Bremworth (BRW) H1 2025 earnings summary

Executive summary

• Resolved $42m insurance claim related to Cyclone Gabrielle, with final cash settlement received after balance date, strengthening liquidity.

• Revenue increased 8% year-over-year to $42.1m, driven by Elco and initial recovery in Australian carpet channel, though below forecasts due to economic pressures and lower consumer spending, especially in New Zealand.

• Significant investment in inventory and supply chain, with finished stock at pre-cyclone levels and raw materials balance at $18.4m.

• Management is executing strategies for volume growth, margin recovery, and cost reduction, targeting cashflow positive and return to profit in FY26.

• Strategic review of ownership structure underway after external interest and insurance settlement; ongoing engagement with interested parties.

Financial highlights

• 1H25 revenue: $42.1m, up from $39.0m in 1H24.

• Gross margin: 21.3% in 1H25, down from 27.3% in 1H24, mainly due to product mix and increased inventory provisioning.

• Normalised EBITDA: $(4.4)m in 1H25, down from $(1.7)m in 1H24, impacted by margin pressure and higher distribution costs.

• Loss after tax (GAAP): $(8.1)m in 1H25, compared to $(1.7)m in 1H24.

• Net cash outflow from operations: $(21.8)m vs. $(15.8)m in 1H24.

Outlook and guidance

• Targeting cashflow positive and return to profitability in FY26, supported by volume growth, margin improvement, and $5m annualised cost savings.

• Ongoing dividends contingent on return to profitability and outcome of strategic review.

• Continued focus on expanding in Australia, New Zealand, and new markets, with new product launches and contract manufacturing opportunities.