Bremworth profit up 29% after tax
CARPET and rugby manufacturer Bremworth — which is now focusing on New Zealand wool fibres — has emerged from its ‘‘transformational year’’ and posted a 29% increase in net profit after tax to $2.2 million.
The company has reaffirmed its promise to grow demand for New Zealand wool, saying strong revenue growth was expected across Australasia as educated consumers began to move away from synthetic carpets towards more natural, highperforming wool alternatives.
In its financial results for the year ended June 30, released yesterday, Bremworth said its financial and strategic progress was ahead of its transformation plan.
The company described the results as pleasing, particularly given the impact of Covid19 in the first half of the year, and the general economic slowdown and longer residential building timeline due to key material shortages in the second year.
On a comparative basis, the previous year also included a oneoff benefit from the sell down of synthetic carpets as well as wage subsidies brought forward from FY20, and a release of inventory provisions.
Revenue was down 14% from $111.6 million to $95.5 million while EBITDA was up 4% from $4.7 million to $4.9 million.
Chairman George Adams said the move by Bremworth to shift to 100% New Zealand wool fibres had ‘‘led a movement’’ in the flooring industry towards natural materials.
With wool estimated to represent about 15% of the carpet market, there was an ‘‘enormous opportunity’’ to rebuild wool’s share, he said.
The structural transformation undertaken in the past year was one of the essential planks of its strategy to profitably grow its business. It was now heading into the new financial year with a stronger operating platform, continued consumer demand and a focus on driving sales of its carpets and rugs, he said.
After much deliberation, the board declared no dividend, saying the business needed to continue to invest for the future.
Bremworth had committed to two decarbonisation projects; a $2.5 million project at its Napier carpet yarn spinning plant to reduce its reliance on natural gas process heat through optimisation and transitioning to electric high temperature heat pump technology — which was being 38% cofunded under various funding programmes — and the replacement of a gasfired dryer with an alternative radio frequency dryer for use in felted yarn production at the Whanganui carpet yarn spinning plant.
The company has also launched its Rug Innovation Programme, which allows it to rapidly experiment with, develop and test sustainable manufacturing and design options for rugs, with the longterm aim of rolling successful initiatives out across its carpets.
As part of that, Bremworth had recently developed a fully compostable prototype rug that could be repurposed into other products or ‘‘safely returned to the earth’’ at the end of its life.
Bremworth won the Innovation and Collaboration Project Award at the recent Primary Industries New Zealand Awards in recognition of its sciencebased and researchled sustainability programme.