Preliminary FY22 Audited Results Announcement

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 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$95,485 (14%)
Total Revenue $95,485 (14%)
Net profit/(loss) from
continuing operations
$2,240 30%
Total net profit/(loss) $2,240 30%
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
$0.40 $0.36
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
Greg Smith or Jackie Ellis
Contact phone number +64 21 711 622 or +64 27 246 2505
Contact email address
gregsmith@bremworth.co.nz
Jackie@ellisandco.co.nz
Date of release through MAP

29 August 2022

Audit financial statements accompany this announcement.

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MARKET RELEASE
29 August 2022

Bremworth announces FY22 results and continuing profit improvement

● Financial and strategic progress ahead of transformation plan
● EBITDA of $4.9m with 44% increase in normalised EBITDA
1

● Net Profit After Tax (NPAT) up 29% to $2.2 million, with 325% increase in normalised NPAT
1

● FY22 focus on structural improvements driving operational efficiencies and benefits
● Continued brand evolution with focus on premium residential consumer
● Growing demand for rugs
● Strong growth from Elco Direct wool buying business with increase in revenue and average sell
price
● Robust balance sheet providing a strong platform to continue executing the strategy

$millions (audited) FY22 FY21 % change
Total revenue 95.5 111.6 -14%
Wool carpet and rugs revenue 73.0 73.1 -
Gross margin % 31.1% 28.1% 11%
EBITDA 4.9 4.7 4%
EBITDA (Normalised)
1
4.9 3.4 44%
NPAT 2.2 1.7 29%
NPAT (Normalised)
1
1.7 0.4 325%

Carpet and rug manufacturer, Bremworth Limited (NZX: BRW) has today announced its audited results
for the 12 months ended 30 June 2022 (FY22), which has seen Bremworth emerge from a
“transformational” year with a 29% increase in NPAT to $2.2m and a continued commitment to grow
demand for New Zealand wool.
Consumer interest in wool carpet continues to grow and Bremworth remains a preferred brand.
Pleasingly, sales in New Zealand are growing strongly in response to advertising and brand campaigns,
while Australian sales reflect a strategic shift away from the high volume, low margin commercial
sector to allow the business to focus its capacity on producing and selling premium high value products
for the residential market. Revenues are expected to increase from FY23 as the transformation
programme gathers momentum and sales of higher margin, higher value woollen carpets increase.


1
EBITDA is earnings before interest, tax, depreciation and amortisation and is a non-GAAP measure. FY21 normalised
EBITDA and normalised NPAT excluded net gain on sale and leaseback of property of $2.6m and restructuring costs of
$(1.3)m whereas FY22 normalised NPAT includes a normalised tax charge of $0.5m.

A focus over FY22 on structural change to make the business more robust and efficient has helped to
deliver sustainable and profitable returns. Manufacturing improvements have increased efficiency and
provided capacity to bring new products to market. In addition, product SKUs have been reduced by
30% to simplify the product offer. The full benefits of these changes will become more apparent in
FY23.
The company’s digital strategy continues to take shape with online rug sales delivering strong growth
year-on-year. Website traffic also increased, up 60% year-on-year and the brand also saw double digit
growth in social media followers.
Sustainability
Sustainability remains a core focus for the company, and Bremworth has committed to two
decarbonisation projects.
The first initiative is a $2.5m project at the Napier carpet yarn spinning plant to reduce its reliance
on natural gas process heat through process heat optimisation and transitioning to electric high
temperature heat pump technology. This project is being 38% co-funded under various funding
programmes, including the GIDI (Government Investment in Decarbonising Industry) Fund
administered by the Energy Efficiency and Conservation Authority (EECA). This initiative is expected
to continue into FY23 and FY24.
The second decarbonisation initiative at the Whanganui carpet yarn spinning plant, which is also
being co-funded by EECA, will see a gas-fired dryer replaced with an alternative radio frequency
dryer for use in felted yarn production. This project is expected to cost $0.4m, with the EECA co-
funding agreed at 40%, and will run over FY23 and FY24.
These are in addition to Bremworth’s ongoing $4.9m research-based sustainability programme. Co-
funding of up to 40% has been received for this programme from the Ministry of Primary Industries.
In FY22, total manufacturing carbon emissions reduced by 5% vs FY21, and a digital twin model of
manufacturing has been developed to support sustainable manufacturing direction and decisions.
This modelling enables Bremworth to utilise technology to predict and reduce water and energy use
as well as waste.
The company has also launched its Rug Innovation Programme, which allows it to rapidly experiment
with, develop and test sustainable manufacturing and design options for rugs, with the long-term
aim of rolling successful initiatives out across its carpets. As part of this, Bremworth has recently
developed a fully compostable prototype rug that can be repurposed into other products or safely
returned to the earth at the end of its life.
Bremworth was honoured to win the Innovation and Collaboration Project Award at the recent
Primary Industries New Zealand Awards in recognition of its science-based and research-led
sustainability programme.

Financial Results
Results for the year were pleasing, particularly given the impact of COVID-19 in 1H22, and the
general economic slowdown and longer residential building timeline due to key material shortages
in 2H22. On a comparative basis, the prior year also included a one-off benefit from the sell down of
synthetic carpets as well as wage subsidies brought forward from FY20, and a release of inventory
provisions.
Total revenue for FY22 was $95.5m, down 14% on the prior year which benefitted from the sell down
of synthetic inventory. Wool carpet and rugs revenue of $73.0m was in line with the prior year, and
comprised 100% of Bremworth’s FY22 carpet and rug sales, compared to 79% in FY21. The flat year-
on-year sales were mainly due to the exit from the low value commercial sector in Australia in FY22.
Revenue from the wool buying business, Elco Direct, was up by 20% to $19.2m, with the average
selling price also increasing due to growing demand for quality, strong wool.
Operating expenses were down by 10% year-on-year as result of the cost-out programme, with the full
benefits partially offset by inflationary pressure on labour, material, and freight/shipping costs. Gross
margin improved on the prior year, supported by improved selling prices and product mix across all
markets, as well as operational efficiencies and disciplined cost and price management.
FY22 Normalised EBITDA was $4.9m, an increase of 44% on the prior year (excluding non-trading
adjustments in FY21).
The company reported a continuing improvement in net profit after tax, up from $1.7m to $2.2m in
FY22, with a strong 325% increase in normalised NPAT, up from $0.4m to $1.7m.
The cash position remains strong and was $14.9m at balance date, down from $22.5m as the company
continues to invest in its five-year transformation plan.
While tight control over working capital continues, operating cashflow of $(2.9)m reflects a significant
investment in woollen carpet inventory to support FY23 sales growth.
Capital expenditure totalled $2.9m in FY22, with almost 55% of that capital expenditure invested in
plant improvements to enable higher output and drive manufacturing efficiency.
After much deliberation, the Board has declared no dividend as the business needs to continue to
invest for the future.
Outlook
As previously advised as part of the five-year plan, the priorities for FY21 to FY23 are to reset the
business, commence the new strategy and navigate the economic recovery post-COVID.
The benefits of the structural changes implemented in FY22 are expected to start being seen in FY23
and the company remains focused on increasing sales and driving margin improvements.

Strong revenue growth is expected across Australasia as educated consumers begin to move away
from synthetic carpets which are essentially plastic, and move to more natural, high performing wool
alternatives. With wool estimated to represent approximately 15% of the carpet market, there is an
enormous opportunity to rebuild wool’s share.
Strong residential construction is expected to continue and Bremworth’s healthy inventory position
means it is well positioned to deliver highly desirable carpets and rugs for both new builds and existing
homes
Chair of Bremworth, George Adams, said: “The move by Bremworth to shift to 100% New Zealand
wool fibres has led a movement in the flooring industry towards natural materials. The structural
transformation undertaken in the last year is one of the essential planks of our strategy to profitably
grow our business. We are heading into the new financial year with a stronger operating platform,
continued consumer demand and a focus on driving sales of our beautiful Bremworth carpets and
rugs. We look forward to adding value for our shareholders, staff, and consumers.”
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

---

PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
To the shareholders of Bremworth Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Bremworth Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
position of the Group as at 30 June 2022, its financial performance and its cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
(NZ IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
the consolidated statement of financial position as at 30 June 2022;
the consolidated statement of profit or loss for the year then ended;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the he audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards)issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor we have no relationship with, or interests in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.

PwC
Description of the key audit matterHow our audit addressed the key audit matter
Forecast liquidity and cash flows
The Group prepares its consolidated financial
statements on a going concern basis and
expects to be able to realise its assets and
meet its financial obligations in the normal
course of business for the foreseeable future.
During the year the Group has continued to
progress its previously announced strategic
transformation, having ceased production
and sales of synthetic carpets to focus solely
on its all-wool carpet business. Consistent
reduced from $22.5 million in 2021 to $14.9
million at year end.
As this represents a material change in
direction of the business there is inherently a
level of estimation uncertainty and execution
risk associated with
maintain sufficient liquidity to meet its
financial commitments as they fall due in the
normal course of business, until the full
benefits of the strategy eventuate, which
management expect to occur from FY25
onwards. Consequently it is an area of focus
for the audit and a key audit matter.
To assess the ongoing liquidity of the Group
and its ability to meet its other financial
commitments as they fall due in the normal
course of business, management has
cash flows and financial position as part of its
mana
operations through to 30 June 2024.
In preparing these forecasts, assumptions
plans, future economic and market
conditions, such as forecast sales volumes,
expected NZD/AUD exchange rate
hedged positions) and forecast wool prices.
In forming its going concern conclusion, the
Board has also taken into consideration a
number of factors including the cash surplus,
the improvement in manufacturing
efficiencies, margins and profile of its
inventory during the year,
potential ability to obtain other sources of
funding (including the sale of other
properties) and the option to reduce
discretionary spending, if required.
for the
period to 30 June 2024, which are used to support
the going concern assumption for the preparation of
the consolidated financial statements, our audit
procedures included the following:
process and controls to prepare cash flow
forecasts;
gaining an understanding of key assumptions
used in the cash flow forecasts through
discussions with management;
previous forecasts by comparing the actual
performance against forecasts in prior periods;
checking these key assumptions are
consistent with the Board approved forecasts;
assessing and challenging key assumptions
such as sales volumes, wool price and
exchange rates with reference to independent
data sources and contracts, where possible,
and to recent actual sales and performance;
performing sensitivity testing on the key sales
assumptions used in the forecast cash flows to
assess the level of forecasting risk;
asse
funding from other sources such as the sale of
other properties and to reduce discretionary
spending, if required; and
performing subsequent events procedures to
cash flow forecasts.
We also considered the adequacy of the related
disclosures in the consolidated financial statements
against the requirements of NZ IFRS.

PwC
Description of the key audit matterHow our audit addressed the key audit matter
Refer to Note 2c to the consolidated financial
statements describing the cash flow forecasts
and basis for conclusion on the use of the
going concern assumption for the preparation
of the consolidated financial statements.
Valuation of inventory
at 30 June 2022 was $27.26 million (30 June
2021 $20.03 million) net of inventory
provisions of $1.35 million (30 June 2021
$1.98 million).
The cost of inventory reflects raw materials
and manufacturing costs, including an
allocation of production overheads based on
normal operating capacity.
The Group has recorded inventory
provisions, which represent a deduction from
the cost of inventory, for obsolete, aged and
discontinued inventory and carpet oddments
their net realisable value.
Determining these provisions involves
significant judgement considering a range of
factors such as inventory rationalisation
plans, consumer demand and trends,
available distribution channels and historical
sales and margins data.
Valuation of inventory is an area of focus and
key audit matter for the audit due to the
significance of the inventory balance, the
complexity of inventory costing, and the
judgements involved in estimating the
inventory provisions.
Note 6c of the consolidated financial
statements describes the accounting policy
on inventories and the judgements and
estimates applied by management to
determine the inventory provision.
To audit the cost of inventory, our procedures
included:
gaining an understanding of the inventory
costing process and controls;
testing the accuracy of the application of
inventory costing by reperforming the
calculation;
verifying inputs, on a sample basis, of the
finished goods, work in progress and yarn
inventory cost by agreeing them to supporting
documents;
testing the cost of raw material inventory, on a
sample basis, to supplier invoices; and
evaluating the nature and appropriateness of
factory overheads capitalised into inventory
based on normal operating capacity, and
testing the mathematical accuracy of the
overhead allocation calculation.
To audit the inventory provisions, our procedures
included:
gaining an understanding of and assessing the
process and controls, taking into consideration
key attributes used such as piece sizes, low
grade quality, discontinued products and
recent sale prices;
take process by
attending selected locations to confirm the
existence and condition of the inventory;
estimate of provisioning by comparing actual
utilisation of provision with the corresponding
prior year provisions; and
testing the net realisable value of finished
goods, on a sample basis, by comparing the
cost with recent sales prices and margins.

PwC
Our audit approach
Overview
Overall group materiality: $478,000, which represents
approximately 0.5% of revenue.
We chose revenue as the benchmark because, in our view, it is the
stable benchmark against which the performance of the Group is
most commonly measured by users and is an accepted benchmark.
We selected transactions and balances to audit based on the
Gro
material classes of transactions and balances in the consolidated
financial statements of the Group.
As reported above, we have two key audit matters, being:
Liquidity and cash flow forecasts
Valuation of inventory
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report but does not include the consolidated financial statements
report comprised the Directors' Responsibility Statement, Trend Statement and Disclosure of Non-
GAAP Financial Information. The remaining other information is expected to be made available to us
after that date. Our opinion on the consolidated financial statements does not cover the other
information and we do not and will not express any form of audit opinion or assurance conclusion
thereon.

PwC
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the Directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
surance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Who we report to
undertaken so that we might state those matters which we are required to state to them in an
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
audit work, for this report or for the opinions we have formed.
Cameron.
For and on behalf of:
Chartered AccountantsAuckland
29 August 2022

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2 9 A u g u s t 2 0 2 2
FY22 RESULTS
PRESENTATION
For the twelve months to 30 June 2022

2

FY22 highlights
Built a sustainable business model
•
Ahead of transformation plan with 44% increase
in normalised EBITDA
•
Continued brand evolution positioning and
strength
•
Shifted focus to premium residential consumer
•
Significant improvement in gross margin
•
Sustainability journey gaining momentum
culminating in PINZ Award
•
Growing demand for rugs
•
Investment in yarn plant capacity
•
Digital technology roll out
•
Improved manufacturing processing while
reducing waste
•
Elco Direct revenue up 20% despite COVID-19
disruptions

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

OUR GROWTH STRATEGY

OPERATING
ENVIRONMENT

Operating environment
•
COVID-19 impacted manufacturing capacity
throughout the year and supply chain leading
to logistical delays into Australia, although this
has eased in recent months
•
Inflationary pressure mostly felt in labour,
material and freight/shipping costs
•
Early 2H22 general economic slowdown
•
Residential builds are taking longer due to key
material shortages such as Gib
•
Global wool prices remain historically low

NZ market share estimate by fibre
AT BREMWORTH,
WE HAVE AN ENORMOUS
OPPORTUNITY TO REBUILD
WOOL’S SHARE OF THE
FLOORING MARKET AND
GROW OUR BUSINESS
Synthetic – opportunity
for wool to take share
Wool

FY22 PRIORITIES &
PROGRESS

1 . CREATE DEMAND
FOR BREMWORTH
BRANDED PRODUCT
PRIORITIES & PROGRESS
FOR FY22

Bremworth has the strongest brand salience and preference in
the carpet category vs key competitors
•
Bremworth has the highest unprompted
brand awareness* in NZ when compared to
all competitor carpet manufacturers
•
Bremworth is the most preferred brand
when compared to key competitors*
•
Preference for Bremworth carpet in NZ has
increased from 27% in 2020 to 35% in 2022*
•
We’ve been awarded the most trusted
carpet brand for the 9
th
year in a row**
•
We’re seeing others pay for the Bremworth
brand as “keyword” in their Google
AdWords
*TRA Consumer Insights Research
**Readers Digest Most Trusted Brand

2 . OPERATIONAL
EFFICIENCY &
COMMERCIAL
EXCELLENCE
PRIORITIES & PROGRESS
FOR FY22

2. Operational efficiency
and commercial excellence
•
Improved gross profit margin from
28.1% to 31.1%
•
Capex investment to increase
manufacturing capacity
•
Reduced SKU’s by 30% to simplify
product offer
•
Improved delivery times and strong
inventory profile to support sales
growth in FY23
•
Exited high volume, low margin
commercial business in Australia
•
Improved quality of inventory
•
Introduced new Te Ara Rangatira
training and development programme
•
Introduced flexible working

3 . SUPER CHARGE
OUR DIGITAL
STRATEGY
PRIORITIES & PROGRESS
FOR FY22

3. Super charge our
digital strategy
•
Growing demand for our online rugs
•
60% growth in website traffic vs FY21
•
Double digit growth in social media
following
•
Consumer insights informing product
development
•
Virtual manufacturing model being
implemented to support sustainable
manufacturing direction and decisions.
This modelling enables us to utilise
technology to reduce water and
energy use while reducing waste and
improving yields and overall efficiency.

4 . PRIORITISE
INNOVATION,
SUSTAINABILITY
& PARTNERSHIPS
PRIORITIES & PROGRESS
FOR FY22

4. Prioritise innovation,
sustainability and
partnerships
•
Won the Primary Industries New Zealand’s
Innovation and Collaboration Project Award
in recognition of our science-based and
research-led sustainability programme
•
Embarked on $2.9m decarbonisation
initiatives to reduce manufacturing carbon
emissions by up to 30%, while also
continuing with $4.9m research-based
sustainability programme
•
Reduced total manufacturing carbon
emissions by 5% vs FY21
•
Developed a fully compostable rug
that can be safely returned to the earth
•
Implementing Industry 4.0 principles
and technology to improve capability,
efficiency and capacity

F I N A N C I A L S

FY22 financial snapshot *
$ millions
Revenue
Gross margin
Gross margin %
EBITDA
Non-trading adjustments **
Normalised EBITDA
Net Profit After Tax (NPAT)
Normalised NPAT
Cash and bank
FY22
95.5
29.7
31.1%
4.9
-
4.9
2.2
1.7
14.9
FY21
111.6
31.4
28.1%
4.7
(1.3)
3.4
1.7
0.4
22.5
* Information extracted or derived from audited financial statements
** FY21 non-trading adjustments of $1.3m comprise net gain on sale and
leaseback of property of $2.6m and restructuring costs of $(1.3)m.
•
Financial and strategic progress ahead of transformation plan
•
EBITDA of $4.9m with 44% increase in normalised EBITDA
•
NPAT up 29% to $2.2 million, with 325% increase in normalised
NPAT
•
FY22 focus on structural improvements driving operational
efficiencies and benefits
•
Strong growth from Elco Direct wool buying business with
increase in average sell price and revenue
•
Robust balance sheet providing a strong platform to continue
executing the strategy

Total FY22 revenue of $95.5m
•
Non-wool carpet revenue accounted for $19.0m of
reduction in revenue
•
Woollen carpet and rugs revenue unchanged on
FY21 despite COVID-19 disruptions
•
$3.1m increase in revenue at Elco Direct wool
acquisition operation, with uplift in average selling
price as demand for quality strong wool grows
•
Revenue expected to increase from FY23 as
transformation gathers momentum and sales of
higher margin, higher value woollen carpets
increase
Revenue reflects strategic transformation

Uplift in gross margin to 31.1%, up from 28.1% in FY21
•
Benefit of improved sales mix and operational efficiencies
•
Strong increases in woollen carpet margin across all markets due to growing
demand for higher end, higher margin, differentiated products
•
Disciplined cost and price management
•
Operating costs reduced by $3.0m versus FY21
Uplift in gross profit

Earnings and profit up as Bremworth continues to make progress with
its all-wool strategy *
$ millions
EBITDA
Non-trading adjustments **
Normalised EBITDA
Net Profit After Tax (NPAT)
Normalised NPAT
FY22
4.9
-
4.9
2.2
1.7
FY21
4.7
(1.3)
3.4
1.7
0.4
* Information extracted or derived from audited financial statements
** FY21 non-trading adjustments of $1.3m comprise net gain on sale and
leaseback of property of $2.6m and restructuring costs of $(1.3)m.
•
EBITDA in line with FY21 despite FY21 inclusive of a one-off
benefit from the sell down of synthetic carpets as well as wage
subsidies brought forward from FY20, and a release of inventory
provisions
•
Normalised EBITDA up 44%, with better margins from woollen
carpet sales, cost-out programme and uplift in Elco Direct
performance more than offset margin foregone from exit of low
margin synthetic/plastic carpet
•
NPAT up 29% to $2.2 million
•
Normalised NPAT up 325%

Cash position remains strong and in line with
expectations
•
Cash and bank of $14.9m as at 30 June 2022
•
Tight control over working capital continues
•
Healthy inventory position with almost 80% of stock aged less than six months
•
Almost 55% of capex invested in plant improvements to enable higher output
and drive manufacturing efficiency
•
Ongoing focus on investment for the future, with no dividend declared
•
Strong financial platform with financial resources to undertake strategic
transformation
Financial position

WE REMAIN COMMITTED TO
OUR GROWTH STRATEGY
G R O W T H E W O O L F L O O R I N G M A R K E T .
G R O W O U R S H A R E O F T H E M A R K E T .
E X P A N D O U R P R E S E N C E .
D E S I G N - L E D I N N O V A T I O N .

S T R O N G L Y
P O S I T I O N E D
FOR THE FUTURE

Outlook
•
Style conscious and educated consumers
resulting in more people choosing wool
over synthetic
•
Expect strong revenue growth across
Australasia
•
Accelerate D2C rug programme
•
Construction demand and related
demand for flooring are continuing
to grow
•
Well positioned to capitalise on supply
constraints from imported products
•
Expect consumers and investors to
support brands with a focus on
sustainability

Strongly positioned to
execute our strategy
•
Clear growth strategy
•
Passionate and expert people
•
Ongoing investment in high
performance culture
•
Capacity for manufacturing growth
•
Significant funding to execute the
strategy
•
Strong Board providing strategic and
governance oversight

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.
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