Bremworth Limited, Annual Meeting 2025

28 October 2025

Bremworth Limited (BRW)

The company will hold its Annual Shareholders Meeting at 1.00pm Wednesday 12 November 2025.

The location is the company’s office 7 Grayson Avenue, Papatoetoe Auckland.

You can also join the meeting online at this link.

Company Overview

Bremworth had its beginnings in 1959 when Doug Bremer established the Bremworth Carpet Company. In 1967, UEB Industries purchased Bremworth Carpet and in 1972 Grant Biel and Tony Timpson founded Cavalier Corporation which was listed on the NZX in 1984. In 1988 they purchased the Bremworth name, distribution rights and plants.

The company changed its name from Cavalier to Bremworth in August 2021 as part of a strategy to become a wholly wool carpet and rug company.

The Napier yarn spinning mill was impacted by Cyclone Gabrielle in February 2023. The company has received payments from its insurers of $104.2 million towards the rebuilding of the facility. It has developed a new hybrid supply chain, reset its baseline cost structure, and invested in its brand, customer experience, R&D, and technology.

Recent Board changes

In March 2025, a group of shareholders requested a special shareholder meeting to remove the existing Board and replace them with Rob Hewett, Julie Bohnenn, Murray Dyer, and Trevor Burt. Later in March the request was withdrawn, with Paul Izzard, Katherine Turner and Dianne Williams resigning from the Board and the four proposed Directors being appointed with Rob Hewett as the new Chair. In July 2025, the remaining former Directors George Adams and John Rae resigned.

Between April and May 2025, the CEO Greg Smith resigned and was replaced by interim CEO Craig Woolford. The Chief Operating Officer and Chief Brand and Product Officer also resigned.

On 1 October 2025, NZ RegCo announced it would suspend trading in the shares if the Annual Report due 30 September 2025 was not released by 8 October 2025. The company released the Annual Report on 7 October 2025.

Scheme of Arrangement

In October 2025, the company announced that it had entered into a Scheme Implementation Agreement with Floorscape Limited. Floorscape Limited is a wholly owned subsidiary of Mohawk Industries Inc., which operates the Floorscape premium hard flooring business and owns carpet manufacturer Godfrey Hirst NZ Limited.

Floorscape Limited has agreed to acquire 100% of the shares in Bremworth for between $1.05 to $1.15 per share, subject to market conditions and business performance. This represents a premium of up to 135% to Bremworth’s share price prior to commencement of the Strategic Review announced in February 2025 and 85% to its most recent closing price prior to the announcement of the Scheme. Under the agreement, Bremworth has the ability to distribute any excess cash above an agreed minimum level to shareholders immediately prior to the Scheme becoming effective. This would represent a payment to shareholders between $0.30 and $0.40 per share. Subject to satisfying the Scheme conditions, Bremworth and Floorscape are continuing to target completion of the Scheme in H1 2026.

Current Strategy

As noted above, the company has had a marked change in business strategy since the refreshed Board was appointed. This is shown in the following image, taken from the Annual Report:

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. This company has flipped from one crisis to another in recent years, moving from being a solid dividend payer to a recovery prospect.
2. NZSA’s concerns over the falling rate of stockturn, and the lengthening of the supply chain, were also addressed, implying that extended credit terms from suppliers should enable an improvement in stock turn, and that there was a necessary expansion of stock in Australia.
3. Accusations of overspending after an insurance payout were refuted strongly.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees: In general, good disclosure. The Board Charter allows payment of special exertion benefits for ‘special services’, with the table of Director Payments in the Annual Report indicating that none were paid in FY25.

We note the statement in the Annual Report “The Directors do not receive any other benefits (cash or non-cash) in their role as directors and are not entitled to retiring allowances on cessation of office. Directors are also not entitled to performance-based remuneration.”

Director Share Ownership:  We note the statement in the Annual Report “There is no requirement for the Directors to hold shares in the Company, with the Directors only encouraged to do so pursuant to the Board Charter.”  This is also NZSA’s policy.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The Remuneration Committee is responsible for implementing the policy.

Incentives: The previous CEO was paid a short-term incentive (STI) in cash and a long-term incentive (LTI) by way of share options. The interim CEO does not receive any incentives.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The STI was awarded at a target of 40% of base salary with a maximum of 60% of base salary. The measures were revenue and EBITDA. The weightings were not disclosed. No award was made for FY25.

LTI options were awarded to the CEO with the CEO then benefitting from the increase in value after a three-year vesting period. No description of the assessment criteria, or the initial value of the award, is provided.

In addition, the company issued 500,000 fully paid-up ordinary shares pursuant to the terms of the Bremworth Equity Plan to the CEO on 10 September 2021, with the consideration for the shares of $208,050 funded by way of an interest-free, full-recourse, loan provided by the Company to the CEO. In general, NZSA does not favour company loans to executives.

No LTI award was made in FY25 and both the STI and LTI have been suspended for FY26.

The company offers does not disclose the gender pay gap and CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

The FY24 Annual Report stated, “The CEO is not entitled to “golden parachute” or “golden handshake” payments on termination of employment, with no such payments, or other specific termination payments, provided for in his contract of employment.”

There is no statement in the FY25 Annual Report.

Director Independence:  All Directors are independent.

Board Composition: In general, good disclosure. The Annual Report includes a ‘collective’ skills matrix; NZSA prefers a skills assessment that attributes skill sets to individual directors to demonstrate their direct contribution to corporate governance and the value they offer to the company.

The nature of the company’s board indicates a commitment to thought, experiential and social diversity, with relevant experience for Bremworth.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

All Directors were appointed 17 March 2025. If the SIA does not proceed, care will be required to ensure an orderly rotation of Directors to preserve institutional knowledge.

ASM Format: Bremworth Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities.

There are good disclosures in the Annual Report and the Board Charter, that Board members are able to seek external or internal advice to support decision-making. The Board Charter notes that the Company Secretary and internal audit roles have access to the Board.

We note following Cyclone Gabrielle the improved disclosure around risk management, and in particular the disclosures around climate related risk and how the company is mitigating and managing this.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no policy on the rotation of the Audit Firm. PwC and the Lead Audit Partner were appointed in May 2021.

Environmental Sustainability

Bremworth is not a climate reporting entity (CRE), because it falls under the financial threshold required to be a CRE. Despite this, Bremworth acknowledges the role that it has to play in the move towards decarbonisation and remains committed to environmental sustainability.

NZSA policies encourage issuers to take a “broad approach” to environmental risks; this may result in disclosures that offer more insight into relevant environmental risks for the business beyond climate change. Bremworth operates under a “people planet and prosperity” framework, with some specific actions outlined within its supply chain to mitigate environmental impacts.

NZSA does not complete RAG assessments on non-Climate Reporting Entities.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  The Annual Report includes an explicit disclosure that no political donations are made.

Financial & Performance

Bremworth’s share price rose from $0.39 to $0.86 (as of 14^th October 2025) over the last 12 months – a 122% increase. This compares favourably with the NZX 50 which rose 5% in the same period. The capitalisation of BRW is $60m placing it 84^th out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

2025 seems to be a defining year for BRW. Firstly, a boardroom coup was amicably resolved, and subsequently the company announced that it had entered an agreement to be acquired by Mohawk Industries at between $1.05 and $1.15 per share subject to conditions being met.

Operating revenues were up 10% to $88.4m, and reverses the trend of falling revenues. However, the gross profit margin fell precipitously to 13% and this led to a reduction in gross profit of 41% to $11.5m. 2025 was a difficult year for retail in NZ.

Although gross profit was reduced after receiving $39.6m of insurance progress payments, BRW reported an NPAT of $19.6m. This meant EPS of $0.271 was delivered, and BRW trade on a PE of 3. On 4^th February the company announced that a full and final settlement with insurers had been agreed. 

BRW is in a solid financial state with the current ratio at 4.94. The company has $42.2m cash at bank, with insurance receipts bolstering this tally. NTA per share is $1.04. Shares trade at an 18% discount to NTA. On this basis, these assets, including the cash, are an attractive acquisition for Mohawk Industries. The debt-equity ratio fell to 0.46. The company has no long-term interest-bearing debt.

Operating cashflows were positive at $15.7m, bolstered by Gabriell insurance receipts.

Inventory turnover rose to 2.68.

Rural Aviation (1963) Limited remains the largest shareholder with a 12.14% holding in the company.

Resolutions

Julie Bohnenn was appointed to the Board 17 March 2025 and is therefore required to offer herself for election. She is a Fellow Chartered Accountant with experience in business restructuring, market disruption, mergers and acquisitions, stakeholder engagement, regulatory compliance, and project governance. Her current board roles are with Farmlands Co-operative Society (Chair of Audit and Risk), Forte Health Group, Reform Radiology and Moana Heights. Previously she has held board positions with J Ballantyne (Chair) and House of Travel Group (Executive Director).

We will vote undirected proxies IN FAVOUR of this resolution.

Trevor Burt was appointed to the Board 17 March 2025 and is therefore required to offer himself for election. He has held leadership roles in the global industrial gas sector in Australia, China, the USA, and Germany. He currently sits on the boards of New Zealand Lamb Company (Chair), Market Gardeners Limited, Landpower NZ Limited, NZ Drinks Limited and Hossack Station. Previously, Trevor has been a board member of MHM Automation (Chair), Ngāi Tahu Holdings Corporation (Chair), Lyttelton Port (Chair), PGG Wrightson (Deputy Chair), Silver Fern Farms and Mainpower NZ (Director)

We will vote undirected proxies IN FAVOUR of this resolution.

Murray Dyer was appointed to the Board 17 March 2025 and is therefore required to offer himself for election. He has 30 years of agribusiness, energy, and international trade experience. His career started in the wool industry with Reid Farmers and has included executive and director roles in textile trading and co-founding an energy and commodity services business in London. Murray founded and was Managing Director of Simply Energy. He is a shareholder and director of Utility Data Services and an investor in agritech. He is a Chartered Member of the Institute of Directors, a graduate of the Kellogg Rural Leaders Program and completed an MIT Sloan Management Executive program on AI.

We will vote undirected proxies IN FAVOUR of this resolution.

Rob was appointed to the Board 17 March 2025 and is therefore required to offer himself for election. He   has governance experience spanning agriculture, horticulture, exporting, supply chain and logistics, renewable energy, and retail. Rob is currently a director of NZX listed T&G Global Limited. He is also currently Chair of Farmlands Co-operative Limited, Woolscour Holdings Limited (Woolworks), Hilton Haulage Limited, Fern Energy Limited, Pioneer Energy Limited, AgrizeroNZ Limited and Rewiring Aotearoa Limited. He is immediate past Chair of Silver Fern Farms Limited and Silver Fern Farms Co-operative Limited, a former Councillor of Lincoln University, and past Chair of Wool Impact. He was awarded the Deloitte Top 200 Chair of the Year in 2023 and in 2019 received the Cooperative Business New Zealand Outstanding Contribution Award. Rob also is a sheep and beef farmer, farming 10,000 stock units on a carbon positive 1,020ha medium hill country farm with significant forestry assets in South Otago. Rob is a Chartered Fellow of the Institute of Directors and an alumnus of Lincoln University, with a master’s in commerce and a B. Com (Ag) Economics.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 1.00pm Monday 10 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA