A letter sent to chairman George Adams on Saturday called for a special meeting, citing "years of poor operational performance, erratic strategic direction and substandard execution under the stewardship of Bremworth’s current board".
In a note to the NZX yesterday, Bremworth said its co-founder and single-largest shareholder, Grant Biel, as well as "other substantial shareholders" spoken to by the board, had indicated their confidence in the current board.
The dissatisfied Auckland-based shareholders, who represent 11.55% of Bremworth’s issued capital, said the recent half-year result showed continuing cash deterioration of $24 million since June 30, 2024, stagnant sales and an increased loss after tax of $8.1m.
Revenue had nearly halved, declining from $148.1m in FY18 to $80.3m in FY24. Over the same period, carpet revenue — which did not include wool trading — reduced from $123.7m to $57.1m.
The company’s exit from synthetics has not been offset by growth in wool carpet sales and operating costs remain high.
The shareholders described the company as being "at a crossroads" with the final insurance payout from damage and disruption caused by Cyclone Gabrielle of $42m just received, and a newly announced strategic review.
His proposed board includes Trevor Burt, whose governance roles have included Ngāi Tahu Holdings, Lyttelton Port, PGG Wrightson and Silver Fern Farms; Julie Bohnenn, an independent director of Farmlands; and Murray Dyer, whose career started in the wool industry and has included executive and director roles with a textile-trading company in Melbourne.
In a statement, Mr Hewett said that the shareholders had not taken the step lightly.
"We have consulted with shareholders holding approximately 35% of the share register so far. Each shareholder with whom we have consulted has supported our call for a meeting. This has given us the confidence and determination to proceed.
"The numbers speak for themselves. The current board has failed to grow the company or deliver value for shareholders.
"While the current board has called for another strategic review, 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.
Bremworth’s statement said the board was progressing with a strategic review of the company’s ownership structure.
Mr Adams said the interest from offshore and domestic parties reflected the value and high regard of the company.
"We have a clear strategic plan in place ... and are well positioned to deliver, with green shoots starting to emerge. The company has a highly trusted brand, strong customer relationships, a great team, some of the best wool carpets and rugs in the world and is well positioned to drive demand...
"We have identified approximately $5m of annualised cost savings over the next year and have a strong plan to deliver double-digit flooring revenue growth in Australia, alongside continued growth in New Zealand."
