Bremworth Limited (BRW.NZ) Earnings Call Transcript & Summary

Good afternoon, everybody. Lock the doors. We have reached the allotted time for the Bremworth 2025 Annual General Meeting for all the shareholders. [Foreign Language] My name is Rob Hewett, and I have the privilege of being the Chair of this company. Today's meeting is being held, obviously, in person, but also online. There's a camera up there behind you through Computershare's meeting platform. I'm welcoming all of you here in person today and to those of you who have joined us online as well. Today's meeting is notable for a number of reasons. It's the first Bremworth annual meeting for all of your directors at the table today and for our Chief Executive Officer, Craig, who I'll introduce all of them in a minute. This meeting is also the first annual meeting to be held here at the company's premises, and we'll hope that after the conclusion of this, you'll be able to join management for a tour of the facilities to see carpet being made after the meeting. I'd like to introduce and acknowledge some people in the room. Firstly, our auditor from PwC, Pip Cameron, good to see you. Our legal advisers, the hall turned out today. We've got Ian, Joe and Brittany here from Russell McVeigh. We have also got our corporate financial advisers, Toby Grosser and team from Montan. So thank you. Good to have you all here. Before I go any further, there's just a few administrative matters that I need to cover off. If there's an emergency, head for the nearest exit, follow the people in the -- where are the people in the yellow jackets? They know where to go. They will guide you to the designated assembly point. There are no yellow jackets. Head out the door and go to the car park. If you do need the toilets, they're out to the doors and just on your right. Anyway, there will be -- it says in my notes here, one of the Bremworth staff outside will be able to assist you. I don't think that's clear. They will be able to direct you. We're pleased to be able to share our progress today and to outline the next stage of the Bremworth journey. So what we're going to do now over the next little while, there will be presentations from myself and from Craig as our CEO. And then there's going to be opportunities for shareholders to ask questions and have a general discussion about the business performance. We've got some 5 resolutions that we need to deal with today as notified in the notice of meeting. That was circulated to you all on the 13th of October, and I intend to take all of those as read. The audited financial statements and the annual report for the year ended 30 June 2025 were also released to the NZX and the shareholders on the 7th of October. I'm delighted to declare that we do have a quorum here. We need 5 of you to turn up. It looks like we've got a couple more than that, and the meeting has duly been convened. I'd also like to note, Riley, good to see you. We've got at least one representative from the media here today. So bear that in mind when you're asking your questions, but good to have you here. After those presentations that I referred to earlier, there's going to be another session. Undoubtedly and ongoingly, there's been significant interest from shareholders around our proposed scheme of arrangement with Floorscape Mohawk that was announced to the market on the 2nd of October. And I appreciate that some shareholders may not wish to raise their questions during the annual meeting itself. In fact, it will be great if you didn't because we are going to invite you all as shareholders to have those questions asked and answered after the conclusion of the annual meeting, and we offer the opportunity to discuss the proposal with the directors and our advisers. Because this session is solely for the benefit of shareholders and intended to allow you to raise your question freely with the directors, I'm respectfully asking, requesting that all non-shareholders and media, whether you're in person or online, bugger off at that stage. So we'll do the AGM. Happy to have you here, Riley, answer any questions that you've got. But then when we move into the scheme of arrangement discussions, we'll ask you to shoot off at that stage. If you have a question during the meeting, please raise your hand, and I'll ask for one of the roving microphones to come around to you. What would be great is if you could identify yourself before asking the question, that would be great. For media, we'll ask -- hold your questions until the end, and we can have a quick session after the conclusion. Voting today will be conducted by way of a poll. So 1 share, 1 vote. If you are eligible to vote, you will be able to cast your vote using the voting paper accompanying the notice of meeting that was handed to you on arrival. So you select your voting direction from the options that are shown on the voting paper when voting opens later in the meeting. For those of you that are online, select the Q&A tab, and I think you've got the instruct -- yes, here it is. Select the Q&A tab to submit your questions and the vote tab to cast your votes, if you're eligible to do so. Please feel free to submit questions throughout the meeting, and they will be addressed at the relevant time. So there's a screen for you to put your questions in. And then I will be calling for any questions periodically from Padget, who will tell me wave your hands around, Padget, if anything comes up. You can vote on all the resolutions at once or by each resolution in turn. You can change your vote up till I declare -- up until I declare voting is closed later in the meeting. I now declare voting open for all the resolutions, and I will give you notice when the voting is closed. The Board. Joining me today are your directors. I'll ask them each to raise their hand, although you can see the names in front of them here. So first of all, Julie Bohnenn, Trevor Burt and Murray Dyer. And down the far end, there is the guy that's been around here longer than all of us, Grant Biel, who's the Co-Founder and -- of the Bremworth business and a Director Emeritus. So welcome. Your Board brings wide experience -- and of course, me myself, I should have said that. I'm part of this crew, too. Your Board brings wide experience across agribusiness, manufacturing, retail and corporate governance. It has refreshed the mix of skills around the table, combining a continuity of manufacturing and design knowledge with new perspectives in governance, capital markets and strategy. Our approach is hands-on. It's had to be. Directors are spending significant time in the plants and with customers to ensure that we fully understand the challenges and the opportunities that are facing Bremworth. Also joining us is our CEO, Craig Woolford, and other members of Craig's executive leadership team, and as I've said before, several of our advisers and our auditors. On behalf of the Board, I thank all who have provided professional guidance to Bremworth throughout the year. So with that, I turn to the Chair's presentation. When this Board took office in March, shareholders asked us to act decisively to establish the business -- to stabilize the business and protect its value. We've done exactly that. We have reinstated the wool yarn production in Napier. We've reintroduced solution dyed nylon carpet to ensure a relevant product portfolio and that Bremworth remains relevant to the largest segment of the market. We continue to rightsize the cost base and focus resources where they will deliver the greatest return. We also continued with the strategic review process that had been initiated by the previous Board to assess the best way to create long-term value for shareholders. It's been a pretty busy 8 months. The outcome of that strategic review is the proposed scheme of arrangement with Floorscape Limited, a wholly owned subsidiary of Mohawk Industries. This transaction is a result of a structured process involving multiple parties and represents all of the options available, including continuing as a going concern -- and sorry, and represents of all the options available, including as a going concern, what your Board believes to be the best outcome for shareholders as we see it today. Under the scheme, shareholders are expected to receive total consideration of between $1.05 and $1.15 per share. That includes $0.75 per share from Floorscape and an additional $0.30 to $0.40 per share from excess cash to be returned to shareholders. Regulatory approvals are progressing well. The Australian -- the ACCC, Australian Competition and Consumer Commission, has already approved the transaction in their jurisdiction. Applications are with the New Zealand Commerce Commission currently and in land revenue. Subject to these and shareholder approval, the transaction is expected to be implemented in the second half of financial year 2026. So that's first half calendar year next year. This proposal provides certainty of value while preserving the Bremworth brand and workforce. It aligns us with a global parent that brings scale, investment capability and access to new markets. Whether the scheme proceeds or not, our strategy remains focused on building a stronger, more balanced business. We will continue to concentrate on the things that matter the most, disciplined manufacturing, profitable product mix, a high-performing sales culture and capital efficiency. These are fundamentals that will sustain the value creation for shareholders in any ownership structure. As I mentioned earlier, shareholders will have the opportunities to meet and chat with directors in private after the conclusion of the annual meeting to further discuss the proposed scheme. Market context. It's important to recognize the environment in which this turnaround has taken place. Consumer confidence and housing activity have remained subdued here in New Zealand, yet we've managed to lift volumes, rebuild service reliability and begin the process of regaining trust with key retail partners. It speaks to the strength of our brand and the determination of our people. There's also quite a long way to go. The reinstatement of the Napier yarn plant is well advanced with production quality now meeting our standards and supporting our SKU delivery. We have one card operational over there. The second card is going -- undergoing testing at the moment and will be operational next week. So we're making yarn. This reinstatement is the foundation to unlock the shortening of the supply chain, a reduction in our inventory hold, the improvement of yarn quality and consistency, improved cost efficiency and ultimately, sales growth. This has already seen the employment -- additional employment of in excess of 20 staff in Napier as we rebuild the blending operation, the carding lines that were damaged in Cyclone Gabrielle. We reinstate the 2-for-1 Twister and operationalize the Confin line to produce high-quality, consistent yarn in New Zealand. This has also had the benefit of bringing virtually all yarn production back in-house with commensurate savings on inventory holding and a significant reduction in the supply chain length and time to service with the added benefit -- significant benefit of being a remarkable quality improvement in the yarn produced. Quality has returned to historical levels with downgrade rates now below long-term averages. It's a major improvement compared to the 12% plus that we saw earlier in the year, which just simply were not acceptable. Reentry into the SDN carpet market is virtually complete. We've now got stock on hand, and you might see some this afternoon, and we expect to see sales begin this month. The demand pipeline is well supported by ongoing yarn supply from our partners. The addition of SDN to Bremworth's product portfolio provides us with greater relevance to our retail partners and ultimately, our consumers as we have a wider range of consumer-relevant products to offer in our range. Alignment of the cost base is also nearly complete. We are seeing efficiencies in the distribution and administration parts of our business, and we are beginning to benefit from overheads across the business. Sales capability is being rebuilt. Great to see you here, Warren, today. He's the dude that leaves New Zealand. You don't mind me calling that Warren [indiscernible]. Sales capability has been rebuilt. Almost all of the frontline positions are filled, and we are seeing encouraging momentum, particularly in New Zealand. So looking ahead, as our volumes increase, we are shifting our focus progressively from recovery to efficiency. Manufacturing performance is improving as we concentrate on throughput and process optimization. Napier continues to increase its output and support the Fongganui plant, reducing our lead times and improving quality. We are lifting the volumes from our yarn plant and managing inventory to focus on faster-moving SKUs while phasing out slower-moving ones to maintain an optimal stock balance. Our cash position remains strong with the cash at the end of the financial year of $42.2 million in the bank as reported in the annual report. Our sustainability principles remain unchanged. Bremworth continues to champion the environmental and health benefits of natural fibers, and we will maintain that leadership position whatever the outcome of the scheme. We are comfortable as a Board that SDN and wool can coexist under the Bremworth brand. Our customers are asking for this. All of this means that we have built a platform capable of sustained performance and ultimately sustained profitability, whether the scheme proceeds or not. It is fair to say that the future is murky at the moment, so it is a long road to go, and we'll talk more about that later on. Employee recognition. I also want to recognize the contribution of our staff throughout New Zealand and Australia across both the carpet and our wool divisions. They've shown professionalism throughout significant change, and their commitment to quality and safety underpins everything that we're achieving. So on behalf of the Board, I thank them. So in closing, we are in the process of rebuilding focus, capability and financial discipline, and we're a long way down the track, but there's still more to do. The last few months have proven that Bremworth can adapt, compete and ultimately win. The foundations are set. There's a long way to go, and we're ready for the next phase of growth and value creation for shareholders. Thank you for your continued trust. I will now invite Craig to provide further detail on the company's operations and the outlook for the rest of '26 and '27. So Craig, over to you.

All right. Thank you, Rob. Good afternoon, everyone. It's a privilege to stand here today and once again be part of Bremworth journey. The company has played a major role in my professional life and is one that I care deeply about. I've seen firsthand what Bremworth can achieve when its people are focused, its manufacturing runs well and its customers believe in the brand. This isn't my first experience at Bremworth. I started here back in 1997 as the Manufacturing Administration Manager. I worked through several leadership roles, including production manager, plant manager and then moved on to General Manager of Manufacturing. I did a brief stint in Australia as acting CEO for one of our parent company or one of our other companies on Terra Tiles. And then I -- after a period leading Godfrey Hurst North America, I returned here earlier this year at the Board's request to help get the company back on track. When I came back, it was clear the business had strong fundamentals but needed sharper focus. The past 6 months have been about restoring discipline, resizing the business, improving quality and embedding a performance culture that drives profitability and growth. A major focus this year has been resetting how people see Bremworth. For too long, the business saw itself as just a manufacturing company. That mindset needed to change. We are a sales organization that happens to make carpet, not the other way around. Everything we do is to support sales. And the team right across the organization have embraced this shift, and the results are starting to show. As Rob mentioned, we have launched new synthetic ranges alongside our wool offer, giving us a fuller product mix that the retailers want. This has changed the conversation with customers and reestablished our relevance in the market in both New Zealand and Australia. Before turning to operations, I want to briefly recap on our FY '25 results. The past year was the most challenging in Bremworth's modern history. Consumer confidence remained weak across New Zealand and Australia. And competition in the flooring market intensified. These factors weighed heavily on both volumes and margins, particularly through the first half of the year. Despite these challenges, revenue increased from -- to $88.4 million, up from $80.3 million in FY '24, reflecting the reinstatement of production capacity at -- and the gradual rebuilding of customer relationships as well as a solid performance by our all procurement division, Elco Direct. However, margins were compressed as higher input costs and subdued demand reduced overall profitability. Our normalized EBITDA loss came in at $13.5 million compared with a $4.7 million loss over the previous year. Despite this, the company recorded a net profit after tax of $19.1 million compared with $4.6 million in FY '24 after adjusting for insurance proceeds, restructuring costs and provision for onerous contract. Most of the operating loss occurred in the first half when we were carrying excess inventory, facing higher yarn costs and managing the disruption of reinstating Napier. The second half showed a clear improvement as cost control measures took hold, manufacturing began to stabilize and working capital was brought back under tight management. While the full year does not yet reflect the company's potential, the trajectory is positive. We exited FY '25 with a leaner cost base, better quality metrics and improved cash generation. The reset has created a stronger platform for the recovery we expect to see through FY '26 and beyond. So our manufacturing network is performing more efficiently than at any point in the recent years. Productivity gains are coming through the volumes lift with Napier and Fongganui now operating in close coordination. The 2 sites are now sharing load more effectively, reducing lead times and improving quality consistency across the range. We have rebalanced the production mix to focus on high-margin SKUs and tighten control over energy and waste. Continuous improvement initiatives are underway across both yarn and tufting operations with clear accountability for output, cost and quality. The progress has been tangible. When I returned to the business, the cost of quality was unsustainable with downgrades running at 12% of production. Today, those downgrades are under 2%. And at the time, October was tracking at 1.6%, and that improvement has had a direct and significant financial impact. We have also cleared legacy inventory that was dragging on cash and profitability. When I arrived, there was more than 27,000 linear meters of seconds and obsolete carpet stock sitting in storage, incurring significant cost. Virtually all of that is now gone, freeing up space and reducing waste. None of this would have happened -- would have been possible without the right people. We have rebuilt a capable and experienced team. Victor Tan, where are you, Victor? Victor is over there with his hand up. He's been reinstated as our Chief Financial Officer and Company Secretary, strengthening our financial discipline and governance and fully utilizing Victor's 40-plus years with the business. Victor knows all parts of the business intimately and is a great sounding board for any new initiatives that we have, and he has always put the shareholders first. Warren Drinkwater, who put his hand up just over there. He's our General Manager of Sales for New Zealand. Again, Warren brings more than 20 years of industry experience and has been instrumental in rebuilding our retailer confidence in New Zealand. Michael Ingham, who is unable to attend today, is our General Manager of Sales in Australia. He's been with Bremworth for over 14 years and again, is instrumental in reestablishing our relationships with our key Australian buying partners. Chris Nabney, who again, he's away on leave. He's our Head of our Yarn Operations. So he's across both Napier and Fongganui. He's been very key in driving our turnaround in quality and plant performance. Dave McLeod, again, who can't be here today, he's down in Napier at the moment, who has supported the people restructure, has been central to rebuilding staff levels at both spinning plants and managing change with professionalism and care. And Claro Deal, Carlo, where are you? Put your hand up. Claro is our Chief Information Officer, and he has been instrumental in upgrading and streamlining our systems to match market requirements and manufacturing objectives. It's a significantly big task, let me tell you. So our workforce understands the link between quality, efficiency and customer satisfaction. There is a renewed sense of pride in delivering and accountability for results. Our focus is now firmly on our customers. Bremworth has a proud heritage in wool carpet and that remains central to our brand. But to succeed, we must be cognizant of where the market is. Synthetic carpets account for more than 85% of soft floor coverings sold in Australasia. By reinstating solution dyed nylon alongside wool, we're giving retailers a fuller range of what they need and putting ourselves back in the conversation. The reentry into synthetics is being well received. It allows us to participate in more tenders and dealer promotional activities while also positioning our wool carpets as the premium alternative with a comprehensive range. In Australia, our relationships with major buying groups are strengthening. We're getting back through the door and rebuilding trust, which is critical for long-term volume. Domestically, we are winning back floor space in key independent stores through improved service, reliable delivery and clearer brand communication. Looking ahead to the rest of FY '26 and into FY '27, I expect to see the full benefits of this reset reflected in our results. Some initiatives have taken longer than expected. Synthetic carpet production started 2 months later than we planned. Napier's second [indiscernible] is coming online. As Rob said, it will actually be running on Monday. But again, it's later than scheduled. These are short-term issues. And by the second half of FY '26, all our major changes will be in place. Our cost structure will be rightsized, and we expect to be back in profitability. Inventory is now balanced between fast and slow-moving products. And our cash generation is improving. Working capital has tightened, and manufacturing recovery is trending upwards. This gives the flexibility to respond quickly to demand and reinvest in areas that will drive growth. We are continuing to invest in product innovation that supports our long-term competitiveness. Our product strategy now balances New Zealand's natural wool advantage with selected synthetic offerings. Work is underway on new sustainable blends that enhance durability while maintaining the aesthetic and environmental values our brand is known for. Our design and technical teams are working more closely with customers to ensure our products align with the market. The time from concept to launch is shortening, allow us to refresh our ranges more frequently and remain competitive. So in short, we have moved from recovery to rebuild, as Rob mentioned before. Bremworth today is more efficient and more focused and better aligned with the market. We have the right leadership team, the right culture and the right strategy to deliver sustainable profitability, whether under our current structure as part of the proposed scheme, the direction is clear. We are building a business that can compete, grow and create value for shareholders over the long term. So thank you for your continued support and confidence in Bremworth. I'll hand the meeting back to Rob.

Thanks, Craig. I'd now like to invite questions in relation to the FY '25 annual report or today's presentations from what you've seen. There will be an opportunity to ask questions about the resolutions once they've been put to shareholders later on. As I mentioned earlier, so we'll keep the scheme of implementation questions until the next session, if that's okay. As I mentioned earlier, if you do have a question, please raise your hand so we can direct the microphone to you. And if you -- I've just taken the fruit fly population from Auckland down by one. As I mentioned earlier, please raise your hand if you have a question, we'll get the roving mics to you. And if you could identify yourself before putting a question, that would be great. And for shareholders online, if you can put your questions in, I see we've got a couple there. So while do we have a question from the floor, we'll get the microphone to you, but Padget, we might take one online.

Okay. We have Carly Vanamp. As I'm unable to attend personally today, please confirm whether the offer of $1.05 per share is to sell Bremworth to Godfrey Hurst and ultimately foreign ownership. So that's from Carly Vanamp. Please confirm whether the offer of $1.05 per share is to sell Bremworth to Godfrey Hurst and ultimately, foreign ownership?

There is a range of value. I'm quite happy to deal with -- well, it's stated publicly at the moment, so we can deal with it now. There is a range of $1.05 to $1.15. The price of the share that Godfrey Hurst will be paying is $0.75 under the proposed scheme of arrangement. There is a number of hurdles that have to be got through to get to that point, including a shareholder vote that you will all be invited to attend. The first cab off the rank is obviously Commerce Commission approval in New Zealand. We've already got the ACCC in Australia, and there will be a number of other things that we'll talk about, and I'll flesh out later on. At that point, you will have your choice to determine whether this happens or not. Under a scheme of implementation, we have a requirement to have 50% of the shares on offer voted. And in the process of that, voting 75% of shares voted need to be in favor of the resolution. So there's a lot of water to go under the bridge, but assuming shareholders say, yes, the range of $1.05 to $1.15 is what we expect the combination of the purchase price and the cash distribution to be.

Great. There's one more online from Paul Grant. Is Bremworth on track for a positive net profit for the year ending June '26?

I can deal with that. Craig may want to do a little bit more later on. And it might be easier just to do it from the floor -- from the desk, to be honest, rather than this shuffling around. The year -- I mean, it's a challenging year. We are coming out of the recovery. There are green shoots, but make no mistake, there is a long way to go. We haven't provided the market with a reforecast yet. We will be looking closer to that at the 6-month mark, which will be early next year, we'll be bringing that out. At this stage, delays in solution dyed nylon as one of those legs has had an impact on us. But we expect looking forward that FY '26 will be significantly better than FY '25. But it's simply too early to tell. There's a hell a lot of water to go into the bridge.

One more question from Paul. With such an excellent refocus, why not remain a Kiwi company? $0.75 per share paid by Mohawk seems too little.

Thanks, Padget. We might hold that question until later on when we talk about the scheme of arrangement. Are there any questions from the floor? Over here.

I was just wondering, do we know when the -- is there a date for the Commerce Commission decision? I have in my head, I've got December 17 or something.

Yes, 22nd, I think, is the one that's on the timetable. We'll have a timetable up when we do the scheme of arrangement discussion later on. So we'll be able to flesh it out then. But broadly, your understanding is right. And that's this year, Christmas this year.

Catherine Harvey, shareholder. What makes this introduction of synthetics better than when it happened 8 or 9 years ago, and it didn't seem to work.

Craig, would you like to talk about that?

Look, I'm not sure that they didn't work last time. I don't know if it's quite right. What makes it different this time, not a hell of a lot. It's just that we're getting back in it. We've spent a lot of time getting the colors right. We've been told we're a market leader in the color work. And we need the synthetics in the marketplace to be relevant to our dealers and also recover factory overhead in the plant.

Yes. I might just expand on that a little bit. As Craig mentioned in his report, when you've got 15% of your flooring soft covering universe being wool and 85% being synthetic in some description, the market is telling you where they're behaving. They may say what they like, but what they do is different sometimes. And by not having a synthetic range in our offer, it made it very hard, a, to get scale; and b, to be of relevance to the retailers. So we were effectively fighting with one arm tied behind our back. The reintroduction of synthetic gives us a bigger toolkit and portfolio to offer our retailers. It gets us more relevance. It gets us more space, and it gets us more consumers. So that's why we've done it. That, in turn, allows us to defray our fixed costs and our overheads within this business across a wider number of linear meters that we can produce, which means that we hopefully start to make a little bit more money.

How confident are you of getting this past the Commerce Commission? Secondly, how do you believe your model is going to be any better than the last 20 years?

I guess shareholders will ultimately be the arbiter on that one. The Commerce Commission -- and I'm quite happy to expand on this later on. The Commerce Commission process is a black box. We don't get to influence that. We get to -- they ask us what's going on. They'll ask a number of participants in the sector, their point of view. And from that, they will make a decision. So we cannot lean on those scales. It is a completely independent process, and we are bound to abide by whatever that outcome is. So are we confident? Yes, we wouldn't have gone into this if we didn't think there was a realistic chance of getting it through, but the Commerce Commission obviously make their own call, and that will come out this year. As to the other question about us in the 20 years. Look, all I can say is we've come in here all of the directors on the Board have got turnaround experience in some form or another, and we're bringing that to bear here. I'll be the first to admit that if somebody puts a color swatch in front of me, I'll probably give it to my wife, but we're not here for that at the moment. We're here to turn this business around. So we don't have a perfect skill set, but we have the skill set that's needed today, and we'll be reviewing that regularly as we go forward. If we do go forward under the scheme of arrangement, it will be a completely different operation. Any others online? All good. Thanks, Padget.

Okay. Well, look, if there are no other questions from the floor, one last go around. Okay. What we might deal with now then is the resolutions, if that's the case. So we have 5 resolutions. They were notified in the notice of meeting and the explanatory notes have been provided. Voting on each of the resolutions will be held by the way of poll, and that's underway, as I spoke, as I said earlier. Only shareholders who have yet to vote, proxy holders or representatives of corporate shareholders may vote on today's resolutions at the meeting. We will take questions on each of the resolution -- each of the resolutions as they are put to the shareholders. So the first 4 resolutions are with regard to the election of your directors. We have all 4 of the directors that are on the Board, myself, Julie, Trevor and Murray, are up for election today. We were put in at the shareholders' request in March this year, and it's time to formalize that. So the first resolution relates to the election of Julie Bohnenn as a director of the company. I'm just going to read Julie's bio quickly from the annual report. Julie is an experienced director and business adviser with expertise across agriculture, retail, health, leisure and corporate travel and wealth management sectors. Joined the Board -- we all joined the Board in March '25. She Chairs our Audit Committee. She is a fellow chartered accountant with a proven track record as both the Chair and Audit and Risk Chair. Julie has extensive experience in business restructuring, market disruption, M&A, stakeholder engagement, regulatory compliance and project governance. Her current Board roles are with Farmers Cooperative Society, where she Chairs the Audit and Risk Committee, Forte Health Group, Reform Radiology and Moana Heights. Previously, she has held Board positions with Jay Ballantine and was the Chair there and the House of Travel Group, where she was an Executive Director. Julie, would you like to say anything?

I think I should. Thanks, Rob. Good afternoon. It's been a real privilege to serve as a Director of Bremworth over the last 8 months. It's been full on, but it's been definitely worth the effort. Working alongside my fellow directors and the new management team to stem the cash burn and to protect the integrity of this iconic company has been my focus from the outset, particularly in my role as Chair of Audit and Risk. There's still more work to do in improving the financial systems and our risk processes. And if reelected, I'll continue to support our dedicated and experienced management and definitely experienced financial team to make changes in these areas. And I'll do that in a practical and efficient way, but I'll still maintain the highest level of governance. So I look forward to serving you as shareholders if I am reelected.

So I have the pleasure of moving the Julie Bohnenn who retires and who is eligible for election, be elected as a director of the company. I advise that the directors unanimously support Julie's reelection. Are there any questions in relation to Julie's election today? If there are none, then if you haven't voted, vote now. Are there any questions online, Pedro?

No.

Okay. That's great. Thanks. I'll let you get on with the vote, and we'll move to resolution 2, which is the election of Trevor Burt as a director of the company. I'm going to, again, read from the annual report, his bio. Appointed on March '25, Trevor has significant experience leading large and complex corporate organizations and a proven record of implementing change in achieving results. He is the Chair of the People and Performance Committee here at Bremworth and a member of the Audit Committee. Trevor has held significant leadership roles in global gas sector, industrial gas, sorry, in Australia, China, the U.S.A. and Germany. He currently sits on the boards of the New Zealand land company where he chairs it, Mark MG Garden, MG Limited or Market Gardens Limited, Land Power New Zealand, New Zealand Drinks and Hossack Station. Previously, Trevor has been a Board member of MHM Automation, where he chaired it; Nitahu Holdings Corporation, also Chair; Littleton Port, also Chair; PGG Ritson, Deputy Chair; and Silverton Farms and Manpower New Zealand as a Director. Trevor, would you like to say anything?

[Foreign Language] Thank you, Rob. I'm delighted to have served this last 7.5, 8 months with my colleagues. What are we going to be any different to the others before us? I think I've experienced a great team with Murray, Julie and Rob, and I think we work together really well as a Board to complement each other. What do I bring? I'm the old scar. I have scars on my back from a wide range in roles in governance across 20 years and across all sorts of ownerships, including, as you heard, publicly listed -- private -- private companies, even a bit of government and more recently, E. I'll bring you 3 things. One is those scars and experience. The second is a passion. I'm passionate to work with these guys. It is part of why I joined here was the opportunity to work with 3 individuals like this. And the third is I'll bring you a commitment to good governance and a commitment that will always act in the best interest of the company but with a view that creates shareholder value. I believe you've had a tough time as a shareholder in Bremworth, and I want to see us as a Board change that. So that's what we're here to do is deliver value to you as shareholders. And I'd like to thank you for the opportunity.

Okay. I have the pleasure, again, of moving the Trevor Burt who is retiring and is eligible for reelection, be elected as a director of the company. I advise that the directors unanimously support Trevor's reelection. Are there any questions from the floor? Any online? Thanks, Patrick. Okay. Could you please now vote in favor of -- could you please now vote on that resolution. [Voting]

All right. That brings us to resolution #3, which is the election of Murray Dyer as a director of the company. Again, I'll read the bio. 2025 March. Murray is a member of the People and Performance Committee. He's 30 years' experience in agribusiness, energy and international trade experience. Murray's career started in the wool industry with Reed Farmers. That's in a Targo Stockland station company that is no longer here. I'm not sure who's age you're showing there, Murray; has included executive and director roles in textile trading and Co-Founding and energy and commodity services business in London. You got that sorted? Murray founded and was the Managing Director of Simply Energy. Murray is a shareholder and Director of Utility Data Services and an investor in Agritech. He's a chartered member of the Institute of Directors, a graduate of the Catalog Rural Leadership program and has completed an MIT Sloan Management executive program on AI. Murray, have you got anything you'd like to say?

Thanks, Rob. It's been a pleasure to such an amazing brand as Bremworth has been involved in it for the last 6 or 8 months. It's been very challenging. But it's been very rewarding with the changes we've made, and we've had to move fast. What I bring to the organization, I've got an entrepreneurial background. So I've got a real sort of owner-operator mentality about where each dollar spent, how it's spent, what the return is on that dollar. And then a real focus on commercial execution. It's one thing to align strategy, but you've got to execute commercially on that strategy. And that's what my real focus will be on a go-forward basis on reelected. So it's got a very proud history and brand Bremworth, and we need to really convert that into sales and commercial execution, and that's going to be my focus if I get the opportunity to be reelected. Thank you.

Thank you. I have pleasure again in moving that Murray Dyer, who retires and is eligible for reelection, be reelected as a director of the company. And again, the directors unanimously support Murray's reelection. Are there any questions from the floor with regard to Murray's election? Nothing online? Okay. Thank you. Can I ask you please to vote on that one now, please. [Voting]

Resolution #4. I'm not sure whether we're saving desert for last, but not. But anyway, it's my turn, Rather than get out Trevor to read this, I'll read this, and I'm going to read it because I forget things. Again, March 2025, significant governance experience across agriculture, horticulture, export, supply chain logistics, renewable energy and retail. I currently Chair Farmlands Cooperative Limited, Wolfscale Holdings Limited or Woolworths, Hilton Haulage, FornEnergy, Pioneer Energy, Agrizero New Zealand and Rewiring. I am immediately -- the immediate past chair of Silverton Farms Limited and Silverton Farms Cooperative, a former counselor of Lincoln University and a past Chair of Wool Impact. I was awarded the Deloitte Top 200 Chair of the Year in 2023 and in 2019 received a Cooperative Business in New Zealand Outstanding Contribution Award. I happen to also be a farmer from South of Targa, farming 10,000 stock units on a carbon positive out just over 1,000 hectare or Medium Hill Country farm down there. And so the wool supply chain is important to me personally. I'm a charted fellow of the Institute of Directors and an alumni Lincoln University, a masters in Commerce and a become and economics. I am very happy to put myself forward for your consideration as being reelected to this Board. As I said, I am a farmer. The wool supply chain is absolutely fundamental to me at many levels. My father shore his way on to the farm back in 1964. So this is intergenerational for me. But where the real attraction about Bremworth is that this is where the value is created. When you look at the whole supply chain, it is here where the money happens. And this business needs to be strong. We've got a great brand. It needs to turn around. And I've got experience in that space. I've done it with Silverton Farms and I've done it, we've done it July with farmland, and I'm looking forward to be able to continue to do that here. So I respectfully request your support. Trevor, do you want to take it from there?

I don't know, you're pretty well took it, Rob. I reckon he was scared that we swapped seats in case he didn't get it back. So I'll do this from here. I've got great pleasure in moving that Rob is reelected. He retires by rotation, and he's obviously eligible to be a director of the company. I advise that we, as a Board, unanimously support Rob's appointment. And I'd like to add that as Chair, Rob has led the Board fantastically. He leads by example. He's upfront. He's smart, but he's got a very good way about them. And as he outlined, he's got very great passion for this sector and an experience in it. He continues to be driving force for growth and his leading of the transformation at Bremworth has been exemplary for us. And I think the Board and the management are extremely grateful, Rob, that we've got you. I'm happy to take any questions about Rob's election. Paget, any online?

No.

No. Okay. We'll pause and let you vote. Sorry, we do have one question. Good. Safe for Rob that here.

My name is [indiscernible]. Yes, I'm a shareholder of Brad recently after reading some financial news. And I don't have a question, but I'd like to thank Rob very much because I was a shareholder of Belts Carpet which when they predated years ago and I lost money. And now we are lucky to have Rob as a very capable Chairman so that I can get my money back. Thank you so much.

Well, thank you for your comments on behalf of Rob.

Also another one is I am posing supporter of the wool carpets, the [indiscernible] use carpet. And I use wool as insulation. So during those 25 years, I never need to use heater at home at all. I only need to wear more clothes when I go out of the house. When I go inside, I have to also long, I have to take off layer by layer, my stuff, et cetera. And also, I think fresh building have made a mistake because they use paper for insulation as the rule is the cheapest one, I got the sample 25 years ago, but I didn't use that. Paper is so easily ignitable so they make a mistake of using paper as insulation just to save money, but they burn so quickly, and it's a disaster. If they use wool because wool won't be ignited so easily. It won't be -- it will be another story. Yes. Thank you very, very much. Yes.

So Rob, I'll ask everybody to complete quoting on your appointment, if we can. And then I suppose I have to hand this back to you, but you reluctantly take it. Thank you.

Thanks. You might ever talk [indiscernible] going. The fifth resolution that we are able to deal with today is to fix the auditor's remuneration. We are asking your authorization to do exactly that. So I move that [indiscernible] be authorized to fix the remuneration of the auditor. Are there any matters for discussion or questions from the shareholder on this resolution from the floor first? Paget? Okay. Thank you. No further questions, then can I please ask you to vote on that resolution. [Voting]

So that concludes the voting on the 5 resolutions that we have in front of us today. I will declare the voting closed shortly. For those of you who are yet to cast your vote on both -- on all resolutions, I'll now pause to allow you time to finalize those, and the boxes are coming around now if you have paper to put on, please. There's one down the front here. Sorry, there was -- just on time. Got it. Sort of -- Excellent. Okay. Thank you. It looks like we've gathered all the votes. If you haven't done it online 3, 2, 1, now it's closed. Thank you. The voting on today's resolution is closed. The results will be released to NZX later today and will be available on the company's Investor Centre website later on today. Computershare, who will act as scrutineers, will now -- we've done that, collect the voting forms. So that's all happened. All right. proxies and postal votes. For information, the company had received approximately 20 million proxy and postal votes representing approximately 28% of the total amount of shares. And of that, more than 90% of those have been voted in favor of the 5 resolutions. So now we'll move on to other business. And if there are no further questions, we'll close the meeting. But here's the last chance for any questions with regard to the AGM for Bremworth for 2025 financial year. Any questions from the floor? Paget, anything online?

We have one question online about the wool-only strategy. It's from Paul Grant again. Was the wool-only concept adopted by previous Board and management unrealistic? Or was it poor execution?

You can answer. I was looking at you. Look, a combination of both, to be quite honest, Paul. I mean, I'll just state again what I said earlier, 15% of the soft floor coverings in that universe, we are making it hard for ourselves. It's certainly aspirational. And there is no question that there is a segment of consumers out there much like you who love wool and will do anything you can do to have wool in your life and go on, do as much of it as you can. I do the same. But unfortunately, the reality is there is a large chunk of consumers who may -- some of them may say that, but do something else, and some may not say it and don't do it either. And we're missing out on that opportunity. So the wool strategy was aspirational. And to make it work, it needed a fair wind, a very fair wind. We did not get a fair wind, particularly with Cyclone Gabrielle. And that means that we had to go and source wool or yarn from offshore. The yarn manufacturers do not make yarn to the same standards that we do. I have been amazed coming into this business at how technically complex making wool yarn is, it is not something to be trifled with. And Grant has got many, many decades of experience around this. He can tell you for probably longer than you're comfortable, how hard it is to do. The point is when you've got long supply lines with varying quality that you don't find out about until it's here in New Zealand being tufted into a carpet out there, we have manufacturing problems. We have cost problems, we have inventory hold problems. Those headwinds stood against us for the last 3 to 4 years. So the strategy is aspirational. We still want to do it as part of a portfolio of products. Wool is a key part of what we do and will continue to be a key part of what we do, but it's not going to be all that we do. We can't afford to occupy that area only. Any further questions? You have a microphone?

Yes. Thanks, Rob. A shareholder. What is the -- is the market really bounce back? And like the synthetic is much better, well received than anticipated. And you end up with more cash than you expected. So will more pay more? Or you will distribute more cash to the shareholder? Will shareholders be able to have this -- the possibility of the cash better than the 1.215? So if something better happen?

The short answer is yes, that would be the case, but there's a fair bit of water to go under that bridge. And this year, so far, would not evidence that that's happening. We haven't helped ourselves, to be quite honest, by having a delay in our synthetic product launch by a couple of months. So that's put us under pressure with the rest of the business to perform. But yes, if we had an absolute blinder in the back half of the year and there was more cash to distribute, we would be distributing more cash. It's not what we see in front of us at the moment, but I'd be delighted if that was the case.

Thank you, Rob.

Question over here.

Steve Stickland, I'm also a shareholder. I'm interested, when you're talking about solution die [indiscernible], does that run on the existing machinery that wool cover is made on?

Craig, do you want to deal with that?

Yes, it does. Just basically just come straight in and go straight on to the top. So there's no real difference at all in regards to what we do. We still run it through our beaming machines and then put it out in tufters. A little bit harder on gauge parts and bits and pieces, but it runs exactly the same. There's no need for capital investment or anything like that.

Jason, will we see on the plant tour this afternoon is the SDN manufactured this afternoon? You'll see both going.

And so where does that yarn come from?

Look, at the moment, we're bringing it in from China. We've got -- there's quite a few options where we can get it from. That's sourced all around the world. And at the moment, we're buying some from China, but I've just been in India negotiating with suppliers up there. It's horses for courses really as we can match our best match our shades and do the best pricing, offer best terms, et cetera, et cetera. So it really is horses for courses. Our first round, it's coming from China. Our second round may come from Indonesia, it may come from India, may come from China. I don't really know yet. So...

Can I make a comment? Thank you. This looks really encouraging.

Thank you. I mean it's a means to support the business. We've just got to do it. Now personally, I have my views about it, but I could be [indiscernible]. But yes, look, we've got to -- if the market is telling us to do something, we should listen to it. Are there any further questions from the floor? Anything online, Paget?

Let's do it [indiscernible].

Save it for later. Yes. Thank you. Okay. Well, look, with that, thank you very much for your attendance in the 2025 AGM. I'm going to draw that to a close. I'd like to thank you for your continued support. And I want to reiterate that we are excited about what Bremworth is doing. And I think we've just exposed a little nugget of that here. We look forward to adding value to our shareholders and our staff and our consumers. So I'm going to call the AGM to a close. Now as I advised at the outset, all non-shareholders, whether in person or online, we ask that you now leave the meeting to allow directors' time with the shareholders only to address any other questions that you may have on the proposed scheme of arrangement. Thank you. Yes. And I'd just like to flag also that we need to have a hard finish at 2:40 p.m. this afternoon. So I think the parking meters run at about that time, too. So thank you all for your interest in Bremworth and taking time to join us this afternoon. Let's take a break for 90 seconds to allow those that need to leave to leave, and then we'll reconvene to have a discussion about the SAO.