liabilities 17,228 19,363 833 1,181 18,061 20,898
Unallocated liabilities 20,758 21,533
Total liabilities $38,819 $42,431

17


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

4. Segment performance (continued)

The Group’s reportable and operating segments are:
 carpet sales and manufacturing; and
 wool acquisition.

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
2021
Unaudited
Six months
ended
31 December
2020
$000 $000
Revenue
New Zealand 25,808 35,511
Australia 20,074 23,413
Rest of the world 2,838 1,375

Total revenue $48,720 $60,299

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000
Non-current assets
New Zealand 22,882 22,154
Australia 945 640

Total non-current assets $23,827 $22,794

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.

18


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

5. Revenue from contracts with customers

Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000
Sales of goods
Carpet 39,215 53,948
Wool fibre 8,731 5,977
Carpet yarn 349 217
48,295 60,142
Provision of installation services 425 157
Total revenue $48,720 $60,299

6. Other income and gains

Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000
Rentals received 2 2
Dividends received 1 1
Government grants recognised 241 -
Net gain on sale of plant and equipment 1 17
Net gain on sale and leaseback of property - 2,511
Total other income and gains $245 $2,531


7. Finance costs

Unaudited
Six months
ended
31 December
2021
Unaudited
Six months
ended
31 December
2020
$000 $000
Interest expense – loans and borrowings 18 425
Interest component of lease payments 501 118
Finance costs $519 $543

8. Cash and bank

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000
Cash and cash equivalent 16,513 10,508
Short-term deposits 2,000 12,000
$18,513 $22,508

19


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

9. Share-based payment arrangements

Description of share-based payment arrangements

The Board approved the establishment of the Bremworth Equity Ownership Plan (Equity Plan) and the
Bremworth Share Option Scheme (Option Scheme) on 27 August 2021.

The Equity Plan and the Option Scheme are designed to incentivise certain employees and align their
interests with the Company's shareholders by providing them with equity interests in the Company.

The Equity Plan provides for eligible employees to be issued shares in the Company on terms
determined by the Board and as set out in the rules of the Equity Plan and includes the provision of a full-
recourse loan by the Company to those eligible employees to fund the amount payable for the shares
issued to them.

The Option Scheme provides for selected employees to be awarded options to acquire ordinary shares at
a fixed price, with the options becoming exercisable over time in accordance with a vesting schedule or
on certain liquidity events as defined in the rules of the Option Scheme.

Pursuant to the terms of employment of the CEO, the Company agreed to grant a total of 1,000,000
options to the CEO on the date of his appointment and to issue the CEO with 500,000 ordinary shares
pursuant to the terms of the Equity Plan, with the consideration for the shares of $208,050 funded by way
of an interest-free full-recourse loan provided by the Company.

In order to fulfil its obligations and remain within the delegated authority granted to the Board by the
constitution, the Board agreed to issue the 1,000,000 options in two tranches.

Tranche 1 – On the 10 September 2021, the Company issued 480,000 options under the Option Scheme
while also issuing the 500,000 ordinary shares pursuant to the terms of the Equity Plan to the CEO as
discussed earlier.

Tranche 2 – The balance of the 1,000,000 options, being 520,000 options under the Option Scheme, will
be made to the CEO subsequent to 31 December 2021, with that date yet to be determined by the Board.
The terms and conditions of these options will be identical to those applying to the original 480,000
options granted in September 2021.

The Board also approved on 18 December 2020 the establishment of a long-term incentive scheme (LTI
Scheme) for executive employees pursuant to which the Company will issue performance rights (“Rights”)
to the participants which would entitle the participants to be issued shares in the Company, subject to
service and performance conditions being met, at the end of the stipulated performance period.

No Rights were issued pursuant to the LTI Scheme during the six months ended 31 December 2021.

The Company has determined that the shares issued under the Equity Plan, the options issued under the
Option Scheme and the Rights issued under the LTI Scheme to be equity-settled share-based payment
arrangements pursuant to NZ IFRS 2 Share-based Payment, with the participants not able to request
payment in cash.

20


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

9. Share-based payment arrangements (continued)

Measurement of fair value of options granted to the CEO under the Option Scheme

The fair value of the options at the grant date has been determined using a Monte Carlo simulation.

Specifically, the Monte Carlo simulation is used as follows:

 to predict the Company’s future share prices (a “market” condition” under NZ IFRS 2), gross of
dividends, using a random-walk process which is driven by assumptions regarding volatility and the
underlying drift rate from grant date through to vesting date

 to calculate the annualised total shareholder return (TSR) at the vesting date implied by the simulated
share price

 to determine the extent to which the calculated TSR exceeds the TSR set out in the vesting schedule

 to calculate the number of shares to be issued and the implied payoff to the CEO based on the
number of shares issued and the simulated share price at vesting date

The inputs used in the measurement of the fair value at grant date of the options are as follows.

 Share price at grant date - $0.78 per share, being the Bremworth closing share price on NZX on 7
September 2021

 Exercise price - $0.4161 per share, being the 20-day volume weighted average sale price of a
Bremworth share on NZX up to 23 June 2021 when the CEO was appointed

Treatment of options to be granted to the CEO under the Option Scheme

As mentioned earlier, pursuant to the terms of employment of the CEO, a grant of a further 520,000
options under the Option Scheme will be made to the CEO subsequent to balance date.

The Company has estimated the grant date fair value of these further options for the purpose of
recognising the services received during the period between the date of commencement of service of the
CEO and the grant date.

Once the grant date occurs subsequent to balance date, the Company will revise the earlier estimate so
that the amounts recognised for services received in respect of the grant of options are ultimately based
on the grant date fair value of the options.

Outstanding options

The only options outstanding at balance date are the 480,000 options granted to the CEO under the
Option Scheme during the six months ended 31 December 2021.

The maximum number of shares that will be issued in respect of these 480,000 options is 480,000, with
the options becoming exercisable over time in accordance with a vesting schedule or on certain liquidity
events as defined in the rules of the Option Scheme.

21


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

9. Share-based payment arrangements (continued)

Outstanding Rights

There are no changes to the outstanding Rights on issue during the six months ended 31 December
2021.

The number of shares that will be issued on condition date (being 1 May 2023) of the outstanding Rights
under the LTI Scheme is unknown at balance date.

The number of shares to be issued is dependent on the extent to which TSR exceeds 14% per annum
compounding over the performance period and the share price at condition date, except that the number
of shares issued to all participants will not, together with shares issued under NZX Listing Rule 4.6.1 over
the previous 12 months, exceed 3% of the total number of shares on issue at condition date.

The maximum number of shares that could be issued under the LTI Scheme at condition date is
1,071,394 (or 1.54% of the total number of shares on issue at balance date of 69,179,098).

Impact of share-based payment arrangements on the financial statements

The assessed fair value of the options and Rights at grant date, as well as the estimated grant date fair
value of options that are yet to be granted to the CEO (as discussed above), are recognised as an
expense in profit or loss over the period from date on which the participant started rendering service or
the grant date (whichever is the earlier), adjusted to reflect only those options and Rights where the
service condition will be met, with corresponding entries to the share-based-payment reserve within
equity.

The following were recognised in administration expenses in the Condensed Consolidated Statement of
Profit or Loss for the six months ended 31 December 2021:

 $7,291, being the proportion of fair value of the options granted to the CEO, and $5,779 being the
estimated fair value of the options to be granted to the CEO, for the period from commencement of
employment through to balance date;
 $191,950, being the difference between the $0.4161 issue price per share and the $0.80 market price
per share at issue date in respect of the 500,000 shares issued to the CEO in September 2021 under
the Equity Plan;
 $48,498, being the proportion of fair value of the Rights relating to the six month period to balance
date;

with a corresponding credit totalling $253,518 to the share-based payment reserve within equity (31
December 2020: $5,000).

Interest-free full recourse loan

The Company has accounted for the interest-free full recourse loan made by the Company to the CEO to
fund the $208,050 consideration for the shares issued under the Equity Plan at fair value of $148,351,
with the difference between fair value and face value of the loan to be recognised as an employee benefit
in administration expenses in the Condensed Consolidated Statement of Profit or Loss over the period of
service.

22


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

10. Capital commitments

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000
Outstanding commitments for purchase of plant and
equipment

$249

$1,016

11. Inventories

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000
Raw materials and consumables 6,253 5,922
Work in progress 373 1,200
Finished goods 14,410 12,913
$21,036 $20,035

Inventory provisioning $1,576 $1,976

During the six months ended 31 December 2021, provision in respect of inventories decreased by
$400,000 (six months ended 31 December 2020: $1,475,000), with the amount released to the statement
of profit or loss.

12. Contingencies

Unaudited
As at
31 December
2021
Audited
As at
30 June 2021
$000 $000
Indemnities in favour of Bank of New Zealand and National
Australia Bank (together, “the Bank”) in respect of Bank
guarantees relating to lease and other commitments


$2,405


$2,418

13. Related parties

Apart from directors’ fees, key management personnel remuneration (including bonuses) and the issue of
shares and options to the CEO referred to in note 8 Share-based payment arrangement, there have been
no other material transactions with the directors, key management personnel and their related parties or
with any other related parties during the period.

14. Subsequent events

There have been no events subsequent to 31 December 2021 which would materially affect the financial
statements.

23


Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information
For the six months ended 31 December 2021

The half year report for the six months ended 31 December 2021 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 and transformation 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 CEO 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 considered all 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 pages 24 and
25);
- 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’.

24


Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


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

Six months ended 31 December 2021

GAAP Adjustments Normalised
$000 $000 $000

Revenue $48,720 - $48,720

EBITDA 2,468 - 2,468

Depreciation - owned assets (355) - (355)
Depreciation – right-of-use assets (441) - (441)
Depreciation – recycled through inventory 65 65

EBIT

1,737 - 1,737

Finance costs (519) - (519)
Finance income 73 73

Profit before income tax 1,291 - 1,291

Income tax expense (290) (98) (388)

Profit after tax $1,001 (98) 903

Abnormal net gain after tax 98 98

Profit after tax (GAAP) - $1,001

Analysis of abnormal items

Before tax Tax effect After tax
$000 $000 $000
Normalisation of income tax expense - $98 $98

Calculation of basic and diluted earnings per share under GAAP and non-GAAP measures of profit after
tax

Six months ended 31 December 2021 GAAP-
compliant
reported
profit after
tax
Reverse
abnormal
items (net of
tax) where
applicable
Non-GAAP-
compliant
normalised
profit after
tax

Profit after tax ($000) $1,001 (98) $903

Weighted average number of ordinary shares (basic) 68,986,163 68,986,163
Basic earnings per ordinary share (cents) 1.45 1.31

Weighted average number of ordinary shares (diluted) 70,352,339 70,352,339
Diluted earnings per ordinary share (cents) 1.42 1.28

25

Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


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


Six months ended 31 December 2020

GAAP Adjustments Normalised
$000 $000 $000

Revenue $60,299 - $60,299

EBITDA 5,673 (1,394) 4,279

Depreciation - owned assets (278) - (278)
Depreciation – right-of-use assets (65) - (65)
Depreciation – recycled through inventory (858) - (858)

EBIT

4,472 (1,394) 3,078

Finance costs (543) - (543)
Finance income 3 3

Profit before income tax 3,932 (1,394) 2,538

Income tax expense (145) (592) (737)

Profit after tax $3,787 (1,986) 1,801

Abnormal net gain after tax 1,986 1,986

Profit after tax (GAAP) - $3,787

Analysis of abnormal items

Before tax Tax effect After tax
$000 $000 $000
Gain on sale and leaseback of property 2,511 - 2,511
Restructuring costs (1,117) - (1,117)
Normalisation of income tax expense - 592 592
$1,394 $592 $1,986

Calculation of basic and diluted earnings per share under GAAP and non-GAAP measures of profit after
tax

Six months ended 31 December 2020 GAAP-
compliant
reported
profit after
tax
Reverse
abnormal
items (net of
tax) where
applicable
Non-GAAP-
compliant
normalised
profit after
tax

Profit after tax ($000) $3,787 (1,986) $1,801

Weighted average number of ordinary shares (basic) 68,679,098 68,679,098
Basic earnings per ordinary share (cents) 5.51 2.62

Weighted average number of ordinary shares (diluted) 68,789,955 68,789,955
Diluted earnings per ordinary share (cents) 5.51 2.62

26


Bremworth Limited

Corporate Directory


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

Paul Izzard BA (Hons) Interior Design Member of Audit and Remuneration Committees
Independent

John Rae B.Com., LLB, CMInstD Member of Audit, Remuneration and Nomination
Independent Committees

Katherine Turner B.Com., CA, CMInstD Chairman of Audit Committee
Independent Member of Remuneration Committee

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

Director Emeritus:
Grant Biel B.E. (Mech.)

Chief Executive Officer:
Greg Smith

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:
PwC

Legal Advisors:
Russell McVeagh

Bankers:
Bank of New Zealand National Australia Bank Limited

Websites:
Corporate www.cavcorp.co.nz

Carpet Operation www.bremworth.co.nz, www.bremworth.com.au

Wool Operation www.elcodirect.co.nz

Share Registrar www.computershare.co.nz/investorcentre