Overall, Lush New Zealand reported a combined net profit of $6.7m in 2025, up 191.2% from $2.3m in 2024.<\/p>\n
Material uncertainty<\/p>\n
Lush New Zealand\u2019s auditors, BDO New Zealand, identified that the business was operating as a going concern, with support indicated by its parent for financial support for at least the next 12 months.<\/p>\n
BDO noted that Lush New Zealand\u2019s current liabilities ($23.8m) exceeded current assets ($21.9m) by $1.8m in the reporting period.<\/p>\n
Additionally, the business received substantial other income (as listed above) and purchased the majority of its inventory from related group entities.<\/p>\n
\u201cAs a result, the group [Lush New Zealand] requires both financial support and also the continuation of the parent entities in order to earn other income and be supplied with product to sell,\u201d the auditors said.<\/p>\n
Lush New Zealand\u2019s UK parent had given a letter stating it would provide financial and other support to the business and that it would not require the business to pay its liabilities to related group entities if it was unable to do so.<\/p>\n
However, the auditors raised concerns about the New Zealand arm\u2019s immediate and ultimate parent company, Lush Cosmetics.<\/p>\n
\u201c[Lush Cosmetics] requires funding which has not been fully secured and as a result, there is significant doubt as to whether the immediate parent entity and the ultimate parent entity will be able to continue as going concerns.\u201d<\/p>\n
The auditors also flagged \u201csignificant uncertainty\u201d as to whether the commitments made by the parent and relied upon as the basis of preparation for Lush New Zealand\u2019s financial statements will be met.<\/p>\n
BDO highlighted similar concerns regarding the certainty of other income from related group entities, along with whether they will continue to supply inventory.<\/p>\n
\u201cAs a result, there is material uncertainty that may cast significant doubt about the group\u2019s [Lush New Zealand] ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.\u201d<\/p>\n
This is the third consecutive financial result for the operation, which has been flagged for material uncertainty.<\/p>\n
Chartered Accountants Australia New Zealand (CAANZ) last week released data showing an increase in the number of companies where auditors have highlighted a material uncertainty related to a going concern.<\/p>\n
The report revealed material uncertainty flags on 15% of New Zealand\u2019s listed companies, up from 13% in 2021.<\/p>\n
Meanwhile, New Zealand\u2019s financial regulator said today that some companies were delaying reporting financial statements to avoid flagging \u201cgoing concern\u201d issues.<\/p>\n
While many entities were meeting expectations, there were some weaknesses and delays in reporting, the Financial Markets Authority (FMA) said.<\/p>\n
Founder visit<\/p>\n
Lush marked its 30th anniversary last year after its founding in 1995, with co-founder Rowena Bird<\/a> making a rare trip to New Zealand as part of an anniversary tour.<\/p>\n Bird said over the last year, \u201cjust for Australia and Aotearoa\u201d, Lush would have made 1.5 million bath bombs and probably about 15-20 million worldwide.<\/p>\n She said that the business had survived a challenging period through the Covid pandemic because of the virality of its products on social media, noting its sales \u201cwouldn\u2019t be looking quite as great as they are\u201d without it.<\/p>\n Bird also acknowledged the growing cost and scarcity of certain ingredients used in its products, including cocoa butter.<\/p>\n