FY24 Audited Results Announcement
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Bremworth Limited
Reporting Period 12 months to 30 June 2024
Previous Reporting Period 12 months to 30 June 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$80,294 (10.5%)
Total Revenue $80,294 (10.5%)
Net profit/(loss) from
continuing operations
$4,643 (56.8%)
Total net profit/(loss) $4,643 (56.8%)
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
$0.64 $0.58
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
Mandy Tomkins-Dancey, Chief Financial Officer
Contact person for this
announcement
Greg Smith, Chief Executive Officer,
or
Mark Devlin
Contact phone number +64 21 711 622
or
+64 21 509 060
Contact email address
gregsmith@bremworth.co.nz
Mark@impactpr.co.nz
Date of release through MAP
29 August 2024
Audited financial statements accompany this announcement.
---
Market Release 29 August 2024
Bremworth Reports $4.6m Profit After Tax in Full Year Result
Wool carpet and rug manufacturer Bremworth (NZX: BRW) has reported a $4.6 million profit
after tax as it improves organisational efficiency and launches new carpet ranges.
The company has also signalled a return to dividends by 2026, marking the completion of a
transition away from synthetics to the production of wool carpets and rugs.
Bremworth’s net profit after tax (NPAT) fell from $10.7m to $4.6m in the year ending 30 June
2024 (FY24). Cyclone Gabrielle related insurance income in FY24 totalled $26.5m (FY23
$35.5m), taking insurance proceeds received to date to $62.0m.
Annual revenue also declined $9.4 million to $80.3 million. This reflects the inability to meet
all consumer demand with the severely depleted inventory levels that resulted from the
cyclone’s flooding of the Napier yarn plant at the start of the period. Challenges faced in
accessing yarn at the right quantity also impacted revenue until recently.
While constraints on stock availability saw annual revenue fall, sales from its wool-buying
division, Elco Direct, increased as it increased its share of the wool clip at the farm gate to
drive its volumes up, despite wool volume reducing nationally.
The company is unencumbered by debt and its end-of-year cash balance was $31.6 million,
down $7.7 million from the previous year end, as it invested heavily to lift inventory levels $8.2
million to $29.3 million - in a move designed to rebuild trade confidence and ensure continuity
of supply.
Greg Smith, Bremworth CEO, says the company is emerging from a period of significant
transformation.
“This financial year saw our sales severely constrained as we brought our new supply chain
online - providing the ability to scale our operations significantly.
“As well as increasing stock levels overall, we invested in rebuilding inventory of our top-selling
lines to meet the demand from our trans-Tasman customers and revised our inventory strategy
to increase yarn stock.
“This has enhanced our ability to rapidly adapt to consumer demand, reducing customer wait
times from months to days.
“With the inroads we have made with the hybrid supply chain and the steps underway to
restore our unique yarn-making capability at Napier, we have the opportunity to realise the
demand that was previously unmet and expand our reach into export markets such as the
high-volume, multi-level residential apartments.
“There are dozens of these projects in every city of Australia right now and we have launched
a full-time commercial team in that market dedicated to growing this side of our business.
“Once the hybrid supply model reaches its full potential we will have the capacity to double
production of carpet to grow additional sales with existing and new channel partners in key
markets.
“Over the past year we have substantially removed yarn-making capacity constraints that had
created a bottleneck in our production and we have commercialised four new ranges to launch
in FY25.
“We are looking forward to a new phase of sustained growth,” he says.
Smith says the company is continuing to focus on rebuilding the carpet business to pre-
cyclone capability, with work including ongoing enhancements to the hybrid supply chain and
accelerating the staged reinstatement of yarn-making equipment at Napier.
“The Napier plant made unique yarns that are hard to recreate anywhere in the world, and the
staged reinstatement of machinery will enable Bremworth to scale production of these
distinctive ranges, consistently producing high quality and unique yarns,” he says.
Smith says he expects dividend payments to resume by 2026, or possibly sooner, due to
improved operating performance and structural changes made in FY24.
-Ends-
For further information please contact:
Greg Smith
Chief Executive Officer
gregsmith@bremworth.co.nz
+64 21 711 622
Mark Devlin
Director
IMPACTPR.CO.NZ
+64 21 509 060
---
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
3Directors' Responsibility Statement
4Independent Auditor's Report
10Consolidated Statement of Profit or Loss
11Consolidated Statement of Comprehensive Income
12Consolidated Statement of Changes in Equity
13Consolidated Statement of Financial Position
14Consolidated Statement of Cash Flows
16Notes to the Consolidated Financial Statements
161. Company information
162. General information relating to preparation of consolidated financial statements
203. Cyclone Gabrielle
244. Financial performance
244a. Segment performance
264b. Earnings per share
274c. Revenue from contracts with customers
274d. Other income and gains
274e. Administration expenses
284f. Personnel expenses
284g. Government grants
294h. Finance costs
294i. Income tax
325. Capital and funding
325a. Capital management
325b. Share capital, dividends and reserves
345c. Banking facilities and loans and borrowings
356. Assets employed
356a. Property, plant and equipment
386b. Capital commitments
397. Working capital
397a. Cash and bank
397b. Trade receivables, other receivables and prepayments
407c. Inventories
417d. Trade payables and accruals
417e. Employee entitlements
428. Risks and financial instruments
529. Others
529a. Leases
559b. Share-based payment
569c. Provisions
579d. Contingent liabilities
579e. Related parties
599f. Operating subsidiaries of the Group
599g. Events after balance date
599h. Climate-related disclosures
609i. Standards, interpretations and amendments to standards
2
CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS' RESPONSIBILITY STATEMENT
DIRECTORS' RESPONSIBILITIES
ACCOUNTING POLICIES
ACCOUNTING RECORDS
SAFEGUARDING OF ASSETS AND INTERNAL CONTROLS
CONSOLIDATED FINANCIAL STATEMENTS
The Directors present, on pages 10 to 60, the consolidated financial statements for the year ended 30 June 2024.
T H G Adams
Chair of the Board of Directors
K M Turner
Chair of the Audit Committee
The Directors are responsible for the preparation of the consolidated financial statements of Bremworth Limited and subsidiaries
("the Group"). The Directors discharge this responsibility by ensuring that the consolidated financial statements comply with
Generally Accepted Accounting Practice and fairly present the financial position of the Group as at balance date and of its
operations and cash flows for the year ended on that date.
The Directors consider that the accounting policies used in the preparation of the consolidated financial statements are
appropriate, consistently applied, and supported by reasonable estimates and judgements. All relevant financial reporting and
accounting standards have also been followed.
The Directors believe that proper accounting records, which enable, with reasonable accuracy, the determination of the financial
position of the Group and facilitate the compliance of the consolidated financial statements with the Financial Markets Conduct
Act 2013, have been kept.
The Directors consider that they have taken adequate steps to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide a reasonable assurance
as to the integrity and reliability of the consolidated financial statements.
These audited consolidated financial statements were authorised for issue by the Directors on 28 August 2024 and, as required by
section 461(1)(b) of the Financial Markets Conduct Act 2013, are dated and signed as at that date.
3
Independentauditor’sreport
TotheshareholdersofBremworthLimited
Ouropinion
Inouropinion,theaccompanyingconsolidatedfinancialstatementsofBremworthLimited(the
Company),includingitssubsidiaries(theGroup),presentfairly,inallmaterialrespects,thefinancial
positionoftheGroupasat30June2024,itsfinancialperformanceanditscashflowsfortheyearthen
endedinaccordancewithNewZealandEquivalentstoInternationalFinancialReportingStandards
(NZIFRS)andInternationalFinancialReportingStandardsAccountingStandards(IFRSAccounting
Standards).
Whatwehaveaudited
TheGroup'sconsolidatedfinancialstatementscomprise:
●theconsolidatedstatementoffinancialpositionasat30June2024;
●theconsolidatedstatementofprofitorlossfortheyearthenended;
●theconsolidatedstatementofcomprehensiveincomefortheyearthenended;
●theconsolidatedstatementofchangesinequityfortheyearthenended;
●theconsolidatedstatementofcashflowsfortheyearthenended;and
●thenotestotheconsolidatedfinancialstatements,comprisingmaterialaccountingpolicy
informationandotherexplanatoryinformation.
Basisforopinion
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(NewZealand)(ISAs
(NZ))andInternationalStandardsonAuditing(ISAs).Ourresponsibilitiesunderthosestandardsare
furtherdescribedintheAuditor’sresponsibilitiesfortheauditoftheconsolidatedfinancialstatements
sectionofourreport.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasis
forouropinion.
Independence
WeareindependentoftheGroupinaccordancewithProfessionalandEthicalStandard1International
CodeofEthicsforAssurancePractitioners(includingInternationalIndependenceStandards)(New
Zealand)(PES1)issuedbytheNewZealandAuditingandAssuranceStandardsBoardandthe
InternationalCodeofEthicsforProfessionalAccountants(includingInternationalIndependence
Standards)issuedbytheInternationalEthicsStandardsBoardforAccountants(IESBACode),andwe
havefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.
Otherthaninourcapacityasauditorwehavenorelationshipwith,orinterestsin,theGroup.
Keyauditmatters
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificancein
ourauditoftheconsolidatedfinancialstatementsofthecurrentyear.Thesematterswereaddressed
inthecontextofourauditoftheconsolidatedfinancialstatementsasawhole,andinformingour
opinionthereon,andwedonotprovideaseparateopiniononthesematters.
PricewaterhouseCoopers,PwCTower,15CustomsStreetWest,PrivateBag92162,Auckland1142,NewZealand
T:+6493558000,www.pwc.co.nz
DescriptionofthekeyauditmatterHowourauditaddressedthekeyauditmatter
Insuranceclaimsandproceeds
Asdisclosedinnotes2gand3inthe
consolidatedfinancialstatements,Cyclone
Gabriellebroughtseverefloodingtothe
Napieryarnspinningplant,causingsignificant
damagetothebuilding,plant,equipmentand
inventory.Theresultinginsuranceclaim
processisongoing.
TheGrouphasexercisedprofessional
judgementindeterminingthemostappropriate
treatmentforinsuranceclaims.Significant
judgmentsandestimatesappliedhavebeen
disclosedinnotes2gand3.Theseinvolve
assessingwhetherreceiptoftheinsurance
claimisvirtuallycertain,anddeterminationof
theclaimamountrecordedasincome.Asa
resultthisisakeyauditmatter.
Theconsolidatedfinancialstatementsreflect
thefollowingmaterialimpactsinFY24:
●Insuranceincomeof$26.5million(2023:
$35.5million),whichrelatestoprogress
paymentsreceivedtodate;
●Variousexpensesrelatedtotheongoing
impactofthecyclonedamageof$14.7
million(2023:$14.3million);
●A$1.1millionpartialreversalofthe$7.6m
impairmentrecognisedlastyearfor
inventory,buildingsandplantand
equipment;and
●Disclosureofacontingentasset,noting
thatitisimpracticabletoestimatean
amountbecauseoftheextentof
estimationuncertainty.
ToaudittheimpactofCycloneGabrielle,we
reviewedmanagement’sassessmentof,and
conclusions,ontheaccountingimplications.In
consideringtherecognitionofinsuranceincomeand
disclosureofthecontingentasset,ourprocedures
included:
●Reviewingmanagement’saccountinganalysis;
●Reviewinglatestreportsfrommanagement’s
expertsprovidinganestimatedrangeof
remediationcostsfortheplantandbuildings,
notingthatthesereportsandestimatesare
currentlybeingreviewedbytheinsurers’own
experts;
●Consideringtheavailablereportsoftheinsurers’
lossadjustersandotherrelevant
correspondencewithinsurers;
●Agreeingprogresspaymentstosupporting
documentsandthebankstatement;
●Assessingtheresultingaccountingtreatment
againsttherelevantaccountingstandards,
consideringanycounterfactualinformationor
scenarios;
●Consideringtheclassificationofinsurance
incomeandcyclonerelatedexpensesinthe
consolidatedstatementofprofitorlossand
consolidatedstatementofcashflows;
●Assessingthelikelihoodofprogresspayments
receivedtodatetoberefundable;and
●Consideringtheadequacyoftherelated
financialstatementdisclosures,includingthe
contingentassetdisclosedandchallenging
whetherthiscouldbequantified.
Inaddition,ourproceduresincluded:
●Testing,onasamplebasis,theexpenses
incurredrelevanttotheinsuranceclaim;and
●Assessingthecreditworthinessoftheinsurers.
PwC5
DescriptionofthekeyauditmatterHowourauditaddressedthekeyauditmatter
Valuationofinventory
ThecarryingvalueoftheGroup’sinventoryat
30June2024was$29.3million(30June2023
$21.1million)netofinventoryprovisionsof
$2.6million(30June2023$1.4million).
Thecostoffinishedinventoryreflectsraw
materialsandmanufacturingcosts,including
anallocationofproductionoverheadsbased
onnormaloperatingcapacity.
TheGrouphasrecordedinventoryprovisions,
whichrepresentadeductionfromthecostof
inventory,forobsolete,agedanddiscontinued
inventoryandcarpetoddmentstoreflect
management’sbestestimateoftheirnet
realisablevalue.
Determiningtheseprovisionsinvolves
significantjudgementtoidentifyand
categoriseobsolete,agedanddiscontinued
inventoryconsideringarangeoffactorssuch
asinventoryrationalisationplans,consumer
demandandtrends,availabledistribution
channelsandhistoricalsalesandmargins
data.
Valuationofinventoryisakeyauditmatter
duetothesignificanceoftheinventory
balance,thecomplexityofinventorycosting,
andthejudgementsinvolvedinestimatingthe
inventoryprovisions.
Note7coftheconsolidatedfinancial
statementsdescribestheaccountingpolicyon
inventoriesandthejudgementsandestimates
appliedbymanagementtodeterminethe
inventoryprovision.
Toauditthecostofinventory,ourprocedures
included:
●Gaininganunderstandingoftheinventory
costingprocessandcontrols;
●Testingtheaccuracyoftheapplicationof
inventorycostingbyreperformingthe
calculation;
●Verifyinginputs,onasamplebasis,ofthe
finishedgoods,workinprogress,andyarn
inventorycostbyagreeingthemtosupporting
documents;
●Testingthecostofrawmaterialinventory,ona
samplebasis,tosupplierinvoices;and
●Evaluatingthenatureandappropriatenessof
factoryoverheadscapitalisedintoinventory,
basedonnormaloperatingcapacity,andtesting
themathematicalaccuracyoftheoverhead
allocationcalculation.
Toaudittheinventoryprovisions,ourprocedures
included:
●Gaininganunderstandingof,andassessing,
theGroup’sinventoryprovisioningprocessand
relatedcontrols,takingintoconsiderationkey
attributesusedsuchaspiecesizes,grade
quality,discontinuedproductsandrecentsale
prices;
●Reviewingmanagement’sanalysisofthepartial
reversalofpreviouslyrecognisedimpairmentof
CycloneGabrielledamagedandcontaminated
inventory;
●Observingmanagement’sstocktakeprocessby
attendingselectedlocationstoconfirmthe
existenceandconditionoftheinventory;
●Assessingtheaccuracyofmanagement’s
estimateofprovisioningbycomparingactual
utilisationoftheprovisionwiththe
correspondingprioryearprovisions;and
●Testingthenetrealisablevalueoffinished
goods,onasamplebasis,bycomparingthe
carryingvaluewithrecentsalespricesand
margins.
PwC6
Ourauditapproach
Overview
Overallgroupmateriality:$800,000,whichrepresents1%oftotal
revenue.
Wechosetotalrevenuesasthebenchmarkbecause,inourview,itis
akeyfinancialstatementmetricusedinassessingtheperformanceof
theGroupanditisagenerallyacceptedbenchmark.
WeselectedtransactionsandbalancestoauditbasedontheGroup’s
materiality.Byusingthisapproach,weauditedallthematerialclasses
oftransactionsandbalancesintheconsolidatedfinancialstatements
oftheGroup.
Asreportedabove,wehavetwokeyauditmatters,being:
●Insuranceclaimsandproceeds
●Valuationofinventory
Aspartofdesigningouraudit,wedeterminedmaterialityandassessedtherisksofmaterial
misstatementintheconsolidatedfinancialstatements.Inparticular,weconsideredwhere
managementmadesubjectivejudgements;forexample,inrespectofsignificantaccountingestimates
thatinvolvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Asinall
ofouraudits,wealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingamong
othermatters,considerationofwhethertherewasevidenceofbiasthatrepresentedariskofmaterial
misstatementduetofraud.
Materiality
Thescopeofourauditwasinfluencedbyourapplicationofmateriality.Anauditisdesignedtoobtain
reasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreefrommaterial
misstatement.Misstatementsmayariseduetofraudorerror.Theyareconsideredmaterialif,
individuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsof
userstakenonthebasisoftheconsolidatedfinancialstatements.
Basedonourprofessionaljudgement,wedeterminedcertainquantitativethresholdsformateriality,
includingtheoverallGroupmaterialityfortheconsolidatedfinancialstatementsasawholeassetout
above.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofouraudit,
thenature,timingandextentofourauditproceduresandtoevaluatetheeffectofmisstatements,both
individuallyandinaggregate,ontheconsolidatedfinancialstatementsasawhole.
Howwetailoredourgroupauditscope
Wetailoredthescopeofourauditinordertoperformsufficientworktoenableustoprovideanopinion
ontheconsolidatedfinancialstatementsasawhole,takingintoaccountthestructureoftheGroup,the
accountingprocessesandcontrols,andtheindustryinwhichtheGroupoperates.
Otherinformation
TheDirectorsareresponsiblefortheotherinformation.Theotherinformationcomprisesthe
informationincludedintheAnnualreport,butdoesnotincludetheconsolidatedfinancialstatements
andourauditor'sreportthereon.TheAnnualreportisexpectedtobemadeavailabletousafterthe
dateofthisauditor'sreport.
PwC7
Ouropinionontheconsolidatedfinancialstatementsdoesnotcovertheotherinformationandwewill
notexpressanyformofauditopinionorassuranceconclusionthereon.
Inconnectionwithourauditoftheconsolidatedfinancialstatements,ourresponsibilityistoreadthe
otherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistent
withtheconsolidatedfinancialstatementsorourknowledgeobtainedintheaudit,orotherwise
appearstobemateriallymisstated.
Whenwereadtheotherinformationnotyetreceived,ifweconcludethatthereisamaterial
misstatementtherein,wearerequiredtocommunicatethemattertotheDirectorsanduseour
professionaljudgementtodeterminetheappropriateactiontotake.
ResponsibilitiesoftheDirectorsfortheconsolidatedfinancialstatements
TheDirectorsareresponsible,onbehalfoftheCompany,forthepreparationandfairpresentationof
theconsolidatedfinancialstatementsinaccordancewithNZIFRSandIFRSAccountingStandards,
andforsuchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationof
consolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudor
error.
Inpreparingtheconsolidatedfinancialstatements,theDirectorsareresponsibleforassessingthe
Group’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoing
concernandusingthegoingconcernbasisofaccountingunlesstheDirectorseitherintendtoliquidate
theGrouportoceaseoperations,orhavenorealisticalternativebuttodoso.
Auditor’sresponsibilitiesfortheauditoftheconsolidatedfinancialstatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhethertheconsolidatedfinancial
statements,asawhole,arefreefrommaterialmisstatement,whetherduetofraudorerror,andto
issueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,
butisnotaguaranteethatanauditconductedinaccordancewithISAs(NZ)andISAswillalways
detectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandare
consideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluence
theeconomicdecisionsofuserstakenonthebasisoftheseconsolidatedfinancialstatements.
Afurtherdescriptionofourresponsibilitiesfortheauditoftheconsolidatedfinancialstatementsis
locatedattheExternalReportingBoard’swebsiteat:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Thisdescriptionformspartofourauditor’sreport.
PwC8
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Philippa (Pip)
Cameron.
For and on behalf of:
Chartered AccountantsAuckland
28 August 2024
PwC9
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
Note$000 $000
Revenue from contracts with customers4c80,294 89,689
Cost of sales(60,812)(64,967)
Gross profit19,482 24,722
Other income and gains4d531 540
Distribution expenses(14,991)(16,183)
Administration expenses4e(13,216)(11,118)
Cyclone Gabrielle related insurance income3a26,500 35,500
Cyclone Gabrielle related expenses3d(14,666)(14,275)
Cyclone Gabrielle related asset write offs3d(297)(7,644)
Cyclone Gabrielle related asset write offs reversed3d1,082 -
4,425 11,542
Finance costs4h(825)(1,045)
Finance income1,344 502
Profit before income tax4,944 10,999
Income tax expense4i(301)(263)
Profit after tax for the year$4,643 $10,736
Basic earnings per share (cents)4b6.63 15.39
Diluted earnings per share (cents)4b6.53 15.04
This Consolidated Statement of Profit or Loss is to be read in conjunction with the notes on pages 16 to 60.
10
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
$000 $000
Profit after tax for the year4,643 10,736
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)(1,167)1,088
Net change in fair value of cash flow hedges transferred to profit or loss (net of income tax)607 426
Total other comprehensive (loss)/income(560)1,514
Total comprehensive income for the year$4,083 $12,250
This Consolidated Statement of Comprehensive Income is to be read in conjunction with the notes on pages 16 to 60.
11
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Share
Capital
Cash Flow
Hedging
Reserve
Foreign
Currency
Translation
Reserve
Share-
based
Payment
Reserve
Retained
Earnings
Total
Equity
Note$000 $000 $000 $000 $000 $000
Total equity at 1 July 202322,054 938 (1,420)615 28,036 50,223
Total comprehensive income for the year
Profit after tax- - - - 4,643 4,643
- (560)- - - (560)
Total comprehensive income for the year- (560)- - 4,643 4,083
9b- - - 117 - 117
Total transaction with owners for the year- - - 117 - 117
Total equity at 30 June 2024$22,054 $378 $(1,420)$732 $32,679 $54,423
Total equity at 1 July 202222,054 (576)(1,420)413 17,300 37,771
Total comprehensive income for the year
Profit after tax- - - - 10,736 10,736
- 1,514 - - - 1,514
Total comprehensive income for the year- 1,514 - - 10,736 12,250
9b- - - 202 - 202
Total transaction with owners for the year- - - 202 - 202
Total equity at 30 June 2023$22,054 $938 $(1,420)$615 $28,036 $50,223
This Consolidated Statement of Changes in Equity is to be read in conjunction with the notes on pages 16 to 60.
Other comprehensive income that may be
reclassified subsequently to profit or loss
Other comprehensive income that may be
reclassified subsequently to profit or loss
Share-based payments - value of
employee services
Share-based payments - value of
employee services
Changes in fair value of cash flow
hedges (net of income tax)
Changes in fair value of cash flow
hedges (net of income tax)
Transaction with owners in their
capacity as owners
Transaction with owners in their
capacity as owners
12
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
2024 2023
Note$000 $000
ASSETS
Property, plant and equipment - owned6a13,241 10,148
Property, plant and equipment - right-of-use9a8,804 8,616
Intangible assets61 86
Deferred tax asset4i402 576
Total non-current assets22,508 19,426
Cash and bank7a31,645 39,319
Trade receivables, other receivables and prepayments7b10,661 9,957
Inventories7c29,348 21,122
Advances to employees181 170
Derivative financial instruments8508 1,017
Income tax receivable67 125
Total current assets72,410 71,710
Total assets$94,918 $91,136
EQUITY
Share capital5b22,054 22,054
Cash flow hedging reserve5b378 938
Foreign currency translation reserve5b(1,420)(1,420)
Share-based payment reserve5b, 9b732 615
Retained earnings32,679 28,036
Total equity54,423 50,223
LIABILITIES
Lease liabilities9a16,508 16,742
Employee benefits488 666
Provisions9c812 819
Total non-current liabilities17,808 18,227
Trade payables and accruals7d16,350 14,948
Customer deposits4c139 192
Employee benefits46 38
Employee entitlements7e3,726 4,877
Lease liabilities9a1,417 1,296
Provisions9c694 816
Derivative financial instruments817 16
Deferred income4g298 503
Total current liabilities22,687 22,686
Total liabilities40,495 40,913
Total equity and liabilities$94,918 $91,136
This Consolidated Statement of Financial Position is to be read in conjunction with the notes on pages 16 to 60.
13
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
Note$000 $000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers80,797 91,200
Cash paid to suppliers and employees(91,623)(88,548)
(10,826)2,652
Government grants received326 582
Other receipts8 5
GST refunded822 1,191
Interest paid - loans and borrowings(3)(166)
Interest component of lease payments9a(822)(879)
Interest received1,264 503
Income tax paid(69)(154)
Cyclone Gabrielle related expenses3d(17,985)(10,803)
Net cash flow from operating activities(27,285)(7,069)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant and equipment- 44
Acquisition of plant and equipment6a(4,040)(1,956)
Maturities of short term deposits19,500 11,019
Investments in short term deposits(17,000)(14,519)
Advances to employees pursuant to the Bremworth Equity Plan(11)(10)
Cyclone Gabrielle related insurance income3a25,015 35,500
Net cash flow from investing activities23,464 30,078
CASH FLOWS FROM FINANCING ACTIVITIES
Principal component of lease payments9a(1,358)(2,051)
Net cash flow from financing activities(1,358)(2,051)
Net (decrease)/increase in cash and cash equivalents(5,179)20,958
Cash and cash equivalents at beginning of the year31,819 10,874
Effect of exchange rate changes on cash5 (13)
Cash and cash equivalents at end of the year$26,645 $31,819
This Consolidated Statement of Cash Flows is to be read in conjunction with the notes on pages 16 to 60.
14
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
2024 2023
Note$000 $000
Profit after tax for the year4,643 10,736
Add/(Deduct) non-cash items:
Depreciation - owned assets6a858 820
Depreciation - right-of-use assets9a1,057 994
Amortisation - intangible assets25 25
Impairment of buildings and plant and equipment3d297 5,170
Reversal of impairment of fixed assets and inventory3d(208)-
Share-based payments - value of employee services9b117 202
Deferred tax174 (44)
Net gain on sale of plant and equipment- (30)
Net (gain)/loss on foreign currency balance(5)13
Add/(Deduct) Cyclone Gabrielle related cash items:
Cyclone Gabrielle related insurance income3a, 3e(25,015)(35,500)
Changes in working capital items:
Trade receivables, other receivables and prepayments(704)2,243
Inventories(8,226)6,141
Income tax receivable58 153
Trade payables and accruals1,402 2,739
Customer deposits(53)(11)
Employee benefits and entitlements(1,321)(568)
Provisions(129)(64)
Deferred income(205)85
Derivative financial instruments(50)(173)
Net cash flow from operating activities$(27,285)$(7,069)
This Consolidated Statement of Cash Flows is to be read in conjunction with the notes on pages 16 to 60.
15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1COMPANY INFORMATION
The principal activities of the Group comprise wool acquisition, and carpet and rug manufacturing and sales.
All Group subsidiaries are wholly-owned.
2GENERAL INFORMATION RELATING TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
2aSTATEMENT OF COMPLIANCE
2bBASIS OF PREPARATION
The consolidated financial statements presented are for Bremworth and its subsidiaries ("the Group”) as at, and for the year
ended, 30 June 2024.
The Company is registered under the Companies Act 1993 and is an FMC reporting entity for the purposes of the Financial
Reporting Act 2013 and the Financial Markets Conduct Act 2013. The consolidated financial statements have been
prepared in accordance with these Acts.
The consolidated financial statements comply with New Zealand equivalents to International Financial Reporting Standards
(NZ IFRS), other applicable New Zealand accounting standards and authoritative notices as appropriate for Tier 1 For-Profit
entities. The consolidated financial statements also comply with International Financial Reporting Standards Accounting
Standards (IFRS Accounting Standards).
The consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice (NZ GAAP) as appropriate for Tier 1 For-Profit entities.
They have been prepared on the historical cost basis, except for derivative financial instruments which are measured at fair
value as disclosed at note 8 (Risks and financial instruments) to the consolidated financial statements.
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in New Zealand dollars, which is Bremworth Limited's functional and presentation currency. Unless otherwise
indicated, all financial information presented in New Zealand dollars has been rounded to the nearest thousand.
The Consolidated Statements of Profit or Loss, Comprehensive Income, Changes in Equity and Cash Flows are stated
exclusive of GST. All items in the Consolidated Statement of Financial Position are stated exclusive of GST, except for trade
receivables and trade payables, which include GST invoiced.
Bremworth Limited ("Bremworth" or "the Company") is a limited liability company that is domiciled and incorporated in New
Zealand.
16
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
2GENERAL INFORMATION RELATING TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2cGOING CONCERN
The Board expects that existing cash and bank are sufficient to enable the Group’s continued operation.
2dCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND MATERIAL ACCOUNTING POLICIES
Note 3 – impact of Cyclone Gabrielle
Note 4i – measurement and recoverability of tax losses
Note 6a – recoverability of property, plant and equipment
Note 7c – inventory provisioning
Note 9a – determination of lease term
Note 9c – measurement of provisions
Accounting policiesEstimates, judgements and assumptions
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 short term deposits at balance date of $31.6 million (2023: $39.3 million) is less than the previous year, reflecting
the investment in rebuilding inventory levels which were depleted following Cyclone Gabrielle as the Group transitioned to a
hybrid supply chain; and for Cyclone Gabrielle related expenses.
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 forecast the Group’s financial performance, cash flows and financial position
(to June 2029) as part of its management and monitoring of the Group’s operations.
During the year, a Board-led strategic review involving external consultants, was conducted. The review examined the
Group’s business plan and forecasts under the new hybrid supply chain model. Analysis included the examination of
financial forecasts and downside sensitivities.
The Board considers that although there are uncertainties relating to these forecasts, these uncertainties are not significant
enough to lead to a material uncertainty relating to going concern.
The preparation of the consolidated financial statements in conformity with NZ IFRS requires the Directors to make
estimates, judgements and assumptions that affect the application of accounting policies and reported amounts of assets,
liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates.
Information about estimates and judgements that have a material effect on the amounts recognised in the consolidated
financial statements are disclosed in the following notes:
Material accounting policies and critical estimates, judgements and assumptions are also disclosed in the relevant notes to
the consolidated financial statements and identified using the following coloured boxes:
Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods
affected.
17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
2GENERAL INFORMATION RELATING TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2eBASIS OF CONSOLIDATION
2fCHANGES IN ACCOUNTING POLICIES
There were no changes in accounting policies during the year ended 30 June 2024.
2gIMPACT OF CYCLONE GABRIELLE
Progress since the issue of the consolidated financial statements for the year ended 30 June 2023
Buildings, plant and equipment
People
These options included voluntary redundancy or expressions of interest for redeployment to the Whanganui plant.
The cost of voluntary redundancy is $1.4 million.
18 waged and seven salaried employees either did not take up the offer, or were not eligible, for voluntary redundancy and
are continuing to be employed by the Group.
This review led to the reinstatement of the dyehouse which commenced operation in January 2024 following successful
production commissioning as well as regulatory compliance and health and safety sign off.
Further items of key plant and equipment at the Napier plant, including yarn twisting and finishing, are also in the process of
being reinstated.
The Group, having confirmed that the Napier yarn spinning plant would be offline for a considerable, but yet to be
determined, period of time and having established that staff at the Napier plant were looking for more certainty around their
future, presented several options to employees, while also putting in place various programmes aimed at providing career
and financial advice, as well as emotional support, for all affected staff.
110 waged and eight salaried employees opted for voluntary redundancy. While some employees did consider
redeployment to the Whanganui plant, these did not work out for personal reasons.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Group as at 30 June
2024 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities over which the Company has
control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised losses are also eliminated unless the underlying intra-group
transaction provides evidence that the asset transferred is impaired.
With site clean-up completed and buildings and plant and equipment stabilised to prevent further deterioration early in the
2024 financial year, the Group commenced a review of the options in relation to the future of the Napier plant while also
considering the findings of the Board-led strategic review in relation to the hybrid yarn supply chain.
The reinstatement of the dyehouse and other items of key plant and equipment will further address the gaps that have been
identified in the new hybrid supply chain, putting the Group in a strong position to provide the carpet business with ongoing
access to woollen yarns and dyed fibre while also insulating it from future events that could potentially disrupt operations.
18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
2GENERAL INFORMATION RELATING TO PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2gIMPACT OF CYCLONE GABRIELLE (continued)
Insurance
The Group has comprehensive insurance cover against the damage and losses arising from Cyclone Gabrielle.
-
-
-the significant reduction in revenue as a consequence of the disruptions to the business following Cyclone Gabrielle;
-
-the significant ongoing costs, including payroll costs, incurred by the business.
the acknowledgement by the loss adjusters acting for the insurers that significant damage had occurred to the Napier
plant and that the claim would be significant;
The insurers have acknowledged the cyclone event and confirmed that the Group’s material damage policy would cover the
damage to buildings and plant and equipment as well as loss of inventory. At the same time, the business interruption policy
(which provides for an indemnity period of 18 months from the date of loss through to 13 August 2024) would respond to the
impact of reduction in turnover and the additional costs incurred as a result of consequent disruptions to the business over
that 18 month-period.
The insurance claims process is continuing to progress, with the Group securing further progress payments of $26.5 million
from its insurers during the year ended 30 June 2024, bringing total progress payments since the cyclone to $62.0 million.
These progress payments were 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 would be promptly refunded to the insurers.
the latest estimated reinstatement costs of $85.9 million for buildings and plant and equipment put forward by the
independent quantity surveyor appointed by the Company plus a further $7.4 million for site clean-up and asset
stabilisation and another $1.6 million for loss of inventory;
the additional costs incurred in activating the risk mitigation and business continuity plans – including the additional
costs of sourcing yarns; and
The claims process is complex. It will take time to resolve both material damage and business interruption claims, 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 on both claims.
However, the Group expects that the final adjusted loss under both policies would exceed the progress payments to date,
given:
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
3CYCLONE GABRIELLE
Dealing with impact of Cyclone Gabrielle in the consolidated financial statements
2024 2023
Impact of Cyclone GabrielleNote$000 $000
3a26,500 35,500
Not applicable3b- -
Not applicable3c- -
3d(1,002)(6,353)
3d(4,410)(5,349)
3d(4,372)(2,573)
3d(3,457)-
Cost of voluntary redundancies incurred3d(1,425)-
3d(297)(5,170)
3d208 -
3d- (2,474)
3d874 -
$12,619 $13,581
Accounting policies
Other additional costs incurred to avoid loss of
revenue that have also been recognised as
expenses
Cyclone Gabrielle related expenses
Insurance proceeds recognised as contingent
assets
Cyclone Gabrielle related expenses
Plant and equipment previously derecognised
and subsequently reinstated
Damaged or destroyed buildings and plant and
equipment derecognised to the extent
appropriate
Cyclone Gabrielle related asset write
offs
Insurance proceeds are recognised as income and as a receivable when receipt is virtually certain and to the extent that
the amount can be reliably estimated.
In the event that insurance proceeds cannot be recognised as income and as a receivable because receipt is not virtually
certain and/or the amount cannot be reliably estimated, they are disclosed as contingent assets.
The following table summarises the impact of Cyclone Gabrielle on the Group and how these have been dealt with in the
consolidated financial statements:
Cyclone Gabrielle related expenses
Cyclone Gabrielle related expenses
Cyclone Gabrielle related insurance
income
Ongoing costs as a result of the cyclone as well
as professional fees (including claims
preparation costs) incurred that have been
recognised as expenses
Damaged or destroyed inventory written off to
the extent appropriate
Cyclone Gabrielle related asset write
offs
Cyclone Gabrielle related expenses
Consolidated Statement of Profit or
Loss line item
Insurance proceeds secured and recognised
as income
Further insurance proceeds recognised as
income and as a receivable where receipt is
virtually certain and amount is able to be
reliably estimated
Site clean-up, asset stabilisation and waste
disposal costs incurred recognised as
expenses
Cyclone Gabrielle related asset write
offs reversed
Inventory previously written off and
subsequently reinstated
Cyclone Gabrielle related asset write
offs reversed
Ongoing payroll costs recognised as expenses
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
3CYCLONE GABRIELLE (continued)
Estimates, judgements and assumptions
These estimates and judgements include the following:
-recognition of insurance income (note 3a)
-estimation of further insurance proceeds as income (note 3b)
-assessment of and disclosure of contingent assets (note 3c)
-assessment of impairment of buildings, plant and equipment and inventory (note 3d)
Details of the estimates and judgements made are further discussed below where relevant.
3aCYCLONE GABRIELLE RELATED INSURANCE INCOME
2024 2023
$000 $000
Insurance recovery - progress payments$26,500 $35,500
Cyclone Gabrielle related insurance income is made up entirely of insurance recovery progress payments.
3bESTIMATION OF FURTHER INSURANCE PROCEEDS AS INCOME
-
-
-the insignificant counterparty credit risks.
The Group agreed to two further progress payments totalling $26.5 million with its insurers during the year ended 30 June
2024, with $25.0 million received prior to balance date and $1.5 million received after balance date (2023: two progress
payments totalling $35.5 million, with all $35.5 million received before balance date).
As a result of the Cyclone Gabrielle flooding event, a number of material estimates and judgements have been necessary
to determine the accounting treatment in these consolidated financial statements.
The Group expects that the total progress payments recognised to date of $62.0 million will not be required to be refunded
because it expects that the final adjusted loss under both policies would exceed the progress payments to date as
discussed in note 2g (Impact of Cyclone Gabrielle) to the consolidated financial statements.
The Group’s expectation is that the ultimate amount received will be larger than the $62.0 million progress payments agreed
to date for the following reasons:
the substantially greater estimated costs of remediation under the material damage policy as discussed in note 2g
(Impact of Cyclone Gabrielle) to the consolidated financial statements and note 3a above;
the loss adjusters having acknowledged the cyclone as an insured event and the indemnity owed to the Group under
the policies;
All progress payments were agreed with the insurers as non-specific to either material damage or business interruption at
this stage.
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
3CYCLONE GABRIELLE (continued)
3bESTIMATION OF FURTHER INSURANCE PROCEEDS AS INCOME (continued)
-
-
-the extent of the reduction in revenue as a consequence of the interruptions to the business following Cyclone Gabrielle.
As a consequence, no further insurance proceeds have been recognised for the current financial year.
3cCONTINGENT ASSETS
These estimates and judgements will continue to be reviewed as new information becomes available.
3dCYCLONE GABRIELLE RELATED ASSET WRITE OFFS AND EXPENSES
2024 2023
Note$000 $000
Write off of buildings6a- (3,608)
6a(297)(1,562)
6a208 -
Write off of inventory7c- (2,474)
Inventory previously written off and subsequently reinstated7c874 -
Other recoverable expenses2g(14,666)(14,015)
Non-recoverable expenses2g- (260)
$(13,881)$(21,919)
Plant and equipment, other assets and assets under construction
previously written off and subsequently reinstated
While the Group has a contingent asset at balance date, being the probable receipt of further insurance proceeds under the
material damage and business interruption policies, the Group has not provided an estimate of the contingent asset
because it has determined, based on the estimation uncertainties discussed at note 3b (Estimation of further insurance
proceeds as income) to the consolidated financial statements, that it is not practicable to do so.
Because the insurance claims process is complex and expected to take a number of months to complete, it is possible that
the actual financial impacts will differ from those included in these consolidated financial statements and these differences
may be material.
the assumptions adopted by the independent quantity surveyor in estimating the latest reinstatement costs for
buildings and plant and equipment;
the approach proposed to be taken by the Company in relation to the reinstatement and whether key assets can be
repaired or alternatively must be replaced; and
However, the total amount cannot currently be estimated with sufficient reliability because the claims process is complex,
and it will take time to resolve. A number of issues have yet to be worked through between the parties on both material
damage and business interruption policies, with these issues including, but not limited to:
Write off of plant and equipment, other assets and assets under
construction
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
3CYCLONE GABRIELLE (continued)
3dCYCLONE GABRIELLE RELATED ASSET WRITE OFFS AND EXPENSES (continued)
Cyclone Gabrielle related asset write offs and expenses consist of:
Write off of buildings and plant and equipment, other assets and assets under construction
Refer also to note 6a (Property, plant and equipment) to the consolidated financial statements for further information.
Write off of inventory
Refer also to note 7c (Inventories) to the consolidated financial statements for further information.
Other costs
The Group incurred costs totalling $14.7 million during the year (2023: $14.3 million).
3ePROGRESS PAYMENTS RECEIVED
2024 2023
$000 $000
Insurance recovery progress payments recognised26,500 35,500
Less insurance recovery progress payments received prior to balance date(25,015)(35,500)
Insurance recovery progress payments received after balance date$1,485 -
As a result, the carrying values of these assets were written off to the Consolidated Statement of Profit or Loss for the year
ended 30 June 2023.
Based on the analysis and estimates prepared by management, the Group determined in the previous financial year ended
30 June 2023 that the carrying value of inventory at the Napier plant at the time of the cyclone of $2.5 million was required to
be written off.
A breakdown of these costs can be found in note 2g (Impact of Cyclone Gabrielle) to the consolidated financial statements.
These costs are recoverable from the proceeds of insurance except for $0.3 million of non-recoverable costs in the prior
year.
Where the cost of inventory may not be recoverable because the inventory is damaged as a consequence of an event like
Cyclone Gabrielle, the Group is required to estimate its recoverable amount and recognise an impairment if this estimate is
less than the carrying amount.
In the current financial year, $0.9 million of the inventory that was originally thought to be contaminated by virtue of their
proximity to flood water was found to be suitable for processing into finished carpet, after inspection and review, and this
amount was reinstated into inventory with a corresponding credit recognised in the Consolidated Statement of Profit or
Loss.
Following impairment assessment of damaged buildings and plant and equipment, the Group determined in the previous
financial year ended 30 June 2023 that the carrying values of buildings of $3.6 million and plant and equipment of $1.6
million at the Napier plant at the time of the cyclone were required to be derecognised on the basis that there were no longer
any future economic benefits that could be derived from their use in their current state or from their disposal.
Ongoing assessments of assets in the current financial year resulted in derecognition of a further $0.3 million of plant and
equipment and a reversal of $0.2 million of plant and equipment previously derecognised.
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE
4aSEGMENT PERFORMANCE
Reportable segments
The Group’s reportable and operating segments are:
-
-
An operating segment is a component of the Group:
-
-
-for which discrete financial information is available.
Inter-segment transactions
Inter-segmental sales during the year and intercompany profits on stocks at balance date are eliminated on consolidation.
Geographical areas
2024 2023
$000 $000
Revenue
New Zealand51,274 50,637
Australia27,314 37,027
Canada883 1,231
USA753 761
Rest of the world70 33
$80,294 $89,689
As at As at
30 June 202430 June 2023
$000 $000
Non-current assets
New Zealand21,547 18,329
Australia961 1,097
$22,508 $19,426
This section deals with the financial performance of the Group and addresses, among other things, the financial
performance of the Group’s reportable segments and the key areas that impact on the Group’s profitability, including
operating revenue, other income, gains/losses on sale of property, plant and equipment, expenses and taxation.
Carpet, with this segment involved in the manufacturing and sales of carpet and rugs in New Zealand, Australia and
rest of the world; and
Wool, with this segment involved in the acquisition of wool for the carpet segment and for sales to external customers
in New Zealand.
that engages in business activities from which it may earn revenues and incur expenses, including revenues and
expenses that relate to transactions with any of the Group’s other components;
whose operating results are regularly reviewed by the Group’s chief operating decision maker - in this case, the Chief
Executive Officer - to make decisions about the resources to be allocated to the segment and to assess its
performance; and
The Chief Executive Officer uses total revenue, segment result before depreciation, restructuring and impairment and
segment result after depreciation but before restructuring and impairment to assess the performance of the operating
segments. Total assets and total liabilities are also reviewed for the operating segments.
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.
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4aSEGMENT PERFORMANCE (continued)
Major customers
None of the Group’s external customers contributed revenues in excess of 10% of the Group’s total revenues.
2024 2023 2024 2023 2024 2023
$000 $000 $000 $000 $000 $000
External revenue57,081 71,502 23,213 18,187 80,294 89,689
Inter-segment revenue- - 2,336 1,634 2,336 1,634
Total revenue57,081 71,502 25,549 19,821 82,630 91,323
Elimination of inter-segment revenue(2,336)(1,634)
Consolidated revenue$80,294 $89,689
(6,092)(52)1,386 766 (4,706)714
Depreciation - owned assets(698)(649)(160)(171)(858)(820)
Depreciation - right-of-use assets(911)(862)(146)(132)(1,057)(994)
Amortisation - intangibles(25)(25)- - (25)(25)
(7,726)(1,588)1,080 463 (6,646)(1,125)
Cyclone Gabrielle related insurance income26,500 35,500 - - 26,500 35,500
Cyclone Gabrielle related expenses(14,666)(14,275)- - (14,666)(14,275)
Cyclone Gabrielle related asset write offs(297)(7,644)- - (297)(7,644)
1,082 - - - 1,082 -
Segment result4,893 11,993 1,080 463 5,973 12,456
Elimination of inter-segment profits(21)14
Unallocated corporate costs(1,527)(928)
Results from operating activities4,425 11,542
Finance costs(825)(1,045)
Finance income1,344 502
Profit before income tax4,944 10,999
Income tax expense(301)(263)
Profit after tax for the year$4,643 $10,736
Segment result before insurances
Carpet and rugs sales
and manufacturing Wool acquisition Total
Cyclone Gabrielle related asset impairment
reversed
Segment result before depreciation and
insurances
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4aSEGMENT PERFORMANCE (continued)
2024 2023 2024 2023 2024 2023
$000 $000 $000 $000 $000 $000
Reportable segment assets57,590 46,846 5,683 4,971 63,273 51,817
Unallocated assets - Cash and bank31,645 39,319
Total assets$94,918 $91,136
Capital expenditure3,969 1,956 178 - $4,147 $1,956
Reportable segment liabilities20,607 21,290 1,963 1,585 22,570 22,875
Unallocated liabilities - Lease liabilities17,925 18,038
Total liabilities$40,495 $40,913
4bEARNINGS PER SHARE
Basic earnings per share (Basic EPS)
2024 2023
Profit after tax attributable to shareholders of the Company ($000)4,643 10,736
Weighted average number of ordinary shares outstanding
70,069,426 69,771,837
Basic EPS (cents)6.63 15.39
Diluted earnings per share (Diluted EPS)
2024 2023
Profit after tax attributable to shareholders of the Company ($000)4,643 10,736
Weighted average number of ordinary shares outstanding and potential ordinary shares
71,069,426 71,364,576
Diluted EPS (cents)6.53 15.04
In calculating the diluted earnings per share, the Company has taken into account the maximum number of shares that the
employees could be issued with under the Company's 2022 LTI Scheme and the Bremworth Share Option Scheme as further
discussed at note 9b (Share-based payment) to the consolidated financial statements.
Carpet and rugs sales
and manufacturing Wool acquisition Total
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4cREVENUE FROM CONTRACTS WITH CUSTOMERS
2024 2023
$000 $000
Sales of goods
Carpet55,426 70,235
Rugs1,209 1,122
Wool23,213 18,187
Other446 145
Total revenue$80,294 $89,689
Accounting policies
4dOTHER INCOME AND GAINS
2024 2023
Note$000 $000
Government grants recognised4g523 505
Net gain on sale of plant and equipment- 30
Other8 5
Total other income and gains$531 $540
4eADMINISTRATION EXPENSES
The following items of expenditure are included in administration expenses:
2024 2023
$000 $000
Donations- 1
Total fees paid and payable to auditors
Audit fees and expenses paid and payable for audit of consolidated financial statements613 564
Non-audit fees paid and payable for strategic options analysis- 15
Total fees paid and payable$613 $579
Credit terms for carpet and rug sales through wholesale distribution channels within New Zealand and Australia are
generally no later than 30 days after the month in which invoices are raised and, in the case of wool sold in New Zealand,
within 14 days of invoice date or on despatch whichever is the earlier. Credit terms for sales of carpet overseas are generally
60 to 90 days from date of invoice and for sales of carpet yarn overseas 120 days from date of invoice.
Rugs sold through direct to consumer channels are for cash, with payment at the time orders are placed. All amounts
received are accounted for as customer deposits in the first instance, with $139,000 of customers deposits booked as at
balance date (2023: $192,000).
Revenue is recognised when or as performance obligations are satisfied by transferring control of the products sold to the
customer at the transaction price specified in the contract. Control transfers to the customers for carpet, rug and carpet
yarn sales on delivery of the goods to the customer. For wool sales, control passes on the earlier of payment or delivery.
The transaction price includes all amounts which the Group expects to be entitled to, net of goods and services tax and
other indirect taxes, expected rebates and discounts.
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4fPERSONNEL EXPENSES
2024 2023
Note$000 $000
Directors’ fees9e387 387
Wages, salaries, bonuses, holiday pay and termination payments28,170 31,663
Other employee related costs1,377 1,372
Employee benefits803 1,033
Increase/(Decrease) in liability for retiring allowances and long service leave8 (15)
Total personnel expenses$30,745 $34,440
Personnel expenses include restructuring costs of $1,073,000 (FY23: Nil).
4gGOVERNMENT GRANTS
Sustainable Food and Fibre Futures Fund and Waste Minimisation Fund
There are no unfulfilled conditions or other contingencies attaching to the grants recognised in other income during the year.
Accounting policies
Government grants that have been deferred, either because they relate to future costs to be incurred or assets, totalled
$298,000 at balance date (2023: $503,000).
Personnel costs are included in cost of sales, distribution expenses and administration expenses in the Consolidated
Statement of Profit or Loss.
Employee benefits include those benefits provided to employees as part of their employee arrangements with the Group
and cover the provision of motor vehicles, income protection insurances, life insurances, medical insurances and associated
fringe benefits taxes. Employee benefits also include the costs of providing on-site staff amenities.
Notes 4d (Other income and gains) and 4g (Government grants) to the consolidated financial statements provide further
information on how the Group accounts for government grants.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the Group will
comply with all attached conditions and the grants will be received.
Government grants relating to costs that have been incurred are credited to profit or loss while grants relating to future
costs are included in current liabilities as deferred income and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as
deferred income and they are credited to profit or loss on a straight-line basis over the expected lives of the related assets.
Grants of $412,000 (2023: $384,000) from the Sustainable Food and Fibre Futures Fund (SFFF Fund) and $111,000 (2023: Nil)
from the Waste Minimisation Fund (WMF Fund) are included in other income in the Consolidated Statement of Profit or Loss.
The funds cover pre-approved activities over the periods from December 2020 to June 2024 and January 2023 to June 2024
respectively. The prior year also included grants totalling $121,000 from the Government’s International Growth Fund (IG
Fund) with the fund covering pre-approved activities over the period from May 2019 to January 2023.
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4hFINANCE COSTS
2024 2023
$000 $000
Interest component of lease payments(822)(879)
Facility fees - Bank guarantees(3)(166)
Finance costs$(825)$(1,045)
Accounting policies
4iINCOME TAX
2024 2023
$000 $000
Income tax expense in the Consolidated Statement of Profit or Loss
Current tax expense
Current year127 175
Adjustment for prior years- 132
127 307
Deferred tax expense/(benefit)
Origination and reversal of temporary differences174 (44)
174 (44)
Income tax expense$301 $263
Reconciliation of effective tax rate
Profit after tax for the year4,643 10,736
Income tax expense301 263
Profit excluding income tax$4,944 $10,999
Income tax using the Company’s domestic tax rate of 28% (2023: 28%)1,384 3,080
Non-deductible expenses(253)(13)
Effect of tax rate difference in foreign jurisdiction12 10
Adjustment for prior years- 132
Unrecognised deferred tax liabilities- 723
Deferred tax impact on buildings352 -
Tax loss re-recognised(1,194)(3,669)
Income tax expense$301 $263
Finance costs include interest expense on loans and borrowings, interest component of lease payments and facility fees
for the Bank's guarantee of the Group's commitments. All interest expense are recognised in the Consolidated Statement
of Profit or Loss using the effective interest method.
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4iINCOME TAX (continued)
2024 2023
$000 $000
Imputation credits
Imputation credits available to shareholders of the Company$9,224 $9,223
Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2024 2023 2024 2023 2024 2023
$000 $000 $000 $000 $000 $000
Property, plant and equipment199 240 - - 199 240
Employee benefits95 105 - - 95 105
Lease liabilities57 1 (56)- 1 1
Provisions107 230 - - 107 230
Net tax assets/(liabilities)$458 $576 $(56)- $402 $576
AssetsLiabilitiesNet
Deferred tax assets at balance date relate to the Group's Australian carpet sales operations where it is expected that there
will be taxable profits in future periods to allow for the utilisation of the deferred tax assets.
Deferred tax assets not recognised in respect of temporary differences and tax loss carry-forwards totalled $12,252,000 at
balance date (2023: $13,690,000), with the change relating to the re-recognition of unrecognised tax loss.
Deferred tax assets have also not been recognised in respect of temporary differences and tax loss carry-forwards totalling
$24,150,000 (2023: $24,150,000) relating to an Australian subsidiary that currently does not have trading activity on the basis
that it is also not probable that future taxable profit will be available against which the Group can use the benefits therefrom,
taking the total deferred tax assets unrecognised to $36,402,000 (2023: $37,840,000).
Notwithstanding the derecognition of deferred tax assets for accounting purposes, these deferred tax assets remain
available to the Group for income tax purposes.
While the Board has confidence in the prospects of the business as discussed at note 2c (Going concern) to the
consolidated financial statements, it has taken the same approach with respect to the recognition of deferred tax assets as
it has with the reversal of the FY20 impairment of assets as discussed at note 6a (Property, plant and equipment) to the
consolidated financial statements and has concluded that the execution of the Group’s strategy to focus on wool carpets,
while progressing to plan, is still in its early stages and therefore does not warrant the re-recognition of deferred tax assets.
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
4FINANCIAL PERFORMANCE (continued)
4iINCOME TAX (continued)
Movement in temporary differences during the year:
Balance Balance
30 June 202330 June 2024
$000 $000 $000
Property, plant and equipment240 (41)199
Employee benefits105 (10)95
Lease liabilities1 - 1
Provisions230 (123)107
Total$576 $(174)$402
Balance Balance
30 June 202230 June 2023
$000 $000 $000
Property, plant and equipment302 (62)240
Employee benefits101 4 105
Lease liabilities21 (20)1
Provisions108 122 230
Total$532 $44 $576
Accounting policies
Estimates, judgements and assumptions
Recognised in
Consolidated
Statement of
Profit or Loss
Recognised in
Consolidated
Statement of
Profit or Loss
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the
extent that it relates to items recognised directly in other comprehensive income, in which case it is recognised in other
comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date,
and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes and is measured at the tax rates that are
expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date.
Deferred tax assets are recognised for unused tax losses and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be used. Future taxable profits are determined
based on business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each balance date
and adjusted to the extent that it is no longer probable that sufficient taxable profits will be available in the future to utilise
the deferred tax asset.
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
5CAPITAL AND FUNDING
This section looks at the Group’s two key sources of funding, how it manages its funding and other related matters.
5aCAPITAL MANAGEMENT
The Group’s capital includes share capital, reserves and retained earnings.
The Group is not subject to any externally imposed capital requirements.
The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board.
5bSHARE CAPITAL, DIVIDENDS AND RESERVES
Share capital
2024 2023
Shares on issue
Balance at 1 July
70,069,426 69,179,098
Issued during the year
- 890,328
Balance as at 30 June
70,069,426 70,069,426
The Company does not have a limited amount of authorised capital.
All issued shares are fully paid up and have no par value.
In the prior year, the Company issued, in accordance with the terms of the Bremworth 2022 Long-Term Incentive Scheme,
890,328 fully paid-up ordinary shares on 31 October 2022 to Bremworth Share Scheme Limited (Trustee), with these shares
to be held by the Trustee on behalf of the participating employees until the relevant vesting date, with more information to be
found in note 9b (Share-based payment) to the consolidated financial statements.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and one vote per share at
meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
The Group’s capital management policy is aimed at maintaining a strong capital base so as to maintain investor, creditor
and market confidence in the Group and to enable it to continue to fund the ongoing needs of the business and to sustain its
future development.
The impact of the level of capital on shareholders’ return is also recognised, as is the return to shareholders in the form of
dividends paid and growth in share price, and the Group works to maintain a balance between the higher returns that might
be possible with greater gearing and the advantages and security afforded by a sound capital base.
The allocation of capital between the Group’s specific business segment operations and activities is, to a large extent, driven
by the opportunities that exist within each of these segments and the optimisation of the return achieved on the capital
allocated. The process of allocating capital to specific business segment operations and activities is determined by the Chief
Executive Officer in consultation with the Board and is therefore undertaken independently of those responsible for the
operation.
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
5CAPITAL AND FUNDING (continued)
5bSHARE CAPITAL, DIVIDENDS AND RESERVES (continued)
Dividends
No dividends were paid during the year (2023: Nil).
The Board has not declared a final dividend in respect of the current year ended 30 June 2024 (2023: Nil).
Cash flow hedging reserve
Foreign currency translation reserve
The Group uses derivative financial instruments to hedge its exposure to foreign exchange risks. In accordance with its
treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives
that do not qualify for hedge accounting are accounted for as trading instruments.
Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately.
Subsequent to initial recognition, derivative financial instruments are stated at fair value.
Where derivatives qualify for hedge accounting, changes in the fair value of the derivative hedging instrument designated as
a cash flow hedge are recognised in other comprehensive income to the extent that the hedge is effective. To the extent that
the hedge is ineffective, changes in fair value are recognised in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then
hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive
income remains there until the forecast transaction occurs at which time the gain or loss is transferred to profit or loss. When
the hedge item is a non-financial asset, the amount recognised in the cash flow hedging reserve is transferred to the
carrying amount of the asset when it is recognised. In other cases, the amount recognised in the cash flow hedging reserve
is transferred to profit or loss in the same year that the hedged item affects profit or loss.
The cash flow hedging reserve represents the effective portion of the cumulative net change in the fair value of cash flow
hedging instruments related to hedged transactions that have not yet occurred.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated to New Zealand dollars at exchange rates at the reporting date. The income and expenses of foreign operations
are translated to New Zealand dollars at exchange rates at the dates of the transactions.
The foreign currency translation reserve comprises all exchange rate differences arising from the translation of the financial
statements of foreign operations and the translation of liabilities designated as hedges against the Company’s net
investment in a foreign operation.
There is no movement in the foreign currency translation reserve balance for the year ended 30 June 2024 (2023: Nil) as the
reserve relates to dormant foreign entities of the Group.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
5CAPITAL AND FUNDING (continued)
5bSHARE CAPITAL, DIVIDENDS AND RESERVES (continued)
Share-based payment reserve
5cBANKING FACILITIES AND LOANS AND BORROWINGS
The Group has no loans at balance date (2023: Nil).
The share-based payment reserve is used to recognise the grant date assessed fair value of the performance rights issued
to executive employees under the Company's long-term incentive scheme as further discussed at note 9b (Share-based
payment) to the consolidated financial statements.
The assessed fair value of the performance rights at grant date are recognised as an expense in profit or loss over the
period from grant date to condition date, adjusted to reflect only those rights where the service condition will be met, with
corresponding entries to the share-based payment reserve.
This note provides information about the contractual terms of the Group’s banking facilities. For more information about the
Group’s exposure to interest rate risks, see note 8 (Risks and financial instruments) to the consolidated financial statements.
The Group’s banking facilities (including Bank guarantees to third parties relating to lease and other commitments of the
Group) are provided by Bank of New Zealand and National Australia Bank Limited (together, “the Bank”).
The Group continues to maintain ongoing relationships with the Bank, with the view that committed credit lines could be
reinstated in the future to fund working capital requirements as the Group progresses through its transformation journey. As
a consequence, the Group has retained the security arrangements that were previously put in place to secure obligations for
the payment and repayment of moneys due, owing or payable by the Group to the Bank.
These security arrangements include the granting in favour of Bank of New Zealand, as security agent for the Bank, a first-
ranking composite general security deed and cross guarantee securing all obligations of the Group to the Bank by certain
companies in the Group. The property-owning companies in the Group have also continued to grant in favour of Bank of
New Zealand first-ranking mortgages in respect of land and buildings as security for all obligations of the Group to the Bank,
including obligations for the payment and repayment of moneys due, owing or payable by the Group to the Bank (see note
6a (Property, plant and equipment) to the consolidated financial statements).
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
6ASSETS EMPLOYED
6aPROPERTY, PLANT AND EQUIPMENT
Land and
buildings
Plant and
equipment
Other
assets
Under
construction Total
$000 $000 $000 $000 $000
COST
Balance at 1 July 20236,560 35,342 12,103 844 54,849
Additions27 9 5 4,106 4,147
Disposals- (65)(352)(107)(524)
Transfers241 678 2,011 (2,930)-
Cyclone Gabrielle related derecognition- - - (297)(297)
Cyclone Gabrielle related impairment reversed- 100 - 108 208
Balance at 30 June 2024$6,828 $36,064 $13,767 $1,724 $58,383
Balance at 1 July 202210,970 65,663 12,656 669 89,958
Additions8 41 84 1,823 1,956
Disposals(9)(3,992)(598)- (4,599)
Transfers- 697 298 (995)-
Cyclone Gabrielle related derecognition(4,409)(27,067)(337)(653)(32,466)
Balance at 30 June 2023$6,560 $35,342 $12,103 $844 $54,849
DEPRECIATION AND IMPAIRMENT LOSSES
Balance at 1 July 20231,000 33,684 10,017 - 44,701
Depreciation for the year74 237 547 - 858
Disposals- (65)(352)- (417)
Balance at 30 June 2024$1,074 $33,856 $10,212 - $45,142
Balance at 1 July 20221,672 63,518 10,528 45 75,763
Depreciation for the year129 279 412 - 820
Disposals- (3,948)(638)- (4,586)
Transfers- 45 - (45)-
Cyclone Gabrielle related derecognition(801)(26,210)(285)- (27,296)
Balance at 30 June 2023$1,000 $33,684 $10,017 - $44,701
CARRYING AMOUNTS
At 30 June 2024$5,754 $2,208 $3,555 $1,724 $13,241
At 30 June 2023$5,560 $1,658 $2,086 $844 $10,148
At 1 July 2022$9,298 $2,145 $2,128 $624 $14,195
Other assets
Other assets comprise fixtures and fittings (including leasehold improvements and display stands), computer equipment,
motor vehicles and office equipment.
This section covers non-current assets, being property, plant and equipment and other assets that the Group employs in the
production and sale of carpet and rugs, and the acquisition and sale of wool fibre, to generate revenues and profits.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
6ASSETS EMPLOYED (continued)
6aPROPERTY, PLANT AND EQUIPMENT (continued)
Impairment
-Napier Land
-Whanganui Land & Buildings
-Right of use Assets – Grayson Avenue
-
-
-
As a consequence, the Group conducted a review of non-current non-financial assets, including fixed assets and right-of-
use assets, to assess whether there was any impairment at balance date. The recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of the cash-generating unit (CGU) to which the asset
belongs.
There are two cash-generating units which relate to reporting segments in these consolidated financial statements, Carpets
& Rugs and Wool acquisition.
The operating profit before depreciation of the Wool acquisition CGU was $1.1m and was above budget and prior year and
was not significantly impacted by Cyclone Gabrielle. Management determined there was no impairment indicators for the
Wool acquisition CGU and therefore no impairment assessment is required.
An after-tax WACC of 12.27% was calculated using the Brennan-Lally method, implying a pre-tax discount rate of
16.13% which was used in managements assessment.
The market capitalisation of the company was compared with the carrying value at balance date and management
assessed that the recoverable amount.
Management assessed that the recoverable amount of the Carpet & Rugs CGU was greater than its carrying amount as at
30 June 2024 and that no reduction for impairment loss was required.
The Group’s market capitalisation at balance date was below the carrying value of net assets. Even though market
capitalisation excludes any control premium and may not reflect the value of 100% of the Group’s net assets, it is still
considered to be an indicator of impairment.
Apart from Cyclone Gabrielle related impairments (refer to note 3 (Cyclone Gabrielle) to the consolidated financial
statements), the Group has concluded that no other impairment of assets was required at balance date (2023: Nil).
Apart from Cyclone Gabrielle related reversal of impairments (refer to note 3 (Cyclone Gabrielle) to the consolidated financial
statements), the Group has also concluded that no reversal of the previous impairment of assets should be made following
an assessment that the execution of the Group’s strategy to focus on wool carpets which, while progressing to plan, is in its
early stages.
The Carpet & Rugs CGU had an operating loss before depreciation of $6.1m and therefore an impairment assessment was
performed. Management identified the following as separately identifiable assets for the purposes of measuring
recoverable amounts:
Indicative market values were obtained for Grayson Avenue leases; Whanganui property; and Napier land. These
assessments were in excess of the assets net book values. No impairment was required.
The value in use methodology was applied to assess recoverability of the remaining assets of the Carpet & Rugs CGU. In
assessing VIU management applied the following key assumptions:
Cash flow projections, based on recent budgets and trends with the assumption of normalized supply levels, were
reviewed against independent consultants' earnings and Net Present Value forecasts from the business's strategic
review and found to be more conservative.
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
6ASSETS EMPLOYED (continued)
6aPROPERTY, PLANT AND EQUIPMENT (continued)
Accounting policies
Recognition and measurement
Under construction
Depreciation
The principal rates used for the current and comparative periods are as follows:
-buildings 1.0 - 2.5% straight line
-building fitouts5.0 - 33.0% straight line
-plant and equipment6.7 - 20.0% straight line
-other assets
- display stands10.0% straight line
- computer equipment20.0 - 25.0% straight line
- office equipment10.0 - 20.0% straight line
- cars20.0% straight line
- trucks and utilities10.0% straight line
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
Impairment
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are
located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Items being constructed for future use are held as part of property, plant and equipment under construction. The carrying
amounts of these represent the costs incurred at balance date and will be transferred to the appropriate classification of
property, plant and equipment on completion. Initial cost includes the purchase consideration and those costs directly
attributable in bringing the asset to the location and condition necessary for its intended use. These costs include site
preparation costs, installation costs, borrowing costs, unrecovered operating costs incurred during planned
commissioning and the costs of obtaining consents.
Costs cease to be capitalised when all the activities necessary to bring the asset to its location and condition for its
intended use are complete.
An impairment loss is recognised if the carrying amount of the cash-generating unit (being the smallest identifiable asset
group that generates cash flows that are largely independent from other assets and groups) to which the property, plant
and equipment and other assets is allocated exceeds its recoverable amount.
Depreciation is recognised in the Consolidated Statement of Profit or Loss over the estimated useful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The recoverable amount of a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the cash-generating unit.
The carrying amount of property, plant and equipment and other assets is tested for impairment whenever there are
indicators of impairment.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
6ASSETS EMPLOYED (continued)
6aPROPERTY, PLANT AND EQUIPMENT (continued)
Estimates, judgements and assumptions
6bCAPITAL COMMITMENTS
Capital expenditure contracted for, but not recognised as liabilities, at balance date is set out below.
2024 2023
$000 $000
Napier reinstatement272 -
Other property, plant and equipment445 72
$717 $72
For the purpose of assessing impairment, assets are grouped in the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash generating unit or
CGU), which as at 30 June 2024 were identified as being the Carpets and Wool Acquisition CGUs.
NZ IAS 36 Impairment of Assets requires the Group to assess, at the end of each reporting period, whether there is any
indication that an asset may be impaired. If any such indication exists, the Group shall estimate the recoverable amount of
the asset. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. The
Group is required to recognise an impairment loss to the extent to which the carrying amount of an asset exceeds its
recoverable amount.
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
7WORKING CAPITAL
7aCASH AND BANK
Cash and bank at balance date comprise the following:
2024 2023
$000 $000
Cash and cash equivalents26,645 31,819
Short term deposits5,000 7,500
$31,645 $39,319
Accounting policies
7bTRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAYMENTS
2024 2023
$000 $000
Trade receivables due from external customers8,339 9,306
Other receivables1,602 8
Prepayments720 643
$10,661 $9,957
Accounting policies
This section reviews the level of working capital the Group generates and utilises in its normal day-to-day operating
activities. The Group’s working capital includes current assets (cash and bank, trade receivables, other receivables and
prepayments and inventories) and current liabilities (trade payables and accruals and employee entitlements).
Cash is cash on hand and demand deposits and includes bank overdrafts used for cash management purposes where
formal arrangements for set off has been agreed with the Bank. Under these set off arrangements, the Group is able to set
off overdrawn balances up to a maximum of $1,000,000 against credit balances in selected accounts as long as the net
balance of all these accounts (including overdrawn accounts) as a whole remain in credit. At balance date, there were no
overdrawn amounts subject to set off (2023: Nil). Cash equivalents are highly liquid investments that are readily convertible
to known amounts of cash (that is, there is insignificant risk of changes in value) with maturity no more than three months
from balance date. Short term deposits are investments with maturities greater than three months but no more than
twelve months from balance date.
The Group's approach and policy with respect to, and quantitative disclosure of, credit risk are discussed at note 8 (Risks
and financial instruments) to the consolidated financial statements.
Impairment losses on trade receivables and other receivables are assessed collectively and on a portfolio basis based on
the number of days overdue using the expected loss model, taking into account the historical loss experienced in portfolios
with a similar number of days overdue as well as current conditions and forecast of future economic conditions.
Trade receivables and other receivables are recognised initially at transaction price and subsequently at amortised cost
less impairment losses.
Other receivables include $1,485,000 of insurance recovery progress payments received after balance date (2023: Nil).
Refer to note 3e (Progress payments received) to the consolidated financial statements for further information.
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
7WORKING CAPITAL (continued)
7cINVENTORIES
Inventories, net of provision, are summarised in the table below:
2024 2023
$000 $000
Raw materials and consumables6,618 4,621
Raw materials stock in transit4,563 169
Work in progress1,209 1,039
Finished goods16,958 15,293
$29,348 $21,122
Carrying amount of inventories subject to retention of title clauses$1,039 $760
Inventory provision at 1 July1,408 1,353
Change in provision during the year1,206 55
Inventory provision at 30 June$2,614 $1,408
The approach to inventory provisioning in 2024 is substantially consistent with 2023.
Accounting policies
Estimates, judgements and assumptions
Inventory provisions are recognised for oddments and obsolete, aged and discontinued inventories to arrive at their likely
net realisable value.
Estimates and judgement are applied in identifying and categorising - to the extent applicable - obsolete, aged and
discontinued inventory and determining the level of provisioning that is required – with a range of factors including
inventory rationalisation plans, consumer demand and trends, available distribution channels and historical sales and
margin data considered.
Write downs or write offs of inventory produced during the year totalled $817,000 (2023: $3,775,000). The 2023 write offs
included $2,474,000 of inventory that was written off because of damage as a consequence of Cyclone Gabrielle. $894,000
written off in 2023 was reversed in the current year. Refer to note 3 (Cyclone Gabrielle) to the consolidated financial
statements for further information.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-
out principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production
overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
7WORKING CAPITAL (continued)
7dTRADE PAYABLES AND ACCRUALS
2024 2023
$000 $000
Trade payables14,198 10,111
Accruals2,152 4,837
$16,350 $14,948
Accounting policies
The carrying amounts of trade payables are considered to be the same as their fair values, due to their short-term nature.
7eEMPLOYEE ENTITLEMENTS
2024 2023
$000 $000
Leave obligations3,282 4,562
Bonus entitlement43 -
Wages accruals401 315
$3,726 $4,877
Accounting policies
Trade payables are unsecured - except to the extent to which they have retention of titles clauses within their supply
arrangements with the Group - and are usually paid within the agreed payment terms.
Leave obligations cover the Group's liabilities in relation to employees' accrued and entitled annual leave as well as their
unconditional entitlement to long service leave where they have completed the required period of service.
The entire amount of employee entitlements is presented as current as the Group does not have an unconditional right to
defer settlement for any of these obligations.
Employee entitlements relating to wages and salaries as well as annual leave and other employment-related payments
that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees
render the related service are recognised in respect of employees’ services up to the end of the reporting period as
liabilities and are measured at the amounts expected to be paid when the liabilities are settled.
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS
Exposure to credit, liquidity, foreign currency and interest rate risks arises in the normal course of the Group’s businesses.
Credit risk
This section identifies the risks faced by the Group, explains the impact of these risks on its financial position, performance
and cash flows, outlines the Group’s approach to financial risk management and highlights the financial instruments used to
manage risks.
The Group enters into derivative financial instruments in the ordinary course of business to manage foreign currency risks in
accordance with the treasury policy approved by the Board. Senior management operating under the Board-approved
treasury policy ensures that procedures for derivative instrument utilisation, control and valuation, risk analysis,
counterparty credit approval, and ongoing monitoring and reporting are adhered to.
The Group manages commodity price risks through negotiated supply contracts and forward physical contracts. However,
because these contracts are, generally, in respect of raw material and utility purchases for own use, they are not accounted
for as financial instruments.
Management has a credit policy in place under which each new customer is individually analysed for credit worthiness and
assigned a purchase limit before the standard payment and delivery terms and conditions are offered. Because of the
Group’s customer base, there is no need for the Group to rely on external ratings. In most cases, bankers’ references, trade
credit insurance approvals and/or credit references from other suppliers are considered adequate. Purchase limits are
reviewed on a regular basis.
In order to determine which customers are classified as having payment difficulties, the Group applies a mix of duration and
frequency of default. The Group does not generally require collateral in respect of trade and other receivables.
The Group’s exposure to credit risk is mainly influenced by its customer base. As such, it is concentrated to the default risk of
its industry. However, geographically, there is no credit risk concentration, with the Group’s customers spread throughout
New Zealand, Australia and other overseas markets. Credit risk exposure with respect to trade receivables is limited by
stringent credit controls, by the utilisation of irrevocable letters of credit and trade credit insurances wherever required, and
by the large number of customers within the Group's customer base.
The amount and timing of collection of trade receivables and estimate of expected credit losses under NZ IFRS 9 Financial
Instruments have been considered and included in the consolidated financial statements.
The Group does not invest in securities, but accepts that surplus cash and cash equivalents may arise from time to time
during the course of its management of cash. In these instances, it requires these surplus cash and cash equivalents to be
deposited on call or in short term deposits and only with counterparties approved by the Board as having the required credit
ratings.
Foreign currency forward exchange contracts have been entered into with counterparties approved by the Board as having
the required credit ratings. The Group's exposure to credit risk from these financial instruments is limited because it does not
expect the non-performances of the obligations contained therein due to the high credit ratings of the financial institutions
concerned. The Group does not require any collateral or security to support these financial instruments.
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
Liquidity risk
Foreign currency risk
QUANTITATIVE DISCLOSURES
Credit risk
The carrying amount of financial assets represents the Group’s maximum credit exposure.
The Group’s maximum exposure to credit risk for trade and other receivables by geographic regions is as follows:
2024 2023
$000 $000
New Zealand6,369 5,556
Australia3,224 3,173
Other regions348 585
Trade and other receivables$9,941 $9,314
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements
on an ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to meet its obligations
arising from its financial liabilities.
The Group’s contractual cash flows and liquidity risk profile are set out in detail in the liquidity risk section of the quantative
disclosures in this note.
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in
which sales, purchases, receivables and payables are denominated. All entities in the Group have New Zealand dollars ($) as
their functional currency.
The Group enters into foreign currency contracts within policy parameters to manage the risk associated with forecast sales
and purchases. The Group’s policy allows management to hedge up to 12 months forecast sales and purchases without
prior approval of the Board having first been obtained.
The Group applies a hedge ratio of 1:1. The method used to assess hedge effectiveness is Critical Match Terms whereby the
hedging instrument and the hedged item are matched to the key terms. In the hedge relationship, the main cause of
ineffectiveness includes a change in the critical terms, for example, the timing of the transaction.
The Group determines the existence of an economic relationship between the hedging instrument and hedged item based
on the currency, amount and timing of the respective cash flows. The Group assesses whether the derivative designated in
each hedging relationship is expected to be, and has been, effective in offsetting changes in cash flows of the hedged item
using the critical matched terms method.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
QUANTITATIVE DISCLOSURES (continued)
The status of trade and other receivables at the reporting date is as follows:
Current
0 – 30 days
past due
31 – 120
days past
due
More than
120 days
past due Total
2024
Expected loss rate0%0%0%15%
Gross carrying amount – trade and other receivables7,923 1,231 596 225 9,975
Loss allowance- - - (34)(34)
2023
Expected loss rate0%0%0%8%
Gross carrying amount – trade and other receivables7,260 1,480 368 225 9,333
Loss allowance- - - (19)(19)
In summary, trade and other receivables are determined to be impaired as follows:
2024 2023
$000 $000
Trade and other receivables - gross9,975 9,333
Impairment provisions(34)(19)
Trade and other receivables - net$9,941 $9,314
The details of movements in the impairment provision are as follows:
2024 2023
$000 $000
Balance at 1 July(19)(6)
Impaired trade receivables written off12 6
Changes in impairment provision(27)(19)
Balance at 30 June$(34)$(19)
Individually impaired trade receivables relate to a small number of customers where the amounts involved are immaterial. In
the case of insolvency, the Group generally writes off the receivable in full unless there is clear evidence that a receipt,
whether directly or by way of a claim under the Group’s trade credit insurance policy, is highly probable.
The Group adopts the expected loss model in assessing its trade and other receivables for impairment. In doing so, it
determines impairment on a forward-looking basis, taking into account not only past events and current conditions, but also
forecast of future economic conditions. Bad debts are written off when they are considered to have become uncollectable.
Changes in the impairment provision are included in distribution expenses in the Consolidated Statement of Profit or Loss.
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
QUANTITATIVE DISCLOSURES (continued)
Liquidity risk
Timing of contractual cash flows
Statement of
Consolidated
Financial
Position
Total
contractual
cash flows
6 months or
less 6-12 months 1-2 years 2-5 years
Greater than 5
years
$000 $000 $000 $000 $000 $000 $000
2024
Trade payables14,198 14,198 14,198 - - - -
Lease liabilities17,925 22,393 1,108 1,121 2,218 6,520 11,426
Total non-derivative liabilities$32,123 $36,591 $15,306 $1,121 $2,218 $6,520 $11,426
Forward exchange contracts
Inflow(37,583)(23,820)(11,554)(2,209)- -
Outflow36,926 23,258 11,481 2,187 - -
(491)(657)(562)(73)(22)- -
Net derivative liabilities/(assets)$(491)
Current assets(508)
Current liabilities17
Net derivative liabilities/(assets)$(491)
2023
Trade payables10,111 10,111 10,111 - - - -
Lease liabilities18,038 23,181 1,074 1,017 1,964 5,763 13,363
Total non-derivative liabilities$28,149 $33,292 $11,185 $1,017 $1,964 $5,763 $13,363
Forward exchange contracts
Inflow(45,575)(18,425)(15,219)(11,931)- -
Outflow44,285 18,049 14,805 11,431 - -
(1,001)(1,290)(376)(414)(500)- -
Net derivative liabilities/(assets)$(1,001)
Current assets(1,017)
Current liabilities16
Net derivative liabilities/(assets)$(1,001)
The following table sets out the contractual undiscounted cash flows for all material financial liabilities (including projected
interest costs).
Disclosed in Consolidated Statement
of Financial Position
Disclosed in Consolidated Statement
of Financial Position
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
QUANTITATIVE DISCLOSURES (continued)
Foreign currency risk
The Group’s exposure to foreign currency risk can be summarised as follows:
AUDUSDEUROthers
NZD equivalent of these foreign currencies:$000 $000 $000 $000
2024
Trade receivables2,948 73 - -
Trade payables(517)(899)(1,630)-
2,431 (826)(1,630)-
Estimated forecast sales for which hedging is in place24,219 - - -
Net cash flow exposure before hedging activity26,650 (826)(1,630)-
Forward exchange contracts
Notional amounts(26,650)826 1,630 -
Net unhedged exposure- - - -
2023
Trade receivables3,173 76 - -
Trade payables(314)(123)(19)(32)
2,859 (47)(19)(32)
Estimated forecast sales for which hedging is in place42,716 - - -
Net cash flow exposure before hedging activity45,575 (47)(19)(32)
Forward exchange contracts
Notional amounts(45,575)- - -
Net unhedged exposure- $(47)$(19)$(32)
Net Consolidated Statement of Financial Position exposure before
hedging activity
Net Consolidated Statement of Financial Position exposure before
hedging activity
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
QUANTITATIVE DISCLOSURES (continued)
Sensitivity analysis
StrengthenWeakenStrengthenWeaken
$000 $000 $000 $000
30 June 2024
NZD/AUD (+/- 5%)- - 1,810 (1,136)
NZD/EUR (+/- 5%)- - (171)241
NZD/USD (+/- 5%)- - (119)258
30 June 2023
NZD/AUD (+/- 5%)- - 1,437 (1,588)
There were no foreign exchange contracts that do not meet the hedge accounting criteria at the balance sheet date.
The impact of a change in interest rates by one percentage point on the Group’s profit or loss and OCI is set out as follows:
IncreaseDecreaseIncreaseDecrease
1% point(1% point)1% point(1% point)
$000 $000 $000 $000
Interest rate impact - Net FY24$299 $(299)- -
Interest rate impact - Net FY23$382 $(382)- -
P&L
In managing interest rate and currency risks, the Group aims to reduce the impact of short-term fluctuations on the Group’s
earnings. Over the longer-term, however, changes in foreign exchange and interest rates will have an impact on profit.
P&LEquity, net of tax
Equity, net of tax
For foreign exchange contracts that continue to meet the hedge accounting criteria at the balance sheet date to hedge
foreign exchange exposures, it is estimated that a general change in the value of the New Zealand dollar against other
foreign currencies as set out below would have no impact on the Group’s profit or loss before income tax for the years ended
30 June 2024 and 2023. The impact on equity, net of tax, for these foreign exchange contracts, is disclosed in the table
below:
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
HEDGING
Forecast transactions
The Group classifies the forward exchange contracts taken out to hedge forecast transactions as cash flow hedges.
The following relates to items designated as hedging instruments:
Notional
amount Assets Liabilities
$000 $000 $000 $000 $000 $000
2024
Foreign currency risk
AUD26,650
508 (17)
Derivative
financial
instruments -
assets and
liabilities
(607)- 378 0.8976
1
92% of notional amount expiring within 12 months of balance date and 8% expiring between 12 and 24 months of balance date
2
Hedge ratio 1:1
Notional
amount Assets Liabilities
$000 $000 $000 $000 $000 $000
2023
Foreign currency risk
AUD40,680
1,017 (16)
Derivative
financial
instruments -
assets and
liabilities
(426)- 938 0.8926
1
62% of notional amount expiring within 12 months of balance date and 38% expiring between 12 and 24 months of balance date
2
Hedge ratio 1:1
Balance in
CFHR
Average rate
of hedging
Forward exchange
contracts – sales and
receivables
1, 2
Carrying amount
Forward exchange
contracts – sales and
receivables
1, 2
Carrying amount
Line item in
Consolidated
Statement of
Financial
Position
Changes in the
value of the
hedging
instrument
recognised in
OCI during the
year
Hedge
ineffectiveness
recognised in
profit or loss
Average rate
of hedging
Changes in the
value of the
hedging
instrument
recognised in
OCI during the
year
Hedge
ineffectiveness
recognised in
profit or loss
Balance in
CFHR
Line item in
Consolidated
Statement of
Financial
Position
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
CLASSIFICATION AND FAIR VALUES
Hedging
instruments
Amortised
cost
Total carrying
amount
Fair value
hierarchy
Level 2
$000 $000 $000 $000
2024
Assets
Derivative financial instruments508 - 508 508
Cash and bank- 31,645 31,645
Trade and other receivables- 9,941 9,941
Advances to employees- 181 181
Total assets$508 $41,767 $42,275
Liabilities
Lease liabilities- 16,508 16,508
Employee benefits- 488 488
Total non-current liabilities- 16,996 16,996
Derivative financial instruments17 - 17 17
Trade payables and accruals- 16,350 16,350
Customer deposits- 139 139
Employee benefits and entitlements- 3,772 3,772
Lease liabilities- 1,417 1,417
Total current liabilities17 21,678 21,695
Total liabilities$17 $38,674 $38,691
The following tables show the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy.
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
CLASSIFICATION AND FAIR VALUES (continued)
Hedging
instruments
Amortised
cost
Total carrying
amount
Fair value
hierarchy
Level 2
$000 $000 $000 $000
2023
Assets
Derivative financial instruments1,017 - 1,017 1,017
Cash and bank- 39,319 39,319
Trade and other receivables- 9,314 9,314
Advances to employees- 170 170
Total assets$1,017 $48,803 $49,820
Liabilities
Lease liabilities- 16,742 16,742
Employee benefits- 666 666
Total non-current liabilities- 17,408 17,408
Derivative financial instruments16 - 16 16
Trade payables and accruals- 14,948 14,948
Customer deposits- 192 192
Employee benefits and entitlements- 4,915 4,915
Lease liabilities- 1,296 1,296
Total current liabilities16 21,351 21,367
Total liabilities$16 $38,759 $38,775
There were no financial assets or liabilities with fair values classified as Level 1 or Level 3 in the fair value hierarchy.
Accounting policies
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group
transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of
ownership of the financial assets are transferred. Financial liabilities are derecognised if the Group’s obligations specified
in the contract expire or are discharged or cancelled.
Non-derivative financial instruments comprise trade and other receivables, cash and bank and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value, inclusive of transaction costs, and are
subsequently measured at amortised cost using the effective interest rate method less any impairment losses.
Derivatives, being forward exchange contracts, have been measured at fair value using relevant valuation techniques
which include net present value and discounted cash flow models and comparison with similar instruments for which
observable market prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark
interest rates, credit spreads and other information used in estimating discount rates and foreign currency exchange
rates.
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
8RISKS AND FINANCIAL INSTRUMENTS (continued)
DETERMINATION OF FAIR VALUES
Level 1:quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2:
Level 3:inputs for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between levels of the fair value hierarchy during the year.
MASTER NETTING OR SIMILAR AGREEMENTS
The following table sets out the carrying amounts of recognised derivatives that are subject to master netting agreements:
Derivative
assets
Derivative
liabilities
Derivative
assets
Derivative
liabilities
$000 $000 $000 $000
Gross amounts in the Consolidated Statement of Financial Position508 (17)1,017 (16)
Amounts offset- - - -
Net amounts in the Consolidated Statement of Financial Position508 (17)1,017 (16)
Related amounts that are not offset based on ISDA(17)17 (16)16
Net amounts$491 - $1,001 -
2024 2023
The fair value of an asset or a liability is measured on a recurring basis. When measuring the fair value of an asset or a
liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices)
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting
agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all
transactions outstanding are aggregated into a single net amount that is payable by one party to the other. In certain
circumstances – for example, when a credit event such as a default occurs, all outstanding transactions under the
agreement are terminated, the termination value is assessed and only a single net amount is payable in settlement of all
transactions.
The ISDA agreements do not meet the criteria for offsetting in the Consolidated Statement of Financial Position. This is
because the Group does not have any currently legally enforceable right to offset recognised amounts, because the right to
offset is enforceable only on the occurrences of future events such as a default on the bank loans or other credit events.
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS
9aLEASES
This note provides information for leases where the Group is a lessee.
AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2024 2023
$000 $000
Right-of-use assets
Buildings8,220 8,017
Plant and equipment225 358
Motor vehicles359 241
$8,804 $8,616
Lease liabilities
Non-current16,508 16,742
Current1,417 1,296
$17,925 $18,038
Additions to right-of-use assets during the year were $1,243,000 (2023: $331,000).
There was no impairment of right-of-use assets during the year (2023: Nil).
There was also no reversal of prior year impairment of right-of-use assets during the year (2023: Nil).
AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
2024 2023
$000 $000
Depreciation charge in respect of right-of-use assets
Buildings838 821
Plant and equipment133 134
Motor vehicles86 39
$1,057 $994
Interest expense (included in finance costs)$822 $879
$921 $311
$43 $39
AMOUNTS RECOGNISED IN THE STATEMENT OF CASH FLOWS
Total cash outflow for leases$2,180 $2,930
This section includes the remaining information relating to the consolidated financial statements which is required to be
disclosed to comply with financial reporting standards.
Expense relating to short-term leases (included in cost of goods sold and
administration expenses
Expense relating to leases of low-value assets that are not disclosed
above as short-term leases (included in administrative expenses)
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9aLEASES (continued)
Accounting policies
-fixed payments; and
-
To determine the incremental borrowing rate, the Group:
-
-
-
Right-of-use assets are measured at cost comprising the following:
-the amount of the initial measurement of lease liability; and
-
Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms, security and conditions.
If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data)
which has a similar payment profile to the lease, then the group entities use that rate as a starting point to determine the
incremental borrowing rate.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The Group leases buildings, forklifts and motor vehicles, with contracts typically entered into for fixed periods ranging from
between three to four years for motor vehicles, five to six years for fork hoists and up to sixteen years for buildings, but may
have extension options as further discussed below.
Payments associated with short-term leases of plant and equipment and motor vehicles and all leases of low-value assets
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12
months or less without a purchase option. Low-value assets comprise IT equipment and small items of office furniture.
Contracts may contain both lease and non-lease components. The Group has elected, for leases of motor vehicles, to not
separate lease and non-lease components and instead account for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date.
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by lessees
within the Group which does not have recent third-party financing; and
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
makes adjustments, where necessary, specific to the lease taking into account country, currency and security.
where possible, uses recent third-party financing secured by the individual lessee as a starting point, adjusted to
reflect changes in financing conditions since third party financing was secured;
make good costs.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9aLEASES (continued)
EXTENSION OPTIONS
Estimates, judgements and assumptions
-if there are significant costs to not extend; and
-
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be
extended, with the Group reasonably certain to extend:
Extension options are generally incorporated into contracts for leases of buildings, with these options used to maximise
operational flexibility with respect to the management of the buildings used in the Group’s operations. Where extension
options are held, they are exercisable only by the Group and not by the respective lessor. Extension options are generally not
included in contracts for leases of plant and equipment and motor vehicles because of the Group's ability to replace these
assets without significant cost, delay or disruption to the business.
The lease term is reassessed if an extension option is actually exercised. The assessment of reasonable certainty is only
revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is
within the control of the lessee. The Group did not revise its assessment of reasonable certainty with respect to extension
options during the year (2023: Nil).
if leasehold improvements are expected to have a significant remaining value.
As at balance date, potential future cash outflows of $17,666,000 (undiscounted) in respect of leases of buildings have not
been included in the determination of lease liability because it is not reasonably certain that these leases will be extended
(2023: $19,803,000).
Otherwise, the Group considers other factors including the lease durations already provided for in the contract, the Group's
future strategic or business direction and the costs and disruptions to the business as a consequence of any decision to
not exercise an extension option.
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9bSHARE-BASED PAYMENT
2024 2023
Outstanding options under the Bremworth Share Option Scheme
1,000,000 1,000,000
Outstanding performance rights under the 2022 LTI Scheme
705,435 890,332
Maximum number of shares that could be issued under current share-based payment arrangements
(excluding those already issued under the 2022 LTI Scheme)
2024 2023
Balance at 1 July
1,000,000 2,071,394
Lapsed during the year
- (1,071,394)
Balance as at 30 June
1,000,000 1,000,000
Impact of share-based payment arrangements on the consolidated financial statements
Accounting policies
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.
There were no issue of performance rights, shares or options during the year (2023: 890,328 performance rights under the
Bremworth 2022 Long-Term Incentive Scheme (2022 LTI Scheme)).
The following is a summary of the outstanding performance rights or options under the various plans/schemes as at
balance date:
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.
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.
184,897 performance rights under the 2022 LTI Scheme lapsed during the year (2023: all performance rights under the
Bremworth 2020 Long-Term Incentive Scheme (2020 LTI Scheme)).
$117,000, 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 year ended 30 June 2024, were recognised in administration
expenses in the Consolidated Statement of Profit or Loss for the period, with a corresponding credit totalling $117,000 to the
share-based payment reserve within equity (2023: $202,000 under the 2020 LTI Scheme, the Bremworth Option Scheme and
the 2022 LTI Scheme).
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9cPROVISIONS
Warranties Claims
Other
Total
$000 $000 $000 $000
Balance at 1 July 20231,306 190 139 1,635
Provided during the year513 75 10 598
Utilised during the year(504)(114)(40)(658)
Released to profit or loss during the year- - (69)(69)
Balance at 30 June 2024$1,315 $151 $40 $1,506
Non-current772 - 40 812
Current543 151 - 694
Balance at 30 June 2024$1,315 $151 $40 $1,506
Balance at 1 July 20221,110 350 239 1,699
Provided during the year1,145 15 - 1,160
Utilised during the year(949)(175)- (1,124)
Released to profit or loss during the year- - (100)(100)
Balance at 30 June 2023$1,306 $190 $139 $1,635
Non-current730 - 89 819
Current576 190 50 816
Balance at 30 June 2023$1,306 $190 $139 $1,635
Warranties
Accounting policies
Estimates, judgements and assumptions
The provision for warranties for carpet sold is based on estimates made from historical warranty data associated with
similar products sold by the Group.
The Group has no history of material warranty claims in respect of non-carpet products sold. As a consequence, no
provision for warranties is required in respect of these other products.
The amount of warranty costs recognised as an expense directly to the Consolidated Statement of Profit or Loss during the
year totalled $736,000 (2023: $1,208,000).
Warranties relating to the sale of carpet are standard warranties. The Group does not offer extended warranties that would
be subject to a separate performance obligation.
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
Provision for warranties requires judgement to be applied by considering a range of factors including the nature and extent
of historical claims data associated with similar products sold by the Group, the terms of the warranties built into supply
contracts, consumer protection laws in key markets and the corrective actions being taken to address quality issues at
production.
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9dCONTINGENT LIABILITIES
The Group’s indebtedness under the cross guarantee at balance date amounted to nil (2023: Nil).
9eRELATED PARTIES
TRANSACTIONS WITH DIRECTORS AND KEY MANAGEMENT PERSONNEL
Directors and key management personnel as shareholders
One of the Directors is a shareholder in the Company.
Directors and key management personnel as lenders or borrowers
Directors and key management personnel as providers of services
The Group has granted indemnities in favour of Bank of New Zealand and National Australia Bank Limited (together, “the
Bank”) at balance date in respect of Bank guarantees relating to leases and other commitments totalling $2,068,000 (2023:
$2,068,000).
Some subsidiaries in the Group are parties to a cross guarantee in favour of the Bank securing each other’s obligations, with
the property-owning companies in the Group also granting in favour of the Bank first-ranking mortgages in respect of land
and buildings as security for all obligations if the Group to the Bank.
Their shares rank pari passu with all the other ordinary shares in the capital of the Company and do not therefore confer
additional rights to dividends paid or to attend or vote at any meetings of the shareholders of the Company.
Paul Izzard Design Limited, a company owned and directed by non-executive Director, Paul Izzard, provided the Group with
design services in relation to the new Bremworth brand experience store during the year (2023: Nil).
The fees charged by Paul Izzard Design Limited for the professional services rendered totalled $38,553, with these services
approved by the Board and the fees confirmed as arms-length.
An interest-free, full-recourse, loan of $208,050 was provided to the Chief Executive Officer in September 2021 pursuant to
the terms of the Bremworth Equity Plan, with the proceeds of that loan applied towards the amount payable for the 500,000
fully paid-up ordinary shares issued to the Chief Executive Officer under the Bremworth Equity Plan.
The Chief Executive Officer is also a shareholder in the Company by virtue of the fully paid-up ordinary shares issued to, and
held by him, pursuant to the Bremworth Equity Plan.
The Directors are precluded by the NZX Listing Rules from voting at general meetings of shareholders on certain matters
prescribed by the New Zealand Exchange. These matters include, in the case of the Directors who are also shareholders,
shareholders’ approval of directors’ fees.
For the purposes of this note, key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including any Director (whether executive or
otherwise) of that entity.
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9eRELATED PARTIES (continued)
Directors’ remuneration and benefits
The fees paid to the Directors for services in their capacity as Directors totalled $387,000 during the year (2023: $387,000).
No other services were provided by the Directors during the year (2023: Nil).
Directors’ feesPer annumExplanatory notes
Non-executive Chairman of the Board$128,100
$61,000Inclusive of time spent on Board committees
Chairman of the Audit Committee$10,000
Chairman of the Remuneration Committee$5,000
Key management personnel’s (including the Chief Executive Officer’s) remuneration and benefits
2024 2023
$000 $000
Salaries, bonuses and leave entitlements3,312 2,878
Share-based payments108 202
Employee benefits312 287
Termination payments569 -
$4,301 $3,367
Non-executive Directors
(including Deputy Chairman of the Board, if any)
Inclusive of time spent on Board committees and as Chairman of
Nomination Committee
In recognition of additional time and responsibilities as Chairman of
Audit Committee
In recognition of additional time and responsibilities as Chairman of
Remuneration Committee
The remuneration paid and payable, and the benefits provided, to the Chief Executive Officer and key management
personnel (but excluding the Directors’ remuneration and benefits) comprised:
The Chief Executive Officer and key management personnel are not entitled to any post-employment benefits under their
contracts of employment.
In addition to salaries and performance-based payments, the Group also provides non-cash benefits to the Chief Executive
Officer of the Company and key management personnel of the Group.
These non-cash benefits may include the provision of motor vehicles, income protection insurances, life insurances and
medical insurances. In assessing the value of the non-cash benefit provided to the Chief Executive Officer and key
management personnel, the Group has used the value of the benefit that is used for calculating fringe benefit tax grossed
up for the fringe benefit tax that is paid or payable.
The Directors do not receive any other benefits (cash or non-cash) in their role as directors and are not entitled to retiring
allowances on cessation of office.
The scale of fees payable to the Directors was last reviewed and approved by the Board in January 2019, with the current
scale of fees applying with effect from 1 January 2019 set out below:
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9eRELATED PARTIES (continued)
Other transactions
9fOPERATING SUBSIDIARIES OF THE GROUP
Country of
Principal activityincorporation2024 2023
Bremworth Carpets and Rugs LimitedNew Zealand100 100
Bremworth Pty LimitedCarpet salesAustralia100 100
Cavalier Bremworth (Australia) LimitedCarpet distributionNew Zealand100 100
Bremworth Spinners LimitedCarpet yarn salesNew Zealand100 100
Elco Direct LimitedWool acquisitionNew Zealand100 100
9gEVENTS AFTER BALANCE DATE
There have been no events subsequent to 30 June 2024 which would materially affect the consolidated financial statements.
9hCLIMATE-RELATED DISCLOSURES
Understanding, and dealing with, the impact of climate-related risks
The Group deals with many entities and organisations in the normal course of business. The Group is not aware of any of the
Directors, the Chief Executive Officer or key management personnel, or their related parties, holding positions in any of these
entities or organisations that result in them having control or significant influence over the financial or operating policies of
these entities or organisations (other than as disclosed above).
The Group does not transact with the Directors, the Chief Executive Officer or key management personnel, and their related
parties, other than in their capacity as directors and employees, except that they may purchase carpets and rugs from the
Group for their own domestic use. These purchases are on the same terms and conditions as those applying to all
employees of the Group and are immaterial and personal in nature.
Interest (%)
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.
In relation to this risk, work to understand natural hazards at all of the Group’s manufacturing sites as well as available
mitigation strategies is ongoing. These mitigation strategies will include 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.
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.
Carpet sales and
manufacturing
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024 (continued)
9OTHERS (continued)
9hCLIMATE-RELATED DISCLOSURES (continued)
Risk mitigation and business continuity plans
Insurance
The Group has in place insurances to protect it against losses arising from climate-related events.
Financial implications
9iSTANDARDS, INTERPRETATIONS AND AMENDMENTS TO STANDARDS
The Group has applied the following amendments for the first time for the annual reporting period commencing 1 July 2023:
-Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to NZ IAS 12, and
-Disclosure of Accounting Policies – Amendments to NZ IAS 1 and IFRS Practice Statement 2.
There are no new, or pending, standards or amendments to existing standards which have, or are expected to have, a
material impact on the Group.
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 ongoing
staged reinstatement of the Napier plant is 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.
While cover for material damage and business interruption as a consequence of floods (with cover including the recently
reinstated Napier dyehouse) 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 will continue to work with its insurance brokers to
better understand what would be required for its insurers to reinstate full flood cover for the Group over time.
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 30 June 2024 other than those already recognised following Cyclone Gabrielle
as discussed at note 3 (Cyclone Gabrielle) to the consolidated financial statements for the year ended 30 June 2024.
The Board will continue to closely monitor developments in this area and, in particular, the scope of future insurances
against flooding.
These amendments did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
60
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.