Bremworth woollen carpet and rug maker has reported a sizeable jump in net profit from $2.2 million up to $11m because of insurance payouts after Cyclone Gabrielle inundated the company’s Napier plant.
In the 2023 financial year ended June 30, normalised net profit after tax was down from $1.7m to a loss of $2.4m and revenue was down 6% to $89.6m.
Chief executive Greg Smith said it is pleasing to see revenue remain relatively stable after the loss of the Napier yarn spinning plant.
While the plant remains offline, $35m has been received from insurers as progress payments and that contributed $8.8m to the bottom line, compared with FY22.
Cyclone-related expenses incurred by the company totalled $14.5m while write-offs of cyclone-damaged assets totalled $7.6m.
Smith said the company has $271m in material damage and business interruption insurance cover for the Napier operation and is anticipating significant further payouts.
An independent assessment has placed the estimated cost of remediation of buildings and plant and equipment between $112m and $162m.
Claims under the business interruption policy are expected to occur in FY24 and into FY25.
“While this has undoubtedly been the most challenging event in the company’s long history, we will come through it a more resilient and adaptable organisation.
“If there is a silver lining in this, the cash reserves Bremworth is accumulating due to the insurance payments provide us with considerable options for growth and further investments.
“These options are currently being evaluated as part of an externally facilitated strategic review.”
Smith said most of the staff members in the Napier plant have taken voluntary redundancy and had found other jobs in the district.
“We are also offering to reinstate them if the decision is made to reopen our local operations,” he said.