Wool carpet and rug manufacturer Bremworth made a profit of $1.7 million after tax and has a strong cash position and balance sheet.
In the financial year to June 30 it made a 55% improvement in earnings before interest, tax, depreciation and amortisation (Ebitda) and the return to profit compared with a loss of $21.5m in the previous year.
Bremworth is the new company name for Cavalier Corporation, which turned its back on manufacturing with synthetic fibres for an all-wool, sustainable future.
Group profit for the year was $1.7m, which included the costs associated with the right-sizing of the organisation and a $2.6m net gain on the sale and leaseback of the Auckland property.
Revenue was down 5% on the prior year, reflecting the exit from the synthetic carpet market.
Sales of wool carpets grew strongly in the second half, up 17% on the previous corresponding period.
“Already we are seeing a lift in our wool carpet sales, and we expect this momentum to continue as consumer demand grows for natural and sustainable quality products,” chair George Adams said.
Revenue from the wool buying business Elco Direct was down 5%, but it recorded strong margin growth as operating conditions improved.
All debt has been repaid and the cash position at balance date was $22.5m.
Sustainable wool production has struck a chord with sharemarket investors, Bremworth’s share price having risen 90% in the past 12 months, up 25c since the beginning of July to be around 65c currently.
