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.
Quote from: Basil on Feb 27, 2025, 10:40 AMBRW - 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.
The tender for 80,000 metres of carpet for Kainga Ora is due tomorrow,here's hoping Bremworth gets some / all of it.
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
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.
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.
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 ?
Quote from: Turkey on Feb 28, 2025, 07:10 AMHowever 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
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.
Quote from: Basil on Feb 28, 2025, 08:49 AMI 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
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.
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
Quote from: winner (n) on Mar 01, 2025, 08:45 AM...................................................................
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.
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.
IMG_6089.png
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.
Seems some disgruntled shareholders ....wanting entire board to bugger off
https://announcements.nzx.com/attachment/438803.pdf
Maybe not too happy with all that cash burn at the latest report?
Good news is the language in the release today on "soliciting an attractive offer" and "interest from multiple parties" seems positive.
Quote from: Gerald on Mar 03, 2025, 09:06 AMMaybe not too happy with all that cash burn at the latest report?
Good news is the language in the release today on "soliciting an attractive offer" and "interest from multiple parties" seems positive.
Yes I agree. Thanks for your write-up mate.
I have however translated this corporate speak into real world language for people
Independent chair of Bremworth, George Adams, said: "The interest from a number of
offshore and domestic parties reflects the value and high regard of our company. The interest has been created because we have a fair bit of cash on hand and some of our competitors believe they can asset strip / self fund a breakup of this company and get some of the parts that are worth something for next to nothing.
Maybe the four are 'convinced' that the Board will think the biz is heaps more valuable than prospective offers and reject them as being 'opportunistic'
Interesting one of 4 'Mr Robert Hewett, is currently the Chair of Woolworks, which has previously publicly stated its interest in acquiring certain assets of Bremworth.'
https://www.rnz.co.nz/news/business/543536/bremworth-leadership-faces-rebellion-over-slumping-profits
Quote from: Basil on Mar 03, 2025, 09:37 AMhttps://www.rnz.co.nz/news/business/543536/bremworth-leadership-faces-rebellion-over-slumping-profits
Hope Hewitt didn't see that chart I posted yesterday ...things started going downhill since 2009
Honestly I doubt whether a change in board or management will make much difference ....wool carpets not a good biz to be in
Sell it for a buck a share best outcome for shareholders
Agree Winner. I don't see a successful future for the company with just some tinkering with the operational model. Your image says it all and on smaller margins.
Brief review of the financials yesterday got me thinking that I am not surprised there is an attempted board coup, announced the day after those financials were released because the cash burn of 34 cents per share in just 6 months is really shocking. Frankly, It won't take them long to burn through that insurance payout (59 cps) if the board are left to their own devices.
I got to thinking too, how many times have we seen boards reject offers for poorly performing companies before because it's below their assessment of fair intrinsic value? It happens more often than not, right? Taking into account this high risk, the prospect the shares could easily halve if interested parties are spurned, the extraordinary cash burn rate and the fact their business model is basically broken, this is a riskier situation than I originally envisaged.
Basically, a binary outcome heads you win and tails you lose, and you are trusting the board to do the right thing, IF they end up getting a half decent offer for the company. Hmmm Plenty of risk here that's for sure.
Quote from: Basil on Mar 04, 2025, 10:50 AMbecause the cash burn of 34 cents per share in just 6 months is really shocking.
I wonder with the insurance payout if there were strings attached. Was a portion of it earmarked by the insurers for reinstating lost plant etc.....have there been any statements around that?
No mention of attached strings.
Insurance and dividends
We are pleased to have reached a final settlement in relation to Cyclone Gabrielle insurance claims. Earlier in February, we received final cash proceeds of $42m.
We are nearing completion of the key works required in Napier. No further reinstatement of machinery is planned at this stage. We will focus on existing assets to produce products and new revenue streams through the plant including contract dyeing. There is also potential for subleasing to support cashflow being investigated.
While we experienced cash outflows in 1H25, we are confident in materially reducing our cash outflow to enable the return of excess cash to shareholders. The amount returned to shareholders and timing of this depends on the performance of the business, as well as the outcome of the Strategic Review.
https://www.stuff.co.nz/politics/360605837/stuff-politics-live-blog
BRW are "well positioned."
Back into synthetics
Good move as they weren't going to survive long just on wool ....that was just a dream
https://announcements.nzx.com/attachment/443025.pdf
The company will recommence production of synthetic carpet at its Auckland-based facility in
the next financial year.
I note their year ends 30th June.
Therefore start synthetic production July this year.?
Misleading Consumers With Past Advertising
May 1, 2025, 12:40 GMT+12Less than 1 min read
(https://s3-symbol-logo.tradingview.com/bremworth-ltd-npv.svg)BRW0 (https://www.tradingview.com/symbols/NZX-BRW/)
Bremworth (https://s3-symbol-logo.tradingview.com/bremworth-ltd-npv.svg)BRW (https://www.tradingview.com/symbols/NZX-BRW/) admitted that certain of its past advertising from its 2020 marketing campaign may have misled some consumers, according to a Wednesday New Zealand bourse filing.
Godfrey Hirst had alleged in a court proceeding that aspects of that campaign mischaracterised the relative environmental and health impacts of synthetic and wool carpets and breached the Fair Trading Act.
Bremworth has denied breaching the act but said it will remove the advertisements and will not use them again.
The parties have settled the court proceedings.
Bremworth's shares were down almost 2% in recent Thursday trade.
Chart self explanitory - The board tried to create a differential between themselves and other manufactures which kinda bit the big one and are now back manufacturing the full range.
BRW_2025-05-09_10-47-46~2.pngBRW_2025-05-09_10-47-46~2.png
Liked this statement so much I added to my holding this afternoon,after getting the wife onboard this morning..
"The company will recommence production of synthetic carpet at its Auckland-based facility in
the next financial year."
No new capital expenditure is required as the company
already has all necessary equipment and capability within its existing business. The company
anticipates a minor increase in headcount to support the additional volume.
https://www.rnz.co.nz/news/business/560769/carpet-maker-bremworth-reverses-wool-only-policy
Andy Caughey, chief executive of industry group Wool Impact, said Bremworth manufacturing synthetic carpets again didn't minimise their commitment to wool or their wool carpet offering.
"This range extension, which includes synthetics, will strengthen the company's operating model by optimising its manufacturing capacity and generating more revenue as it continues to invest and expand its wool business," he said.
Hewett, who replaced former chair George Adams, said there was strong demand from major New Zealand and Australian carpet retailers for Bremworth to produce both synthetics and wool.
He said by not having synthetics in their portfolio they had made things more difficult.
"The challenge that we have with the business is about 85 percent of the carpet floor covering market is not wool and we're missing out on it. We need to spread our costs across a wider base. Our customers are clearly looking for a synthetic product."
He said they were also very mindful of stakeholders.
"I am a farmer of wool and I do this with a heavy heart but the company's viability quite frankly is
Quote from: lorraina on May 13, 2025, 05:53 PM"The challenge that we have with the business is about 85 percent of the carpet floor covering market is not wool
A very sad indictment on the previous directors they ignored this highly relevant fact. Just ran the business, almost into the ground while ignoring the elephant that was not only in the room, but just about trod them to death. The previous directors were total Muppets. At least shareholders have a chance now. Good luck.
The new board are looking to make the business viable.
There will be no call on shareholders for new capital,as they have the $42 mil insurance money,which is the same amount as their current market cap.
So far Rob Hewett and the new board are making good decisions,so as you point out shareholders have a chance now..
The floods were a blessing for Bremworth ....saved them from oblivion and has given them a chance to do it all over again
No worries as this time it's different
Off course its different this time.
New hybrid supply chain now in place,new board bringing back manufacturing of synthetic carpets,and with a pot full of cash ready to make it work.
Quote from: lorraina on May 14, 2025, 09:09 AMOff course its different this time.
New hybrid supply chain now in place,new board bringing back manufacturing of synthetic carpets,and with a pot full of cash ready to make it work.
I'd hazard a guess your enthusiasm about Bremworth will wane at about the same speed as their financial performance disappoints
Must admit, on looking through the financials a while back and the way they have been burning through cash in the past, its scary how badly they have been performing. Yes, the companies viability is very much in question. Has been a systemic underperformer for so long now...one wonders how realistic the prospects are of a decent turnaround ? Time will tell, too many unknowns and too much risk for me. I am sure the new directors will give it their best shot. Thankfully no new capex to make synthetic carpet. Hope they don't burn through much of that insurance payout so shareholders have something left if it all gets too hard. Its good that the recent fire at the Whanganui plant was quickly contained. https://www.nzherald.co.nz/whanganui-chronicle/news/investigation-into-fire-at-bremworths-whanganui-plant/CBVBJP5FPZGNPFLDXDEODID2NY/
Quote from: winner (n) on May 14, 2025, 09:23 AMI'd hazard a guess your enthusiasm about Bremworth will wane at about the same speed as their financial performance disappoints
Most probably correct...lol
Quote from: winner (n) on Mar 01, 2025, 09:21 AMI 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.
IMG_6089.png
Fnasil this reflects your post...fom a month or so ago
Wonder what's going to change
Picture says a thousand words mate. That's a bloody grim image and its going to take an enormous effort to turn the ship around.
Sales barely one third of what they were a decade ago.
Quote from: Basil on May 14, 2025, 03:25 PMPicture says a thousand words mate. That's a bloody grim image and its going to take an enormous effort to turn the ship around.
Sales barely one third of what they were a decade ago.
Plenty of room for growth with the heavy lifters now in place.
So far positive announcements.
No capital raise,or heavy borrowings, as they have more cash than their market cap.
Hybrid supply chain in place, as is their wholesale retail outlets in both NZ and Australia wanting both wool and synthetic carpets.
A lot of goodwill in the market place for BRW.
Now they have to provide what the market is wanting.
Can they do it.?
Quote from: winner (n) on May 14, 2025, 12:42 PMFnasil this reflects your post...fom a month or so ago
Wonder what's going to change
We had a carpet project in 2023. While the quoted Bremworth carpet looked good, We found a very similar look and quality for about 2/3 rd of the Bremworth price.
Guess which carpet we choose? Ah yes, this is why their revenue keeps dropping.
Quote from: BlackPeter on May 14, 2025, 05:27 PMWe had a carpet project in 2023. While the quoted Bremworth carpet looked good, We found a very similar look and quality for about 2/3 rd of the Bremworth price.
Guess which carpet we choose? Ah yes, this is why their revenue keeps dropping.
I understand that about 75% of homeowners would prefer wool in their homes,...but 75% are not purchasing wool ...synthetics instead
They should have known this but a bit sad that carpet retailers had to tell them this
Never mind Chief Product Officer leaving next week
And raving about this new hybrid supply chain what can go wrong
Quote from: winner (n) on May 17, 2025, 10:19 AMI understand that about 75% of homeowners would prefer wool in their homes,...but 75% are not purchasing wool ...synthetics instead
They should have known this but a bit sad that carpet retailers had to tell them this
Never mind Chief Product Officer leaving next week
And raving about this new hybrid supply chain what can go wrong
Just for the record - we did prefer wool, and we did buy wool. Just not from Bremworth.
Quote from: BlackPeter on May 17, 2025, 04:27 PMJust for the record - we did prefer wool, and we did buy wool. Just not from Bremworth.
Don't blame you for doing that
Highlights one of main problems facing Bremworth ..for a touted super premium product their gross margin is pretty low which gives them little room to become 'competitive'
Distribution costs are also pretty high (as %age of sales) and a hybrid supply chain probably won't help that
But you'd hope that a hybrid supply chain would alleviate the need for future $4m stock writedowns,
Good luck to them I say
Can't seem to get over my morbid fascination with 'train wrecks' ....and the Bremworth one been going for many years.
Had a look at 2016 Annual Report. First page was this bit -
We've done the hard yards and made big calls.
None were easy, but they were necessary.
The direction is clear and our Company is now completely aligned and focused on core business. The benefits are starting to show. However there is much to be done and many challenges lie ahead. But we are in the best shape to meet them.
Also they raved about going the Kaizen way. Remember that fad.
Back then sales were about $200m ...now a lot less than $100m
Probably done away with Kaizen and now doing the new management fad of a hybrid supply chain.
Just as well this time it's different ..I watch with interest
Two other things worth considering.
The steady sales decline over the years is against a backdrop of a growing population.
Inflation over all that time means in real inflation adjusted terms the slowdown in sales is much worse than the grim situation that's already crystal clear. It just seems to be in systemic decline. Whether the new directors can turn the ship around is anyone's guess.
Quote from: Basil on May 18, 2025, 03:40 PMTwo other things worth considering.
The steady sales decline over the years is against a backdrop of a growing population.
Inflation over all that time means in real inflation adjusted terms the slowdown in sales is much worse than the grim situation that's already crystal clear. It just seems to be in systemic decline. Whether the new directors can turn the ship around is anyone's guess.
They say Re-entering commercial market in Australia. But almost non-event in specifier market according to my industry contacts. I hear Godfrey Hirst kill them in NZ commercial so hard to see them making much of an inroad in Australia.
Here's one of Godfrey Hirst wins ...Summersets St John's complex. Pretty cool eh
https://www.ghcommercial.com/projects/summerset-st-johns-auckland-new-zealand
I heard some Bremworth went into The Helier ...Oceania prob would not have cared paying over the odds eh
Thanks, that was an interesting read. I find it interesting how interior designers can change the mood of a room through the use of light, colors and mixtures of textures, floor coverings, fixtures and fittings.
We're very fortunate to have eucalyptus hard wood flooring throughout most of our home that looks almost as stunning as when out home was first built 25 years ago. The Cavalier bremworth carpet in the bedrooms is well and truly past its best before date and badly needs to be replaced. We'll probably go with a synthetic carpet replacement.
I think the Bremworth directors have a huge amount of work in front of them. I bought in a little while back as a small punt based on the large insurance settlement but quickly lost all enthusiasm when I saw the atrocious rate of cash burn in the half year report. Might have made enough to re-carpet a couple of the bedrooms, can't remember as it was so small and insignificant.
Basil ...they might still be taken over ...before they burn through that cash
Sure, that's a possibility. KW reckons FBU could be a takeover target too but there's deep systemic issues there as well. I'm playing the takeover game with MCK and I reckon that remains in play for 2026 so I am retaining a significant sized holding there. I like to keep things simple and try and pick the takeover target that I think has the best chance of happening and only one takeover play at a time and additionally as Gordon Gekko famously said in the movie Wall Street, pick the dog with the least fleas. Maybe not flea's, but an awful lot of carpet beetles at Bremworth ;)
Quote from: Basil on May 19, 2025, 11:40 AMThanks, that was an interesting read. I find it interesting how interior designers can change the mood of a room through the use of light, colors and mixtures of textures, floor coverings, fixtures and fittings.
.....
Interior designers, architects, specifiers etc are key to getting decorating products (paint, fabrics, flooring etc) specified on commercial jobs and to a certain extent new home builds.
Suppliers having good relationship with them is key to success in this segment,
It seems Bremworth haven't done a good job in this segment .....and re-entering commercial in Australia is a big step. Good luck to them.
Nicola Willis confirms Kainga Ora to use wool
Good stuff ....zillions of $s for Bremworth
That'll put the hybrid supply chain a good test
And good news for taxpayers as well
Nicola says wool is 'cheaper' than nylon
And good news for Bremworth ....when Mike asked Nicola if Bremworth is the one Nicola said that we'll announce the successful tenderer at another date
The good ol' government should tretching out good news announcements to make it ookike they doing good things for the country
Of course it's Bremworth
Win win around
And Mike mentioned that there's more than 4,000 new properties planned over next few years
So 4,000 times X sqm per home times $Y per sqm equals zillions for Bremworth
Whose going to guess the X and Y
And maybe schools need wool as well
Quote from: winner (n) on Jun 12, 2025, 09:23 AMWhose going to guess the X and Y
I'll take a "wild guess", you hold heaps of these ;D
My other guess is they will put the quotes out to tender and Godfrey Hurst will win the supply contract.
Quote from: Basil on Jun 12, 2025, 10:14 AMI'll take a "wild guess", you hold heaps of these ;D
My other guess is they will put the quotes out to tender and Godfrey Hurst will win the supply contract.
Can't give a government contract for NZ houses to a Yankee company
Perhaps GH will,perhaps BRW will.win Govt contracts?
BRW with a market cap of just $44.45 is looking interesting.
Cashed up with $42 mil insurance money.
Hybrid supply chain in place.
Experience interim CEO in Craig Woodford.
Focussed board under Rob Hewitt.
Govt promoting wool carpets.
BRW will also produce Synthetic Carpets,using existing plant and sales channels.
I hope it works out for shareholders and the new management and board can substantially reduce or completely eliminate the extraordinary rate at which this business has been burning through cash. There's a huge amount of work to do to prove this is a viable business.
Quote from: winner (n) on Jun 12, 2025, 09:23 AMAnd Mike mentioned that there's more than 4,000 new properties planned over next few years
So 4,000 times X sqm per home times $Y per sqm equals zillions for Bremworth
Whose going to guess the X and Y
And maybe schools need wool as well
I've heard that KO homes basically need to be fully refurbished every 18 months. Because the tenants ruin them. 360 KO homes a year burn down for starters. Another 120+ that need a full meth clean up.
This will be like a "ministry of works" contract for Bremworth. Hopefully the money they make from the Govt will allow them to achieve supply chain and manufacturing efficiencies that result in cheaper prices for all customers.
Quote from: KW on Jun 14, 2025, 02:17 PMI've heard that KO homes basically need to be fully refurbished every 18 months. Because the tenants ruin them. 360 KO homes a year burn down for starters. Another 120+ that need a full meth clean up.
This will be like a "ministry of works" contract for Bremworth. Hopefully the money they make from the Govt will allow them to achieve supply chain and manufacturing efficiencies that result in cheaper prices for all customers.
What a terrible waste. Tenants like that deserve a house with steel interior, similar to the public toilets.
They should change the rules and make companies like STU benefit from equipping these houses for eternity, instead of wasting money in refurbushing houses again and again and again ...!
All go at Bremworth
Oozing posivity
https://announcements.nzx.com/attachment/448086.pdf
Quote from: winner (n) on Jul 24, 2025, 08:44 AMAll go at Bremworth
Oozing posivity
https://announcements.nzx.com/attachment/448086.pdf
Seem to be trying their best to reduce the appeal to an acquirer... Or maybe a buyer will get excited with the expansion story. Who knows, could be the next A2 :-\
It was the insurance money that attracted me to BRW.
However the story has now changed.
I think the new story and strategy will be BRW's only chance to get business to being viable .
So far it looks to me as they are doing the right things,so I do not mind waiting and missing an early payout.
QuoteBremworth is working with industry group, Awatoto Industrial Action Group, to develop a flood
mitigation solution in conjunction with the Hawkes's Bay Regional Council and the Napier City
Council to prevent a repeat of the impact to the business community in that location following Cyclone
Gabrielle. This initiative has local, regional and national government support.
I hope we don't get another Cyclone event anytime soon and that their plans to mitigate future flood risks are successful but I think its a very risky move rebuilding on the same site. All the best to holders.
Segment sales since 2019 below
Wonder when sales (esp carpet etc sales) will get back to 2019 levels
H125 were up ..slightly ..so heading in right direction :):t_up:
Bit sad that carpet sales are only half what they were 6 years ago ..but that's a sign what's possible eh.
IMG_6203.png
Sales are in steep decline. Inflation has been 23% in the last 5 years so in inflation adjusted terms, the real value of sales has fallen even more precipitously. e.g. sales in 2024 in inflation adjusted terms are just on $65m in 2019 dollar terms, (less than half what they were 5 years previously). You have to be very "brave" to think changes at the board level will change that alarming trend.
The following sounds very positive;
Media release 24 July 2025
Bremworth Expands Napier Production in $6 million Post-Cyclone Rebuild
Carpet manufacturer, Bremworth (NZX: BRW), is expanding production capacity at its Napier plant
more than two years after the site was heavily damaged by Cyclone Gabrielle, marking a key stage
in its return to full domestic production of its woollen yarns and a boost to local employment.
Bremworth CEO, Craig Woolford, says the company is investing $6 million in its Hawke's Bay facility
to reinstate key yarn making equipment. The move is designed to ensure greater efficiency, product
and quality control and significant lead time improvements, while avoiding excess capacity.
He says they plan to operate three shifts 24 hours a day, every weekday and will hire up to 40 new
staff to accommodate expected demand.
"As a result of the cyclone, most of our Hawke's Bay facility was taken offline. To maintain carpet
production, we introduced a hybrid yarn supply model which saw increased quantity of our yarns
processed externally, including offshore. Rather than just reinstating everything, we've taken the
opportunity to rebuild smarter – in the process, allowing us to ramp up yarn capacity as demand
grows," says Woolford.
"We're bringing back the core pieces of equipment needed to give us flexibility and headroom while
keeping costs down.
"The reinstated capacity brings Bremworth back to full operational strength, with both mills going to
be able to meet current demands and support the company's plans to scale for growing international
demand."
Woolford says key processes, including the site's dye house and other lines, are already operational.
The first stage of the current equipment reinstatement is expected to be operational by the end of
August, with a second stage three months later.
The production expansion is expected to dramatically reduce lead times, from up to six months down
to six weeks, and cut yarn inventory by half, while allowing the company to take full control of yarn
quality again.
"We'll also be rehiring a range of specialised staff in the process. "It's not just about rebuilding
production but also restoring local capability, building resilience and bringing jobs back to Hawke's
Bay."
Woolford says the reconfigured site gives Bremworth the ability to scale quickly in response to export
growth, including new interest from the US and Australian markets.
"If demand spikes, we've got capacity we can activate. Each new addition takes about three months
and hundreds of thousands of dollars to bring online, but that's a good problem to have," he says.
Bremworth has already begun phasing out its temporary hybrid yarn supply model and plans to bring
yarn production fully back into its own New Zealand facility. Woolford says the move aligns with the
company's focus on quality control and environmental impact.
"We're proud of what we are doing. It's a win not just for the business, but for Napier and the wider
New Zealand manufacturing story."
Bremworth is working with industry group, Awatoto Industrial Action Group, to develop a flood
mitigation solution in conjunction with the Hawkes's Bay Regional Council and the Napier City
Council to prevent a repeat of the impact to the business community in that location following Cyclone
Gabrielle. This initiative has local, regional and national government support.
ENDS
For furth
Bremworth play in the residential and commercial markets....both new and redecorating work.
Indicators of the state of the market are -
- Building consents data for residential and selected commercial builds. Using the floor area numbers gives a good indicator of where the market is heading
- House sales activity (number of sales) because quite often people move in to their new home and start redecorating ...maybe new carpets.
- The general mood of householders. The consumer confidence survey has a question 'Is this a good time to buy a major household item?' and this is also a lead indicator.
In a past life in a similar related industry with same drivers I put these into a multiple regression model to forecast where the market was heading. Quite high accuracy and stood the test of time.
If we look at these today building consents indicate no growth for the next 12 months and maybe longer as floor coverings last part of any build. Property sales numbers are picking up so that's positive for floor coverings. But consumer confidence is in the dumps big time which isn't good for floor covering sales (like we'll make do with what we got until better times)
So overall these lead indicators are saying not much market growth in New Zealand until 2027
So Bremworth need to take (regain) market share to grow ....just as well back into synthetics which will against all they stand for will the growth engine for them in near/medium term
That's how I see it. The related industry I mentioned is currently playing in a stuffed market as well
BRW have stated their is demand from their Australian and NZ customers for synthetics.
When I was a sales rep, when our company produced something customers asked for ,I always said to them;"we listened to you and have produced what you asked for"..Result we got outstanding orders.
I expect BRW will get the same response .
With BRW having excess capital they will most probably offer selected retailers very generous terms to get their product into the market place.
Quote from: lorraina on Jul 27, 2025, 09:48 AMBRW have stated their is demand from their Australian and NZ customers for synthetics.
When I was a sales rep, when our company produced something customers asked for ,I always said to them;"we listened to you and have produced what you asked for"..Result we got outstanding orders.
I expect BRW will get the same response .
With BRW having excess capital they will most probably offer selected retailers very generous terms to get their product into the market place.
Jeez percy ..... that 'offering very generous terms' sounds ominious
Margins are already low ...and going lower with more lower margin synthetics
Hooe they not too generous ...buying business not always a good strategy
Often incentives do not cost the supplier a great deal.
NZ's top book rep comes to mind.
When selling into shops he made sure the retailer stated how many copies they wanted.
Retailer to rep.I will take 10.
Top Salesman.That's good,we will match that with 10 on SOR.[Sale or return.]
When I was selling books we had Briscoes on an incentive .Reach certain targets they received higher discounts.
Thinking of the top book rep reminds me of one of his great tricks.
He did a lot of author tours..He had a nack of being able to copy their autograph.
Next visit to a shop went like this.
Retailer....Have you any more of ????'s signed book.?
Top Salesman knowing they would want 3 or 4,would say yes I have 10 left.
Retailer.I will take them.
Top Salesman then had to go out to his car and sign 10 copies.
Often he had already signed a good number ....lol.
Bremworth rep to Carpet Court buyer - here's our new synthetic range you said we should have
Carpet Court man - what's the discount we'd get
Bremworth rep - 40% off list
Carpet Court man - jeez that's the same as we get now and you begging us to buy more
Bremworth rep - ok ....it's 50% off list on EVERYTHING you buy
Carpet Court man - good ....and a 10% advertising allowance
Bremworth rep - seems fair. Deal done
Bremworth rep goes away happy and Carpet Court beams a big smile ...win win
I trust BRW employ astute reps.
Good reps are worth their weight in gold.
Quote from: lorraina on Jul 27, 2025, 04:02 PMI trust BRW employ astute reps.
Good reps are worth their weight in gold.f
Several months later
Bremworth CFO to CEO - what the f### are our sales reps up to
CEO ... going gangbusters eh, doing a great job
CFO - but giving the stuff away ...our f###in gross margins are shot ...big time
CEO - but sales increase offset the lost margin im told
CFO - bull shit .... You'll be explaining declining profits to the market and shareholders won't like that.
CEO - shareholders won't mind, they love the story we telling them and this is just a step on the transformational journey.
CFO - OK but this is a disaster
A bit off topic but driveways and fencing is usually the last part of a new build. So it will be slower for them.
Quote from: winner (n) on Jul 27, 2025, 09:37 AMIf we look at these today building consents indicate no growth for the next 12 months and maybe longer as floor coverings last part of any build. Property sales numbers are picking up so that's positive for floor coverings. But consumer confidence is in the dumps big time which isn't good for floor covering sales (like we'll make do with what we got until better times)
So overall these lead indicators are saying not much market growth in New Zealand until 2027
Bremworth in BusinssDesk today. Seems to be based on discussion with Hewett
Strategic review going well, costs under control and renewed focus on increasing sales (with their rejigger sales team)
Nothing really new in article but there were a couple of 'can't say too much at this point in time'
Hewett did say "Having synthetic carpet in our tool bag will grow wool sales." Synthetics would be a "significant [part] but not the majority" of its portfolio, Hewett said.
Ironic synthetics look like they going to save the company
Good to see Bremworth getting media coverage, should help share price
https://businessdesk.co.nz/article/primary-sector/bremworth-says-costs-clipped-and-focus-now-on-sales-growth
Prob paywalled
Crickey!!..... who would have thought??.....takeover offer potentially provides $1.05 to $1.15 per share!
https://www.nzx.com/announcements/459925
Lucky holders! (not me)
Thoughtful comment from Snoopy on the proposed takeover from the other channel.....
I would say it (the takeover) ensures that all that insurance money will be siphoned off to Asia where a new wool carpet factory will be set up. Manufacturing in NZ will be closed down as the price of power and labour soars. NZ farmer suppliers of wool will kow tow to whatever price the Australasian monopoly buyer of wool carpet material, Godfry Hirst, decides to pay. And the price of wool carpet will rise dramatically with the elimination of retail supply competition. How will this deal ever pass the sniff test of NZ's Commerce Commission? Answer: It won't (not in this form at least).
From vague memory Godfry Hirst took over Feltex so surely this proposed takeover should raise questions in terms of market dominance with the commerce commission ?
The Commerce Commission cleared Godfrey Hirst to acquire Feltex assets in 2006, determining it would not substantially lessen competition and would result in public benefits from rationalisation. Although the Commission was initially concerned about the consolidation of wool scouring operations, the final decision acknowledged that benefits from productivity increases and ensuring the viability of the carpet industry outweighed these concerns.
Things got a bit complicated a few years later when Godfrey Hirst acquired a couple of scouring/tufting plants which reduced the number of such operations.
Godfrey Hirst was acquired by Mohawk in 2017/(from memory)
Commerce Commission view on this could be interesting as competition definitely lessens. Don't forget Commerce Commission didn't seem too keen on Metro Glass and Viridian merging.You should
Commerce Commission nott convinced merger a good idea
https://www.comcom.govt.nz/assets/Documents/timeline/Godfrey-Hirst-and-Bremworth-Statement-of-Issues-23-December-2025.pdf
For shareholders sake hope Balance right with his Victoria talk ........ but they'll be thinking bargain price I reckon