Photo: Bremworth
- Shareholder group moves to roll Bremworth carpet directors
- Special meeting called to replace the board
- Group claims poor strategy and execution caused major slump in earnings
A shareholder revolt has broken out in carpet maker Bremworth, with a move to dump the current board because of alleged poor leadership causing a fall in sales and earnings.
The current chair of meat company Silver Fern Farms, Rob Hewett, is fronting the rebel group and being proposed as the head of a new board.
"The numbers speak for themselves. The current board has failed to grow the company or deliver value for shareholders," he said.
Hewett said shareholders holding about a third of the company's shares had been canvassed and backed the call for a meeting.
He said the company's earnings have slumped in recent years, with revenue falling from $148.1m in 2018 to $80.3m in 2024.
A decision to stop selling synthetic carpets in favour of wool-only products had not resulted in improved sales, while operating costs remained high.
Cyclone-damaged
Bremworth was hard hit by Cyclone Gabrielle in 2023, which destroyed its Napier factory, forcing it to adopt makeshift arrangements involving its remaining plants in Whanganui and Auckland and third-party suppliers.
It had just settled its final insurance claim for the cyclone damage, and was rebuilding the Napier facility.
Rob Hewett. Photo: RNZ/Carol Stiles
The company reported its six-month earnings last week with a slight rise in revenue but higher costs, reduced margins, and an increased loss of $8.1m, while its cash position deteriorated significantly.
The current board was headed by George Adams, who led the rescue operation for embattled dairy company Synlait Milk, and has been approached for comment.
Hewett said the dissidents did not have faith the current board could turn around Bremworth's fortunes.
"A significant portion of shareholders remain unconvinced that they are the right people to lead it, precisely for the very reasons we believe they should step down."
He said if they stepped aside a structured transition could start immediately.
Bremworth replies
Bremworth's board expressed surprise at the dissident group's call for a meeting, saying there had been no engagement between them prior to the weekend letter calling for a special meeting.
It said the letter represented only 11.5 percent of the company's shares and Bremworth's founder and biggest shareholder, Grant Beil, and other large investors had not signed and were backing the current board.
"The Board notes that the Requesting Shareholders have not previously put forward any candidates for director roles," it said in a statement.
The Bremworth board has started a review of its ownership, looking for potential buyers, and had already attracted prospective bidders.
"We have a clear strategic plan in place ... and are well positioned to deliver, with greenshoots starting to emerge."
Adams said about $5m in cost savings were expected in the coming year, along with a plan to increase sales in Australia.
He said if a sale eventuated then the current board would likely go, and if no deal happened then a "refresh" of the board would be expected.
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