Bremworth

[Basil]

BRW - Doesn't seem to have its own thread but is subject to corporate action which might lead to an interesting outcome.

Interesting article by Adrian Capital here  https://adriancapital.wordpress.com/blog/

Disc: I have acquired a small parcel.

[Otago K]

BRW - Doesn't seem to have its own thread but is subject to corporate action which might lead to an interesting outcome.

Interesting article by Adrian Capital here  https://adriancapital.wordpress.com/blog/

Disc: I have acquired a small parcel.

Thanks for the thread Basil.
Discl. I have just taken a small holding of this myself at a limit of 57c.

[Rees Dart]

The tender for 80,000 metres of carpet for Kainga Ora is due tomorrow,here's hoping Bremworth gets some / all of it.

[Turkey]

IMHO..if KO management are true to their purpose and mandate, to reduce costs and use product best fit for purpose and ensure NZ taxpayers money is used wisely...wool carpet won't be chosen.

However it's NZ and politicians meddle in everything so it's probably a 50/50 call.


you BRW spruikers might make a few shekels if BRW get the order but as NZ taxpayers we all loose..less money for hospitals, education and other productivity initiatives and everyone will pat themselves on the back for supporting an industry that's dyed in the wool and can't find a way to compete.


Even if KO get the same price for wool vs nylon, there are some inherent performance benefits that each product have that are more important for the decision making. Yes for wool quotes where the product suits the purpose...No for blanket wool use everywhere in my opinion.

Disclosure. just put wool carpet down in my private residence...very happy with it. Feltex.

Rant over..lol

[Basil]

Nylon more suitable for Kianga Ora level units. Bremworth wool carpet is very nice underfoot and high end. We have it at home in the bedrooms, hard wood eucalyptus flooring everywhere else.

Interesting amount of cash BRW will hold once the insurance settlement is paid out. BRW is well and truly ripe for corporate action and streamlining / restructuring to stop the cash burn.

[Turkey]

I noticed the BOD waited till the insurance monies received before announcing the strategic review. I read that as them saying..we have lost out way, we're not very competitive withe wool only offer but we are now at at most attractive point in time to sell up as we have lots of cash and someone can buy our brand and carpet assets...probably Godfrey Hirst..and someone can keep the cash

I thought the best time to do a strategic review would have been straight after the flooding...what do we want to be when we get the insurance money and can re set our business.

Can't see how their next sales report can be that exciting...high end carpet demand in a recession?


My beef is you've got one part of the govt resetting KO and saying...

The new board chair, Simon Moutter, and chief executive, Matt Crockett, claimed that project costs were 12% higher than the market rate due to inefficient designs and unnecessary "bells and whistles".



And then another part of the govt saying...hey the wool industry struggling a bit but we want you to use wool carpets at the same time your reducing building costs by at least 12%...lol.

Anyway GLTH on the cash stripping....better hope they make a quick decision before the company starts spending it.

[Basil]

I hear what you're saying Turkey.
Not surprised the company has had overtures from parties looking to take it over. It's self funding with all that cash.

Unfortunately radical restructuring looks inevitable and the consumer could be the loser if there's less options / competition going forward.

Hope they keep the Whanganui plant going.  Not sure reinstating a full Napier plant is a good idea.  It will flood again in due course as sure as night follows day.  Maybe that's what the corporate raiders are thinking too?  Better off keeping that cash or reinvesting it elsewhere ?

[Red Baron]

However it's NZ and politicians medal in everything so it's probably a 50/59 call.

Not True!  Name vone member of parliament who has got close to even a bronze medal.  Zhey are all 'mid vield runners' at best!  I like ze way you insinuate zhey cannot make an overall percentage add to 100 though!

RB

[Turkey]

Haha good one RB. got me on both basics..spelling and maths

medal to meddle
50/59...to 50/50

Have corrected for you before I head back to primary school for reprogramming ...are we getting lunch delivered at school today? I'm a bit peckish today.

[Turkey]

I hear what you're saying Turkey.
Not surprised the company has had overtures from parties looking to take it over. It's self funding with all that cash.

Unfortunately radical restructuring looks inevitable and the consumer could be the loser if there's less options / competition going forward.

Hope they keep the Whanganui plant going.  Not sure reinstating a full Napier plant is a good idea.  It will flood again in due course as sure as night follows day.  Maybe that's what the corporate raiders are thinking too?  Better off keeping that cash or reinvesting it elsewhere ?

Just skimmed over their report today...
Better get your sniffer out Beagle...lots of cash going out the door...not much sales going in.
NTA going backwards.
No Dividends

How much of that excess cash they gonna burn before they complete their review

[Basil]

Yeah, just had the briefest of glances late this afternoon.  Will get onto it on Monday, or this weekend if I get time.  Noticed the cash burn.  Well and truly ripe for corporate action I reckon and to be quite frank about it with past results over the long term, it fully deserves to be taken over and carved up.

[winner (n)]

You have to admire their honesty with statements like 'Positive revenue growth but below expectations' and ' Margins and profitability need to improve'

Future growth seems to he reliant on re-entering the commercial segment in Australia, exploring new contract manufacturing opportunities and making progress on opportunities to enter the US market, albeit in a deliberate and controlled way.


Commercial market in Australia is tough. It's architect / specifier driven and Godfrey Hirst killed them in the past Hard to see much coming from that

Us market is a dream good luck to them I'd say taking in the likes if Mohawk

Overall operationally Bremworth will continue to struggle to make any decent profits.....what's really changed over the years

The pile of cash and talk if a strategic review has got punters excited. Shares are cheap today if something concrete eventuates so let's hope an acquiror comes along ...soon

One thing management seem keen on selling ..maybe they see the future outlook like me 

[Otago K]

...................................................................

Overall operationally Bremworth will continue to struggle to make any decent profits.....what's really changed over the years

The pile of cash and talk if a strategic review has got punters excited. Shares are cheap today if something concrete eventuates so let's hope an acquiror comes along ...soon

One thing management seem keen on selling ..maybe they see the future outlook like me 

Yep the cash burn to 31 December 2024 tells a part of the story, hope can have confidence that the capital expenditure and Cyclone Gabby element is in the past now.
If I have read it well enough it might hit YE with about it's current market cap $43 million still matching what is held as cash. Do see some moderate upside on the trade / margins, suspect there is some green shots within the more affluent end of Aussie and NZ consumer markets spending. punt I wouldn't like to see drift too much further from where it stands at present.

[winner (n)]

I even have a file on Cavalier/Bremworth ....started when I was working in a related industry and had regular discussions about market conditions etc

Also from a personal perspective kept monitoring financial performance and the morbid fascination was how they usually managed to have a low ROIC

Anyway here's an interesting chart. That 2016 was one if their best years profit wise and it's been downhill ever since

I don't think that will change ...too many things against them. I wouldn't be holding in the hope of much better financial performance

But no doubt a good speculative punt ....betcha they hoping for that white knight to turn up.

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[Basil]

Just a speculative punt for me.  Less than 1% portfolio allocation.  Ripe just like a big juicy Otago apricot to be picked and gobbled up by a competitor extracting huge amounts of cost reductions and synergies from BRW's operations.  Agree Winner, long term prognosis is not all that attractive.