Bremworth posts first half loss, profits dogged by litigation

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Bremworth's loss narrowed in the first half. Photo / Whanganui Chronicle

New Zealand carper maker Bremworth has reported a first-half loss of $780,000, with profits dragged down by ongoing litigation between itself and competitor Godfrey Hirst.

The loss compared to a $1.0m profit in the previous comparative period to December 31, 2022.

"Profits have been impacted by litigation, including the ongoing defence required to fight American-owned Godfrey Hirst which continues to be a drag on resources and costs," the company said.

Godfrey Hirst dropped its damages claim last year but has sought court orders in the form of corrective statements and an injunction over alleged misleading statements in Bremworth's Going Good marketing campaign.

A court hearing is set down for later in the year.

Bremworth, whose Napier facilities were hit by flooding on February 14, said its board concluded that uncertainties arising from the deluge were not significant and were able to be managed.

The Napier yarn spinning plant is a key plant within the group's woollen carpet operation, supplying woollen spun yarn to the Auckland carpet plant for conversion into carpet and dyed fibre to the Whanganui yarn spinning plant.

Bremworth, formerly Cavalier Carpets, said it continued to run campaigns to support a mid to long-term brand position as the market leader in NZ made, NZ wool carpet and rugs.

"Importantly, we embarked on a bold distribution expansion strategy in Australia to enhance our brand presence," it said.

Australia represents around half of Bremworth's total sales presently and the company expects the proportion to grow significantly over the coming years.

Bremworth's move to all-wool has seen other brands in NZ and Australia launch new wool products.

"This is not unexpected and indeed validates our move and the progress we have made, while also sharpening the focus on natural carpets as an alternative to plastic-based carpet," the company said.

The carpet and rug business was still growing year-on-year, it said.

Australian carpet and rug revenue was up eight per cent on the previous year despite the deliberate move away from low-margin high-volume commercial business in 2022 to focus on premium residential consumers in that market, and the macro-economic headwinds faced in NZ and Australia, the company said.

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