Wool carpet specialist Bremworth has reported steady progress in its transformation away from synthetics, notching up a 29% increase in net profit to $2.2 million in the year ended June 30.
Wool carpet and rugs revenue was steady at $73m while the residual synthetics revenue shrank as inventory was sold.
Wool-buying subsidiary Elco Direct had a good financial year with revenue up 20% to $19.2m as the average selling price increased due to growing demand for strong wool.
Bremworth has a strong cash position of $15m at balance date because of the sale and leaseback of its main plant in South Auckland in FY21.
The listed company is still in the early stages of a five-year transformation to wholly woollen carpets and rugs and during FY22 it exceeded the goals set.
Its share price is around 60 cents, having risen in the past three months from 45c, but below the high point of the past 12 months of 85c reached soon after the FY21 results announcement.
The market capitalisation is $41m on 69 million shares issued.
Bremworth said sales in New Zealand are growing slowly in response to advertising and brand campaigns, while in Australia the company is moving away from high-volume, low-margin commercial segment into higher value residential.
Wool is currently 15% of the carpet market and so there is room for growth.
“Revenues are expected to increase from FY23 as the transformation programme gathers momentum and sales of higher margin, higher value woollen carpets increase.”
Investments have been made into decarbonisation projects at two carpet-yarn spinning plants in Napier and Whanganui and Bremworth received a sustainability award at the recent Primary Industries award series.
Bremworth chair George Adams said there is a shift underway towards natural materials in floor coverings, for which the company is taking credit.
“We are heading into the new financial year with a stronger operating platform, continued consumer demand and a focus on driving sales of our beautiful carpets and rugs.
“We look forward to adding value for our shareholders, staff, and consumers.”
