Preliminary FY24 Half Year Result

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Results announcement
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Updated as at June 2023

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Results for announcement to the market
Name of issuer Bremworth Limited
Reporting Period 6 months to 31 December 2023
Previous Reporting Period 6 months to 31 December 2022
Currency
Amount (000s) Percentage change
Revenue from continuing
operations
$38,994 (17%)
Total Revenue $38,994 (17%)
Net loss from continuing
operations
$(1,677) 116% on prior period loss of
$(778)
Total net loss $(1,677) 116% on prior period loss of
$(778)
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
$0.57 $0.43
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to 1H24 report attached
Authority for this announcement
Name of person

authorised
to make this announcement
Victor Tan
Contact person for this
announcement
Mark Devlin or Greg Smith
Contact phone number +64 21 509 060 or +64 21 711 622
Contact email address Mark@impactpr.co.nz or gregsmith@bremworth.co.nz
Date of release through MAP

29 February 2024

Unaudited financial statements accompany this announcement.

---

MARKET RELEASE

29 February 2024


Chair and CEO Commentary Accompanying the 1H24 Results

Dear Shareholders

We are pleased to present Bremworth’s FY24 First Half (1H24) report, reflecting on our progress as we
enter the final stages of implementing our new hybrid supply model and outlining our strategic initiatives
moving forward.

Severe capacity constraints due to the damage to our Napier plant caused by Cyclone Gabrielle have
impacted our ability to grow revenue during this half year. The message from our retail partners is that
brand-driven demand for our product continues. With the pending near-term return of full production
volumes, a strong cash balance and the release of new ranges, a corresponding lift in revenue is
anticipated for FY25.

As supply improves, at the quality and quantity required, we will be able to meet existing demand and
rebuild our inventory position. This then supports participation in larger commercial developments and
the expansion of our in-store presence in over 100 Australian retail stores.

In 1H24, we have focused on reducing administration and distribution costs to better match our reduced
revenue while noting that administration costs would have been approximately $1.0 million less after
excluding litigation costs and the costs relating to the Board-led strategic review. Once we have the
ability to match supply with demand in each of our markets, we believe that our post-cyclone adaptation
will yield a meaningful improvement to our financial results.

Yarn Supply

Since the forced closure of our Napier yarn plant, which supplied 100% of our dyed fibre needs and 70%
of our yarn, we have worked hard to establish a fully functioning hybrid supply chain. It is exceptionally
difficult. The Napier plant made unique yarns that are hard to recreate anywhere in the world. That said,
we have had no choice but to embark on this mitigation strategy. At the end of 2023, we had replaced
around 60% of our yarn requirements and expects this to be at around 90% by the end of Q3 FY24 and
fully recovered by the end of FY24.

The hybrid supply chain we have created minimises the ongoing yarn supply constraints and revenue
losses. A return to yarn production in Napier would offer further security to our supply chain.

Our yarn plant in Whanganui, which produces world-leading specialty yarn, has been fortified by
strategic partnerships with both domestic and overseas yarn manufacturers who align with our quality
standards, whilst Napier remains offline. These collaborations will enable us to scale production and help
insulate our supply chain from potential future shocks.

Chief Operating Officer

We have appointed Nicola Simpson as Chief Operating Officer, with Nicola having overall responsibility
for all aspects of supply, planning and manufacturing in order to create alignment and focus across our
entire supply chain to ensure our growth targets are achieved.

Insurance

We continue to work closely with our insurers concerning reinstatement at Napier under our material
damage policy. Stage 1 of the rebuild, involving the reopening of our dyehouse, has been completed,
with dyeing operations now underway. The staged approach to reinstatement of the plant is consistent
with our objective of providing security of supply for the future while complementing the hybrid supply
chain. The loss of our continuous finishing line at Napier has been particularly hard to find a solution for
and is the next stage being considered.

Loss of sales, margin losses and ongoing fixed costs incurred during the indemnity period will form the
basis of our business interruption insurance claim.

Investment has also been made in machinery in Whanganui to strengthen our capability to make new
products and increase production volumes.

Strategic Review

The Board-led strategic review has highlighted several opportunities across our core markets for
management to execute in FY25. These opportunities are expected to drive volume and margin growth
across New Zealand and Australia, while also streamlining costs to enhance business focus and
profitability. Specifically, we are implementing a new go-to-market strategy in Australia, leveraging new
digital platforms to accelerate revenue growth in our direct-to-consumer rug business, and reducing our
fixed cost base.

The benefits of these growth and cost reduction strategies are expected to be realised in FY25.

Looking beyond FY25 and with greater certainty in our supply chain emerging, we are poised to embark
on a new strategy in export markets. Further details on these new geographies will be announced over
time.

Growth

Yarn constraints have significantly impacted volume and revenue growth in 1H24 and will continue to
impact FY24 results.

Tufting capacity is anticipated to exceed pre-cyclone levels by Q4 of FY24, as we aim to bolster stock
levels to meet demand in both New Zealand and Australia.

Increased demand for New Zealand’s strong wool has contributed to the Elco Direct wool-buying
business posting pleasing results for the half-year. Our world-first, 10-year, strong wool contracts are
also set to contribute to improved long-term outcomes for farmers. We anticipate the Elco Direct
business will continue to grow revenue and margin in the second half of FY24.

Outlook

We anticipate a return to full production volumes for the carpet business in Q4 FY24.

Bremworth’s uniquely designed new carpet ranges will be released across New Zealand and Australia.
These highly anticipated product innovations are expected to be well received by retailers and
consumers.

While the weather events of last year forced the rationalisation of some of our ranges, these new
releases, our first since the cyclone, are expected to provide a welcome boost to revenue in FY25.

In November 2023, we unveiled our first Bremworth brand experience store which was designed to offer
an immersive sanctuary for our consumers - a space that not only inspires creativity but also fosters a
seamless flooring selection experience for our customers and a deep connection to the Bremworth
brand. This is a first for the industry and is a part of a trial omnichannel strategy that aims to bring us
closer to the end consumer as we look to refine our offer and grow our business. While still in its infancy,
we have received positive feedback to date and are closely monitoring store performance.

We look forward to providing further guidance in our FY24 annual reporting, reflecting the
advancements made in insurance, supply chain management, distribution, and cost efficiencies post
Cyclone Gabrielle.


ENDS




For further information please contact:
Greg Smith Mark Devlin
Chief Executive Officer Impact PR
gregsmith@bremworth.co.nz Mark@impactpr.co.nz
+64 21 711 622 +64 21 509 060

---

CONTENTS


FY24 First Half at a Glance

1
FY24 First Half Financial Snapshot

2
Financial Summary

4
Half Year Review – Chair and CEO Commentary

5
Condensed Consolidated Statement of Profit or Loss

8
Condensed Consolidated Statement of Comprehensive Income

9
Condensed Consolidated Statement of Changes in Equity

10
Condensed Consolidated Statement of Financial Position

12
Condensed Consolidated Statement of Cash Flows

13
Notes to the Financial Statements

15
Disclosure of Non-GAAP Financial Information

27
Corporate Directory

30

1


Bremworth Limited and subsidiary companies

FY24 First Half (1H24) at a Glance

• Severe capacity constraints following closure of Napier plant due to damage post-Cyclone Gabrielle.
• Priority focus on implementing new hybrid supply model to mitigate ongoing yarn supply constraints
and revenue losses now in its final stages, with positive results being delivered. This will allow
Bremworth to rebuild volumes and inventory to meet demand.
• Continuing to work with insurers on the remediation of the Napier plant, with reinstatement of the
dyehouse completed and work on the yarn continuous finishing line being considered.
• Board-led strategic review nearing completion and highlighting opportunities for management to
drive volume and margin growth while also streamlining costs to enhance profitability.
• Ongoing focus on brand and product initiatives including opening of new Bremworth brand
experience store in Auckland, continued new product development with new ranges to be launched
in 2H24 and growing sales of Bremworth rugs.
• Appointment of new Chief Operating Officer to create alignment and focus across the supply chain
and ensure growth targets are achieved.
• A strategy update will be provided to shareholders following completion of the strategic review and
insurance claims process.

2


Bremworth Limited and subsidiary companies

FY24 First Half (1H24) Financial Snapshot

• Group revenue was down $8.2 million on 1H23, with all of that attributable to the core carpet
business.
• Carpet revenue was down a total of $9.2 million across all three key markets, with the carpet
business unable to meet customer demand while securing alternative supply of yarn through the
new overseas supply chain.
• Rug revenue was up $0.2 million or 30% on 1H23.
• Revenue for the Elco Direct wool segment was up $0.8 million on the back of increased volume and
improved selling prices.
• Group gross profit margin was down from 31.2% in 1H23 to 27.3% in 1H24 as a consequence of lower
carpet volumes, and the flow on effect into recovery of fixed production costs, and pressures on
selling price from inability to supply.
• Group cash and bank position as at balance date stood at $30.8 million.

3


Bremworth Limited and subsidiary companies

FY24 First Half (1H24) Financial Snapshot (continued)

4


Bremworth Limited and subsidiary companies

Financial Summary - for the six months ended 31 December 2023 (Unaudited)

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
Unaudited
2

Year
ended
30 June 2023
$000 $000 $000

Revenue $38,994 $47,183 $89,689

EBITDA (normalised)
1
(1,680) 692 (200)

Depreciation – owned assets (373) (309) (845)
Depreciation – right-of-use assets (524) (490) (994)
Depreciation – recycled through inventory - (39) -

EBIT (normalised)
1
(2,577) (146) (2,039)

Finance costs (398) (562) (1,045)
Finance income 777 66 502

Loss before income tax (normalised)
1
(2,198) (642) (2,582)

Income tax (expense)/credit (92) (136) (263)

Loss after tax (normalised)
1
(2,290) (778) (2,845)

Abnormal net gain/(loss) after tax
1
613 - 13,581

(Loss)/Profit after tax (GAAP) $(1,677) $(778) $10,736

Net cash flow from operating activities $(15,841) $(1,839) $(7,069)

Basic earnings per share (cents)
Normalised
1
(3.27) (1.12) (4.08)
GAAP (2.39) (1.12) 15.39

Diluted earnings per share (cents)
Normalised
1
(3.22) (1.09) (4.02)
GAAP (2.36) (1.09) 15.17

Return on average shareholders’ equity (%)
Normalised
1
(4.6)% (2.0%) (6.5%)
GAAP (3.4)% (2.0%) 24.4%

Unaudited
As at
31 December
2023
Unaudited
As at
31 December
2022
Unaudited
2

As at
30 June 2023

Net tangible asset backing per share ($) $0.57 $0.43 $0.59


Equity to total assets (%) 57.3% 50.8% 55.1%



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 27 to 29 of the half year report.

2
Prepared using the audited GAAP-compliant financial statements for the year ended 30 June 2023.

5


Bremworth Limited and subsidiary companies

Half Year Review

Chair and CEO Commentary


Dear Shareholders

We are pleased to present Bremworth’s FY24 First Half (1H24) report, reflecting on our progress as we
enter the final stages of implementing our new hybrid supply model and outlining our strategic initiatives
moving forward.

Severe capacity constraints due to the damage to our Napier plant caused by Cyclone Gabrielle have
impacted our ability to grow revenue during this half year. The message from our retail partners is that
brand-driven demand for our product continues. With the pending near-term return of full production
volumes, a strong cash balance and the release of new ranges, a corresponding lift in revenue is
anticipated for FY25.

As supply improves, at the quality and quantity required, we will be able to meet existing demand and
rebuild our inventory position. This then supports participation in larger commercial developments and
the expansion of our in-store presence in over 100 Australian retail stores.

In 1H24, we have focused on reducing administration and distribution costs to better match our reduced
revenue while noting that administration costs would have been approximately $1.0 million less after
excluding litigation costs and the costs relating to the Board-led strategic review. Once we have the
ability to match supply with demand in each of our markets, we believe that our post-cyclone adaptation
will yield a meaningful improvement to our financial results.

Yarn Supply

Since the forced closure of our Napier yarn plant, which supplied 100% of our dyed fibre needs and 70%
of our yarn, we have worked hard to establish a fully functioning hybrid supply chain. It is exceptionally
difficult. The Napier plant made unique yarns that are hard to recreate anywhere in the world. That said,
we have had no choice but to embark on this mitigation strategy. At the end of 2023, we had replaced
around 60% of our yarn requirements and expects this to be at around 90% by the end of Q3 FY24 and
fully recovered by the end of FY24.

The hybrid supply chain we have created minimises the ongoing yarn supply constraints and revenue
losses. A return to yarn production in Napier would offer further security to our supply chain.

Our yarn plant in Whanganui, which produces world-leading specialty yarn, has been fortified by
strategic partnerships with both domestic and overseas yarn manufacturers who align with our quality
standards, whilst Napier remains offline. These collaborations will enable us to scale production and help
insulate our supply chain from potential future shocks.

Chief Operating Officer

We have appointed Nicola Simpson as Chief Operating Officer, with Nicola having overall responsibility
for all aspects of supply, planning and manufacturing in order to create alignment and focus across our
entire supply chain to ensure our growth targets are achieved.

6


Bremworth Limited and subsidiary companies

Half Year Review (continued)

Chair and CEO Commentary (continued)


Insurance

We continue to work closely with our insurers concerning reinstatement at Napier under our material
damage policy. Stage 1 of the rebuild, involving the reopening of our dyehouse, has been completed,
with dyeing operations now underway. The staged approach to reinstatement of the plant is consistent
with our objective of providing security of supply for the future while complementing the hybrid supply
chain. The loss of our continuous finishing line at Napier has been particularly hard to find a solution for
and is the next stage being considered.

Loss of sales, margin losses and ongoing fixed costs incurred during the indemnity period will form the
basis of our business interruption insurance claim.

Investment has also been made in machinery in Whanganui to strengthen our capability to make new
products and increase production volumes.

Strategic Review

The Board-led strategic review has highlighted several opportunities across our core markets for
management to execute in FY25. These opportunities are expected to drive volume and margin growth
across New Zealand and Australia, while also streamlining costs to enhance business focus and
profitability. Specifically, we are implementing a new go-to-market strategy in Australia, leveraging new
digital platforms to accelerate revenue growth in our direct-to-consumer rug business, and reducing our
fixed cost base.

The benefits of these growth and cost reduction strategies are expected to be realised in FY25.

Looking beyond FY25 and with greater certainty in our supply chain emerging, we are poised to embark
on a new strategy in export markets. Further details on these new geographies will be announced over
time.

Growth

Yarn constraints have significantly impacted volume and revenue growth in 1H24 and will continue to
impact FY24 results.

Tufting capacity is anticipated to exceed pre-cyclone levels by Q4 of FY24, as we aim to bolster stock
levels to meet demand in both New Zealand and Australia.

Increased demand for New Zealand’s strong wool has contributed to the Elco Direct wool-buying
business posting pleasing results for the half-year. Our world-first, 10-year, strong wool contracts are
also set to contribute to improved long-term outcomes for farmers. We anticipate the Elco Direct
business will continue to grow revenue and margin in the second half of FY24.

7


Bremworth Limited and subsidiary companies

Half Year Review (continued)

Chair and CEO Commentary (continued)


Outlook

We anticipate a return to full production volumes for the carpet business in Q4 FY24.

Bremworth’s uniquely designed new carpet ranges will be released across New Zealand and Australia.
These highly anticipated product innovations are expected to be well received by retailers and
consumers.

While the weather events of last year forced the rationalisation of some of our ranges, these new
releases, our first since the cyclone, are expected to provide a welcome boost to revenue in FY25.

In November 2023, we unveiled our first Bremworth brand experience store which was designed to offer
an immersive sanctuary for our consumers - a space that not only inspires creativity but also fosters a
seamless flooring selection experience for our customers and a deep connection to the Bremworth
brand. This is a first for the industry and is a part of a trial omnichannel strategy that aims to bring us
closer to the end consumer as we look to refine our offer and grow our business. While still in its infancy,
we have received positive feedback to date and are closely monitoring store performance.

We look forward to providing further guidance in our FY24 annual reporting, reflecting the
advancements made in insurance, supply chain management, distribution, and cost efficiencies post
Cyclone Gabrielle.





For and on behalf of the Board of Directors:







George Adams Greg Smith
Chairman Chief Executive Officer

29 February 2024

8


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Profit or Loss


Six months ended 31 December 2023 (Unaudited)

Note Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000


Revenue from contracts with customers 4 38,994 47,183
Cost of sales (28,365) (32,478)

Gross profit 10,629 14,705

Other income and gains 5 202 383
Distribution expenses (7,171) (9,296)
Administration expenses (6,237) (5,938)
Cyclone Gabrielle related insurance income 10,000 -
Cyclone Gabrielle related expenses (9,014) -
Cyclone Gabrielle related asset impairment reversed 100 -
Restructuring costs (473) -

(1,964) (146)

Finance costs 6 (398) (562)
Finance income 777 66

Loss before income tax (1,585) (642)

Income tax expense (92) (136)

Loss after tax for the period $(1,677) $(778)

Basic earnings per share (cents) 2 (2.39) (1.12)

Diluted earnings per share (cents) 2 (2.36) (1.09)





















This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual
financial statements.

9


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Comprehensive Income


Six months ended 31 December 2023 (Unaudited)

Note Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000


Loss after tax for the period (1,677) (778)

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

Effective portion of changes in fair value of cash flow hedges
(net of income tax, if any)

367

1,870
Net change in fair value of cash flow hedges transferred to profit
or loss (net of income tax, if any)



(266)

289
Total other comprehensive income 101 2,159

Total comprehensive income for the period $(1,576) $1,381



































This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual
financial statements.

10


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity


Six months ended 31 December 2023 (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 2023 22,054 938 (1,420) 615 28,036 50,223

Total comprehensive income for the period

Loss after tax - - - - (1.677) (1,677)

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

Changes in fair value of cash flow hedges (net of income tax, if any) - 101 - - - 101

Total comprehensive income for the period - 101 - - (1,677) (1,576)

Transactions with owners in their capacity as owners
Share-based payments – value of employee services 7 - - - 64 - 64

Total equity at 31 December 2023 $22,054 $1,039 $(1,420) $679 $26,359 $48,711














This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual financial statements.

11


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Changes in Equity (continued)


Six months ended 31 December 2022 (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 2022 22,054 (576) (1,420) 413 17,300 37,771

Total comprehensive income for the period

Loss after tax - - - - (778) (778)

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

Changes in fair value of cash flow hedges (net of income tax, if any) - 2,159 - - - 2,159

Total comprehensive income for the period - 2,159 - - (778) 1,381

Transactions with owners in their capacity as owners
Share-based payments – value of employee services 7 - - - 104 - 104

Total equity at 31 December 2022 $22,054 $1,583 $(1,420) $517 $16,522 $39,256














This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual financial statements.

12


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Financial Position


As at 31 December 2023 (Unaudited)
Note Unaudited
31 December
2023
Audited
30 June 2023
$000 $000

ASSETS

Property, plant and equipment - owned 11,953 10,234
Property, plant and equipment – right-of-use 8,092 8,616
Deferred tax asset 573 576

Total non-current assets 20,618 19,426

Cash and cash equivalent 18,839 31,819
Short-term deposits 12,000 7,500
Trade receivables, other receivables and prepayments 10,956 9,957
Inventories 9 21,114 21,122
Advance to employees 176 170
Derivative financial instruments 1,197 1,017
Income tax receivable 112 125

Total current assets 64,394 71,710

Total assets $85,012 $91,136

EQUITY

Share capital 22,054 22,054
Cash flow hedging reserve 1,039 938
Foreign currency translation reserve (1,420) (1,420)
Share-based payment reserve 7 679 615
Retained earnings 26,359 28,036

Total equity 48,711 50,223

LIABILITIES

Lease liabilities 16,205 16,742
Employee benefits 479 666
Provisions 914 819

Total non-current liabilities 17,598 18,227

Trade payables and accruals 11,301 14,948
Customer deposits 234 192
Employee benefits 38 38
Employee entitlements 4,540 4,877
Lease liabilities 1,197 1,296
Provisions 667 816
Derivative financial instruments 60 16
Deferred income 666 503

Total current liabilities 18,703 22,686

Total liabilities 36,301 40,913

Total equity and liabilities $85,012 $91,136


This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual
financial statements.

13


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Cash Flows


Six months ended 31 December 2023 (Unaudited)

Note Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 40,297 49,666
Cash paid to suppliers and employees (45,867) (50,620)
(5,570) (954)

Government grants received 178 118
Other receipts 3 3
GST paid (1,779) (316)
Interest paid – loans and borrowings - (112)
Interest component of lease payments (398) (450)
Interest received 772 47
Income tax paid (76) (175)
Cyclone Gabrielle related expenses (8,971) -

Net cash flow from operating activities (15,841) (1,839)


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant and equipment - 10
Acquisition of plant and equipment (1,992) (1,696)
Short term deposits (4,500) 4,000
Cyclone Gabrielle related insurance income 10,000 -

Net cash flow from investing activities 3,508 2,314


CASH FLOWS FROM FINANCING ACTIVITIES
Principal component of lease payments (636) (964)

Net cash flow from financing activities (636) (964)


NET DECREASE IN CASH AND CASH EQUIVALENT (12,969) (489)

Cash and cash equivalent at beginning of the period 31,819 10,874

Effect of exchange rate changes on cash (11) (16)

CASH AND CASH EQUIVALENT AT END OF THE
PERIOD



$18,839

$10,369











This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual
financial statements.

14


Bremworth Limited and subsidiary companies

Condensed Consolidated Statement of Cash Flows (continued)


Reconciliation of loss with net cash flow from operating activities

Six months ended 31 December 2023 (Unaudited)

Note Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000

Loss after tax for the period (1,677) (778)

Add/(Deduct) non-cash items:
Depreciation – owned assets 373 309
Depreciation – right-of-use assets 524 490
Reversal of impairment of fixed assets (100) -
Share-based payments – value of employee services 64 104
Interest income - advance to employees (6) (6)
Deferred tax 3 21
Net loss on foreign currency balance 11 16

Deduct items reclassified under investing
activities:

Cyclone Gabrielle related insurance income (10,000) -

Add/(Deduct changes in working capital items:
Trade receivables, other receivables and
prepayments

(482)

1,674
Inventories 8 (1,770)
Income tax receivable 13 (60)
Trade payables and accruals (4,164) (1,086)
Customer deposits 42 (71)
Employee benefits and entitlements (524) (370)
Provisions (54) (242)
Deferred income 163 196
Derivative financial instruments (35) (266)

Net cash flow from operating activities $(15,841) $(1,839)
















This statement is to be read in conjunction with the Notes on pages 15 to 26 and the previous year’s annual
financial statements.

15


Bremworth Limited and subsidiary companies

Notes to the Financial Statements
For the six months ended 31 December 2023

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 year 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 2023.

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 year reports incorporating, among other things, the
interim financial statements covering the Group.

The principal activities of the Group comprise the Elco Direct wool acquisition business 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
2022, are unaudited. The comparative information as at 30 June 2023 is audited.

The interim financial statements were approved for issue by the Board of Directors (“Board”) of the
Company on 29 February 2024.

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
2023.

Accounting policies

The interim financial statements should be read in conjunction with the annual financial statements for the
year ended 30 June 2023 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.

16


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

1. General information (continued)

Impact of Cyclone Gabrielle

Background

On 14 February 2023, the Napier yarn spinning plant suffered widespread flooding as Cyclone Gabrielle,
which struck New Zealand from 13 to 15 February 2023, brought severe winds and rain and extensive
flooding to parts of the North Island - including Hawke’s Bay where the Napier yarn spinning plant is
situated.

The Napier plant was inundated and sustained significant damage to buildings and plant and equipment as
well as loss of inventory.

The Napier plant is a key plant within the Group’s woollen carpet operation, supplying woollen spun yarn to
the Auckland carpet plant for conversion into carpet and dyed fibre to the Whanganui yarn spinning plant
for processing into felted yarns for carpet manufacturing.

Risk mitigation and business continuity plans

With the Napier yarn spinning plant offline and in order to secure the Group’s ongoing access to yarns and
dyed fibre, management activated risk mitigation and business continuity plans which included alternative
supply arrangements as follows:

— procuring woollen yarns from an independent New Zealand yarn spinner for some of its woollen carpet
ranges;
— use of an independent third-party dyeing facility to supply the Whanganui yarn spinning plant with dyed
fibre; and
— procuring New Zealand wool yarns, and dyed New Zealand wool fibre, from overseas suppliers.

Following the reconfiguration of its plant and equipment, the Whanganui plant was able to not only produce
felted yarns but also woollen spun yarns – putting the woollen carpet operation in a strong position to
continue to supply key product ranges to its distribution partners.

This new hybrid supply chain model was expected to complement the existing woollen carpet operation
while also insulating the Group from future events that could potentially disrupt operations and further
strengthening the business.

Progress since the issue of the financial statements for the year ended 30 June 2023

With site clean-up completed and buildings and plant and equipment stabilised to prevent further
deterioration, the Group has been looking at options relating to the future of the Napier plant.

This review led to the reinstatement of the dyehouse which was nearing completion at the end of
December 2023. The dyehouse is currently undergoing production commissioning as well as regulatory
compliance and health and safety sign off.

The decision to reinstate the dyehouse was in response to gaps that were identified in the interim
arrangements that had been put in place to provide the carpet business with ongoing access to dyed fibre.

Reinstatement of other processes and key items of plant and equipment at the Napier site are being
explored to address other potential gaps in the new hybrid supply chain model.

17


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

1. General information (continued)

Impact of Cyclone Gabrielle (continued)

Insurance

The Group has comprehensive insurance cover relating to the damage and losses arising from Cyclone
Gabrielle.

The insurers have acknowledged the cyclone event and confirmed that the Group’s material damage policy
will respond in relation to damage to buildings and plant and equipment as well as loss of inventory and the
business interruption policy will respond in relation to the impact of reduction in turnover and costs incurred
as a result of consequent disruptions to the business.

The business interruption policy provides for an indemnity period of 18 months. As a consequence, claims
under the business interruption policy are expected to occur in FY24 and into FY25.

The insurance claims process is continuing to progress, with the Group receiving, in the six months ended
31 December 2023, a further progress payment of $10.0 million from its insurers – bringing the total since
the cyclone to $45.5 million – with these progress payments made on the condition that if the final adjusted
loss (as agreed between the parties or as determined by any applicable dispute resolution process) is less
than the amount of the progress payments and all other payments under the policies, then the overpaid
amount will be promptly refunded.

The Group expects that the claims process will take time to complete, with a number of issues yet to be
worked through between the loss adjusters and their experts in conjunction with the Group and its advisers
and external experts.

18


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

1. General information (continued)

Impact of Cyclone Gabrielle (continued)

Dealing with impact of Cyclone Gabrielle in the financial statements

The following table summarises the impact of Cyclone Gabrielle on the Group and how these have been dealt with in the financial statements:

Unaudited
Six months
ended 31
December
2023
Unaudited
Six months
ended 31
December
2022
Audited
Year ended
30 June
2023
Impact of Cyclone Gabrielle Statement of profit or loss line item $000’s $000’s $000’s
Insurance proceeds recognised as income Cyclone Gabrielle related insurance income $10,000 - $35,500
Further insurance proceeds recognised as income and as a
receivable where receipt is virtually certain and amount is
able to be reliably estimated
Not applicable - - -
Insurance proceeds recognised as contingent assets Not applicable - - -
Site clean-up, asset stabilisation and waste disposal costs
incurred recognised as expenses
Cyclone Gabrielle related expenses ($703) - ($6,353)
Ongoing payroll costs recognised as expenses Cyclone Gabrielle related expenses ($3,083) - ($5,372)
Ongoing costs as a result of the cyclone, increased costs of
working and other additional costs to avoid loss of revenue
as well as professional fees (including claims preparation
costs) incurred that have also been recognised as expenses
Cyclone Gabrielle related expenses ($3,827) - ($2,550)
Cost of voluntary redundancies incurred Cyclone Gabrielle related expenses ($1,401) - -
Damaged or destroyed buildings and plant and equipment
derecognised to the extent appropriate
Cyclone Gabrielle related asset write offs - - ($5,170)
Damaged or destroyed inventory written off to the extent
appropriate
Cyclone Gabrielle related asset write offs - - ($2,474)
Plant and equipment previously derecognised and
subsequently reinstated
Cyclone Gabrielle related asset impairment
reversed
$100 - -

19


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

1. General information (continued)

Going concern

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.

Cash and bank at balance date of $30.8 million, while down on the $39.3 million as at 30 June 2023,
remains significantly higher than the $10.4 million as at 31 December 2022 as a result of insurance
progress payments received.

Reduction in cash and bank in the last six months was largely as expected, with the costs associated with
voluntary redundancies for Napier-based employees, and holiday pay paid out, accounting for
approximately $2.6 million. Payments relating to site clean-up, asset stabilisation and claims preparation
costs totalling $3.5 million that were accrued at 30 June 2023 and GST in relation to insurance progress
payments received prior to 30 June 2023 of $2.1 million accounted for a further $5.6 million of cash
outflows over the six months to 31 December 2023.

Net working capital (being current assets (excluding cash and bank) less current liabilities) employed by
the Group as at balance date of $14.9 million, while up on the $9.7 million as at 30 June 2023, is well down
on the $22.4 million as at 31 December 2022, as a consequence of the reduction in sales and the lower
levels of activity as well as ongoing focus on working capital utilisation and efficiency.

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 as a consequence of Cyclone Gabrielle, management has
prepared forecasts of the Group’s financial performance, while also assessing cash flows and financial
position, as part of its management and monitoring of the Group’s operations through to 30 June 2025.

In preparing these forecasts, management considered and, where required made assumptions, in relation
to yarn supply, ongoing reduction in fixed costs, the next stage of the reinstatement of the Napier plant that
is being considered and the further insurance recoveries that are expected.

The Board expects that existing cash and bank of $30.8 million is easily sufficient to enable the Group’s
continued operation.

Despite the disruptions from Cyclone Gabrielle, the Group continues to trade and to actively engage with
its distribution partners - with the focus on ensuring we can continue to supply key product ranges and to
support them.

The Board is committed to the future of the existing woollen carpet business, with the new hybrid supply
chain model post Cyclone Gabrielle entering the final stages of implementation, while also considering the
next stage of the reinstatement of the Napier carpet yarn spinning plant to further insulate the Group from
future events that could potentially disrupt operations.

That commitment to the future of the business is further demonstrated by its decision to undertake a Board-
led strategic review.

20


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

2. Earnings per share

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000

Basic earnings per share (Basic EPS)

Loss after tax ($000) $(1,677) $(778)

Weighted average number of ordinary shares outstanding 70,069,426 69,479,100

Basic EPS (cents) (2.39) (1.12)

Diluted earnings per share (Diluted EPS)

Loss after tax ($000) $(1,677) $(778)

Weighted average number of ordinary shares outstanding 71,069,426 71,550,494

Diluted EPS (cents) (2.36) (1.09)

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 schemes and the Company’s share
option scheme as discussed in Note 7 (Share-based payment arrangements) to the interim financial
statements.

21


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

3. Segment performance

Unaudited Carpet Elco Direct wool Total

Six months
ended
31 December
2023
Six months
ended
31 December
2022
Six months
ended
31 December
2023
Six months
ended
31 December
2022
Six months
ended
31 December
2023
Six months
ended
31 December
2022
$000 $000 $000 $000 $000 $000
External revenue 30,619 39,564 8,375 7,619 38,994 47,183
Inter-segment revenue - - 1,408 1,161 1,408 1,161
Total revenue $30,619 $39,564 $9,783 $8,780 40,402 48,344

Elimination of inter-segment revenue (1,408) (1,161)
Consolidated revenue $38,994 $47,183

Segment result before
depreciation, insurances and
restructuring costs


(1,395)


1,040


211


57


(1,184)


1,097
Depreciation – owned assets (294) (230) (79) (79) (373) (309)
Depreciation - right-of-use assets (458) (424) (66) (66) (524) (490)
Depreciation – recycled through
inventory

-

(39)

-

-

-

(39)
Segment result before insurances
and restructuring costs

(2,147)

347

66

(88)

(2,081)

259

Cyclone Gabrielle related insurance
income

10,000

-

-

-

10,000

-
Cyclone Gabrielle related expenses (9,014) - - - (9,014) -
Cyclone Gabrielle related asset
impairment reversed

100

-

-

-

100

-
Segment result before
restructuring costs

(1,061)

347

66

(88)

(995)

259
Restructuring costs (473) - - - (473) -
Segment result (1,534) 347 66 (88) (1,468) 259

Elimination of inter-segment profits (46) -
Unallocated corporate costs (450) (405)
Result from operating activities (1,964) (146)

Finance costs (398) (562)
Finance income 777 66
Loss before income tax (1,585) (642)

Income tax expense (92) (136)
Loss after tax for the period $(1,677) $(778)


Carpet Elco Direct wool Total

Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
$000 $000 $000 $000 $000 $000
Reportable segment assets 50,173 46,846 4,000 4,971 54,173 51,817
Unallocated assets – cash and bank 30,839 39,319
Total assets $85,012 $91,136

Reportable segment liabilities 17,890 21,290 1,009 1,585 18,899 22,875
Unallocated liabilities – lease liabilities 17,402 18,038
Total liabilities $36,301 $40,913

The Group’s reportable and operating segments are:
— Carpet, with this segment involved in the manufacturing and sales of carpet and rugs in New Zealand,
Australia and rest of world; and
— Elco Direct wool, with this segment involved in the acquisition of wool for the carpet segment and for
sales to external customers in New Zealand.

22


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

3. Segment performance (continued)

Inter-segment transactions

All inter-segmental transactions included in revenue and operating expenses for each segment are on an
arm’s-length basis. Inter-segmental sales during the 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
2023
Unaudited
Six months
ended
31 December
2022
$000 $000
Revenue
Carpet sales and manufacturing segment
New Zealand
Carpet 14,377 16,546
Rugs 472 344
Miscellaneous 150 281
Australia
Carpet 14,145 20,761
Rugs 247 209
Miscellaneous 253 268
Rest of the world
Carpet 701 1,155
Carpet yarn 274 -
Elco Direct wool acquisition segment
New Zealand 8,375 7,619

Total revenue $38,994 $47,183

Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
$000 $000
Non-current assets
New Zealand 19,567 18,329
Australia 1,051 1,097

Total non-current assets $20,618 $19,426

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.

23


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

4. Revenue from contracts with customers

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000
Sales of goods
Carpet 29,223 38,462
Rugs 719 553
Carpet yarn 274 -
Miscellaneous 403 549
Elco Direct wool 8,375 7,619
Total revenue $38,994 $47,183

5. Other income and gains

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000
Rentals received 2 2
Dividends received 1 1
Government grants recognised 199 380
Total other income and gains $202 $383


6. Finance costs

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
$000 $000
Interest expense – loans and borrowings - 112
Interest component of lease payments 398 450
Finance costs $398 $562

24


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

7. Share-based payment arrangements

The Company operates four share-based payment plans/schemes, with these plans/schemes designed
to incentivise selected employees by providing them with opportunities to be issued equity interests in the
Company – in the process aligning their interests with those of shareholders.

The Company has determined the performance rights, the shares and the options issued under these
plans/schemes 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.

There were no issue of performance rights, shares or options under the various plans/schemes during the
six months ended 31 December 2023.

More information on the Company’s share-based payment arrangements can be found in Note 9b of the
annual financial statements for the year ended 30 June 2023.

Maximum number of shares that could be issued under current share-based payment
arrangements (excluding those already issued under the 2022 LTI Scheme)

Unaudited
Six months
ended
31 December
2023
Unaudited
Six months
ended
31 December
2022
Balance at start of period 1,000,000 2,071,394
Issued during the period - -
Balance at end of period 1,000,000 2,071,394

Impact of share-based payment arrangements on the financial statements

The assessed fair value of the performance rights and options at grant date 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 rights and options where the
service condition will be met, with corresponding entries to the share-based payment reserve within
equity.

$64,000, being the proportion of fair value of the options under the Bremworth Option Scheme and the
fair value of the performance rights under the 2022 LTI Scheme relating to the six months ended 31
December 2023, were recognised in administration expenses in the statement of profit or loss for the
period, with a corresponding credit totalling $64,000 to the share-based payment reserve within equity
(2022: $104,000).

8. Capital commitments

The Group had outstanding commitments for the purchase of plant and equipment of $1,170,000 (30
June 2023 $72,000) at balance date, with $1,090,000 of this relating to the relocation of the Auckland
carpet warehousing and distribution centre from Wiri to Papatoetoe.

The extent of further remediation works that may be required at the Napier yarn spinning plant are still
being considered and no capital commitments relating to remediation works have therefore been entered
into at balance date.

25


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

9. Inventories

Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
$000 $000
Raw materials and consumables 6,023 4,621
Stocks in transit 1,144 169
Work in progress 507 1,039
Finished goods 13,440 15,293
$21,114 $21,122

Inventory provisioning $1,441 $1,408

During the six months ended 31 December 2023, provision in respect of inventories increased by
$33,000 (six months ended 31 December 2022: decreased by $166,000), with the corresponding
amounts charged/released to the statement of profit or loss.

10. Contingencies

Unaudited
As at
31 December
2023
Audited
As at
30 June 2023
$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


$2,068


$2,068

11. Related parties

Apart from directors’ fees, key management personnel remuneration and the professional services that
were provided by Paul Izzard Design Limited in relation to Bremworth’s new brand experience store,
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.

The fees charged by Paul Izzard Design Limited for the professional services rendered totalled $34,000
during the six months ended 31 December 2023, with the services approved by the Board and these fees
approved as arms-length.

12. Climate-related disclosures

Understanding, and dealing with, the impact of climate-related risks

The Group has considered the impact of climate-related risks on the business and on its future financial
performance, financial position and cash flows as part of the sustainability framework that has been
adopted under the Group’s transformation strategy to becoming an all-wool and natural materials
organisation.

26


Bremworth Limited and subsidiary companies

Notes to the Financial Statements (continued)

12. Climate-related disclosures (continued)

Understanding, and dealing with, the impact of climate-related risks (continued)

One of these key risks is the exposure to the effects of climate change through adverse climatic
conditions (for example, flooding, with the Napier site inundated by flood waters following Cyclone
Gabrielle in February 2023 and both the Whanganui and Auckland sites identified as having specific flood
risks). In time, it is expected that the Group would also have to understand, and deal with, the effects of
rising seas levels, with both the Napier and Whanganui sites within close proximity of the coast and
significant rivers.

In relation to this risk, work to understand natural hazards at all of the Group’s manufacturing sites as well
as available mitigation strategies – including establishing appropriate stormwater infrastructure and
processes to mitigate the current levels of risk posed by these events while also gaining a deeper
understanding of the potential impact of these weather events including their frequency and severity as
well as the resilience of the wider flood-protection infrastructures and systems that we rely on as part of
our climate change adaptation – is ongoing.

Risk mitigation and business continuity plans

The Group has continued to focus on its risk mitigation and business continuity plans following Cyclone
Gabrielle, with particular attention being given to the resilience of the new hybrid supply chain model
while also ensuring that the recent reinstatement of the Napier dyehouse was designed and implemented
to improve the overall resilience of the plant should another similar event arise again.

It is also now standard practice to incorporate into all capital project assessments the learnings from the
February 2023 flooding event at the Napier site, thereby reducing the risks of a similar flooding event
having a similar impact on the Group following Cyclone Gabrielle in February 2023.

Insurance

The Group has in place insurances to protect it against losses arising from climate-related events.

While cover for material damage and business interruption as a consequence of floods (excluding the
Napier site) has been capped at $47.3 million, and with a deductible of $2.5 million and a waiting period
of 45 days, at the last renewal of the Group’s insurance policy, the Group is working with its insurance
brokers to:

— reinstate flood cover for the recently reinstated Napier dyehouse, and
— better understand what would be required for its insurers to reinstate full flood cover for the Group.

Financial implications

Based on the Group’s assessment, there is nothing to indicate that climate-related risks have had any
impact on the carrying value of its non-financial assets as at 31 December 2023 other than those already
recognised following Cyclone Gabrielle as discussed in note 3 (Cyclone Gabrielle) to the annual financial
statements for the year ended 30 June 2023.

The Board will continue to closely monitor developments in this area and, in particular, the scope of future
insurances against flooding.

13. Events after balance date

There have been no events subsequent to 31 December 2023 which would materially affect the financial
statements.

27


Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information
For the six months ended 31 December 2023

The half year report for the six months ended 31 December 2023 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 28 and
29);
- 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’.

28


Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


Reconciliation of GAAP-compliant to non-GAAP-compliant measures of loss after tax

Unaudited
Six months ended 31 December 2023

GAAP Adjustments Normalised
$000 $000 $000

Revenue $38,994 - $38,994

EBITDA (1,067) (613) (1,680)

Depreciation - owned assets (373) - (373)
Depreciation – right-of-use assets (524) - (524)

EBIT

(1,964) (613) (2,577)

Finance costs (398) - (398)
Finance income 777 - 777

Loss before income tax (1,585) (613) (2,198)

Income tax (expense)/credit (92) - (92)

Loss after tax $(1,677) (613) (2,290)

Abnormal net loss after tax 613 613

Loss after tax (GAAP) - $(1,677)



Analysis of abnormal items

Before tax Tax effect After tax
$000 $000 $000
Cyclone Gabrielle related income 10,000 - 10,000
Cyclone Gabrielle related expenses and asset
impairment reversed

(8,914)

-

(8,914)
Restructuring costs (473) - (473)
613 - 613


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

Six months ended 31 December 2023 GAAP-
compliant
reported loss
after tax
Reverse
abnormal
items (net of
tax) where
applicable
Non-GAAP-
compliant
normalised
loss after tax

Loss after tax ($000) $(1,677) $(613) $(2,290)

Weighted average number of ordinary shares (basic) 70,069,426 70,069,426
Basic earnings per ordinary share (cents) (2.39) (3.27)

Weighted average number of ordinary shares (diluted) 71,069,426 71,069,426
Diluted earnings per ordinary share (cents) (2.36) (3.22)

29


Bremworth Limited and subsidiary companies

Disclosure of Non-GAAP Financial Information (continued)


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

Unaudited
Six months ended 31 December 2022

GAAP Adjustments Normalised
$000 $000 $000

Revenue $47,183 - $47,183

EBITDA 692 - 692

Depreciation - owned assets (309) - (309)
Depreciation – right-of-use assets (490) - (490)
Depreciation – recycled through inventory (39) - (39)

EBIT

(146) - (146)

Finance costs (562) - (562)
Finance income 66 - 66

Loss before income tax (642) - (642)

Income tax (expense)/credit (136) - (136)

Loss after tax $(778) - (778)

Abnormal net loss after tax - -

Loss after tax (GAAP) - $(778)



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

Six months ended 31 December 2022 GAAP-
compliant
reported loss
after tax
Reverse
abnormal
items (net of
tax) where
applicable
Non-GAAP-
compliant
normalised
loss after tax

Loss after tax ($000) $(778) - $(778)

Weighted average number of ordinary shares (basic) 69,479,100 69,479,100
Basic earnings per ordinary share (cents) (1.12) (1.12)

Weighted average number of ordinary shares (diluted) 71,550,494 71,550,494
Diluted earnings per ordinary share (cents) (1.09) (1.09)

30


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 2104, P O Box 97-040, Auckland 2241.
Telephone: 64-9-277 6000, Facsimile: 64-9-279 4756, Website: bremworth.co.nz

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 bremworth.co.nz/investor-centre

Carpet Operation bremworth.co.nz; bremworth.com.au

Wool Operation elcodirect.co.nz

Share Registrar computershare.com/nz