NPAT up 57.8% but cash conversion fell to 46.3% on capex surge

Operating cash flow fell to NZ$186.6m from NZ$209.1m, dropping the OCF/EBITDA ratio to 46.3% from 67.4%. Annolyse's historical baseline puts cash conversion at a 60.2% mean over the prior four halves, with a 49.1%–74.2% range, so the current reading sits below that band.

Pre-lease free cash flow widened to a NZ$315.7m deficit from NZ$242.4m, NZ$153.9m worse than the historical mean of -NZ$161.8m and the weakest in the supplied four-period window. Capex of NZ$502.3m equalled 100.5% of revenue. Working capital absorbed NZ$30.7m as trade debtors rose 59.5% to NZ$82.3m and receivable days stretched to 30.0 from 21.4.

Against that, revenue grew 13.5% to NZ$499.9m, PBT rose 52.9% to NZ$260.0m and NPAT rose 57.8% to NZ$187.3m. Net debt/EBITDA improved to 4.96x from 7.01x and the cash balance jumped to NZ$464.4m from NZ$57.9m, evidently financing-supported.

At 46.3%, OCF/EBITDA sits below the supplied historical range and 21 percentage points below the prior comparable. Receivables growth running roughly 4x revenue growth is the proximate cause and means a meaningful portion of the reported EBITDA expansion has not yet been collected.

The investment cycle is at its deepest point in the supplied window. Capex of NZ$502.3m exceeded revenue and drove the pre-lease FCF deficit to its worst level on the four-period baseline. The dividend was cut to 6.25cps from 6.75cps and the payout ratio fell to 51.9% from 83.8%, consistent with a board preserving cash for the build programme.

Reported EBITDA margin sits well outside the historical range. At 80.7%, EBITDA margin is 16.8 points above the four-period mean of 63.9% and above the 47.8%–71.5% range. Part of that gap reflects definitional change: the prior comparable was disclosed as EBITDAFI, where the F captures fair value adjustments stripped out of the current EBITDA line. Like-for-like operating leverage is therefore harder to verify than the headline implies.

The shape context shows HY24 contributed 49.2% of FY24 revenue and 50.5% of FY24 EBITDAF, so a roughly balanced second half on revenue and EBITDA is the historical pattern. FY24 NPAT shape is uninformative because the second half ran a NZ$113.2m loss, almost certainly fair value-driven, which is what makes prior-period comparison difficult.

The release does not tell us how much of the FY25 capex programme is still ahead, so the second-half FCF profile cannot be sized from this filing. The improved leverage ratio is real, but it is a balance-sheet outcome of the cash raise, not of operating cash generation.

Revenue +13.5% with EBITDA +29.9% does suggest genuine operating leverage on aeronautical and retail throughput, but the EBITDA margin sitting outside the historical range and the EBITDAFI-versus-EBITDA labelling change argue for treating the margin step-up cautiously until like-for-like reconciliation is visible.

The cash side is weaker than the P&L. FCF/NPAT at -168.6% reflects the heavy capex phase rather than a one-off, but the additional drag from working capital is timing-driven and recoverable only if receivables normalise. The board's 7.4% dividend cut and the lower NPAT payout ratio of 51.9% are consistent with management treating the current cash profile as constrained, even with leverage at 4.96x looking favourable versus the four-period mean of 11.23x.

This briefing cannot assess passenger volume trends, project completion timing, or the regulated aeronautical pricing reset, none of which are quantified in the supplied release excerpts.