Bremworth Limited Analysis

Overview

Overview

Synonymous with quality, Bremworth has been voted New Zealand’s most trusted carpet brand* for the last eight years. With manufacturing facilities in Napier, Whanganui and Auckland, Bremworth employs over 400 people and is committed to sourcing its wool from New Zealand growers.

In 2020 the company began to implement its new purpose-led strategic plan when it announced it was exiting synthetic carpet production to focus on redefining Bremworth as a premium design and natural fibre company.

Progressive new initiatives are plotting a fresh course for Bremworth’s future. The team at Bremworth invite you to join them to find a more sustainable way.

Key Milestones :

November 2020 – Re-launched the Bremworth brand

December 2020 - Secured funding to execute the strategic plan, Right-sized the organisation

April 2021 - Secured a $1.9 million grant from MPI’s Sustainable Food and Fibre Futures (SFFF) fund to support Bremworth’s $4.9 million sustainability programme

May 2021 - Celebrated last ever synthetic carpet production

June 2021 - Commenced “Let’s Go Good Together” marketing strategy, Signed up to New Zealand Farm Assurance programme, Appointed new CEO Greg Smith

Markets:

The company is mainly focused on the Australasian woollen carpet and rug markets, but also exports carpet to the USA and Canada where it has identified opportunities in the premium end woollen segments of these markets.

Our growth strategy

• To grow the wool flooring market
• To grow our share of the market
• To expand our presence
• To focus on design-led innovation

Performance

The following information was extracted from Bremworth Limited's half year results, released on 25 February 2026:

During the first half, Bremworth continued to make strategic investments in initiatives aimed at making a positive contribution to Bremworth's performance over time, including the:

• reinstatement of the Napier plant;
• reintroduction of synthetic carpets;
• expansion of the New Zealand and Australian sales teams;
• and ongoing focus on costs.

However, the targeted benefits from most of these investments are not yet reflected in our financial results, with the lead time to volume growth and return to profitability taking longer than anticipated.

First half FY26 performance

Revenue for the first half was $44.7 million, up 6% compared to the prior comparable period, with the increase attributable to a solid performance by Elco Direct. While the volume of carpet sold was up on the prior comparable period, a bias in sales mix towards lower margin products and clearances of excess inventory adversely impacted carpet revenue (slightly down) and gross profit (also lower).

Sales of premium wool and synthetic carpets fell short of our expectations. This was primarily because of the ongoing subdued demand for consumer durables like carpet across both the New Zealand and Australian markets, and delays to the reinstatement of the Napier plant and the reintroduction of synthetic carpets into our product mix.

Gross profit was $6.7 million (down 25% compared to the prior comparable period), representing a gross margin of 15%, compared to 21% in the prior comparable period. While part of this decline in gross margin can be attributed to the deterioration in sales mix, the decline also reflects significant under-recovery of fixed manufacturing overheads due to lower sales volumes and delays in reinstatement of the Napier plant.

On a more positive note, distribution and administration costs were down on the prior comparable period.

Closing cash was $34.3 million as at 31 December 2025, down from $42.2 million as at 30 June 2025. The decline in cash was primarily due to cash outflows from operations ($1.9 million) and capital expenditure ($5.4 million).

These results are disappointing. The strategic investments we have made over the past year have not yet translated into the volume growth needed. We remain committed to those initiatives, but the timeline to reach targeted benefits remains uncertain and there are some risks to achieving these.