PBT fell 38.1% and capex rose 59.6%, turning FCF negative

EBITDA was NZ$548.0m, and operating cash flow dropped 57.7% to NZ$411.0m from NZ$972.0m in HY23.

Capex stepped up 59.6% to NZ$458.0m (13.2% of revenue versus 9.2% prior), tipping pre-lease free cash flow to -NZ$47.0m from +NZ$685.0m. Cash on hand fell NZ$490.0m to NZ$1.7b, while gross borrowings fell NZ$190.0m to NZ$1.6b and total equity rose 8.1% to NZ$2b. An unimputed interim dividend of 2.0 cps was declared.

1. PBT down 38.1% sits within Annolyse's historical baseline (range -138.1% to +179.5%), and PBT margin of 5.3% is above the 4.1% historical mean. The decline reflects fading post-reopening pricing rather than an operating break, but it confirms the HY23 NZ$299.0m run-rate was not a sustainable base.

2. Cash conversion fell materially even though it sits in the historical range. OCF/EBITDA of 75.0% is structurally adequate, but OCF fell 57.7% against 11.2% revenue growth because HY23 benefited from a large forward-booking working-capital release; in HY24, working capital built NZ$59.0m. That swing means reported earnings are no longer being amplified by cash timing.

Payout ratio versus pre-lease FCF is suppressed because the source-backed cash-dividend bridge is unavailable.

With HY24 PBT already at NZ$185.0m, the guidance implies underlying H2 PBT of roughly -NZ$5.0m to NZ$35.0m — a sharp step-down from a typically H1-weighted earnings shape (HY23 was 51.7% of FY23 NPAT). This matters because the second-half profile is materially weaker than seasonality alone would suggest, pointing to fuel, capacity or yield headwinds management has flagged but not quantified in the supplied excerpts.

No multi-year target is supplied, so the read is confined to this guidance shape and the current half.

The PBT-to-NPAT growth gap is only 1.3pp and the effective tax rate of 30.3% is within the historical 28.8%–32.2% range, so tax has not distorted the underlying read. NPAT margin of 3.7% and ROE of 6.3% both sit within the historical baseline, with ROE exactly equal to the three-period mean.

Cash quality is the weaker leg. Receivable days extended to 26.1 from 24.1, and operating working capital built NZ$59.0m versus a NZ$524.0m release in HY23 — a normalisation rather than a deterioration, but it removes the cash-flow tailwind that supported the prior comparable. Combined with capex of NZ$458.0m, the result is pre-lease FCF of -NZ$47.0m, which sits within the historical range (mean NZ$110.7m) but is well below the NZ$685.0m generated a year ago. So the 11.2% revenue rise has not yet translated into discretionary cash, and the dividend is being paid from balance-sheet liquidity, not from the period's cash generation.

This briefing cannot assess fleet-renewal timing, fuel hedging position, or the composition of the NZ$20.0m one-off embedded in FY24 guidance, none of which are quantified in the supplied excerpts.