Table of Contents
What changed
Revenue rose 5.0% to NZ$61.7m, with the IoT line (Wellington Connect) up 31.6% to NZ$24.0m and now accounting for 38.9% of group revenue. EBITDA improved 71.2% to NZ$4.2m, PBT swung NZ$1.1m from a NZ$0.5m loss to a NZ$0.6m profit, and NPAT reached a maiden NZ$0.4m versus a NZ$0.7m loss. Operating cash flow rose to NZ$3.0m from NZ$1.8m, and with capex halving to NZ$0.4m, pre-lease free cash flow more than doubled to NZ$2.6m. The balance sheet flipped to a small net cash position of NZ$0.4m (from net debt of NZ$4.7m), gross borrowings fell 45.7% to NZ$3.1m, and equity more than doubled to NZ$13.1m, indicating an equity raise or capital injection alongside earnings.
What matters
- Mix shift toward IoT is the margin story. IoT delivered a ~20.2% segment result margin on NZ$24.0m of revenue versus ~9.5% for the larger Motors segment (NZ$37.7m). Continued IoT growth at these relative margins would lift group profitability faster than headline revenue suggests.
- Leverage direction has fundamentally changed. Net debt/EBITDA moved from 1.9x to roughly net cash, driven by both debt paydown (-NZ$2.6m) and a NZ$2.5m cash build. This materially lowers financial risk and funds the stated push to grow IoT.
- PBT is the cleaner read than NPAT. The FY18 effective tax rate (a benefit of 57.7% on a loss) and FY19's normalised 30.0% create a 78.8pp gap between PBT growth (+241.6%) and NPAT growth (+162.8%). PBT growth is the better trend indicator.
Expectations
No quantified revenue or earnings guidance was provided. Management's stated ambition of NZ$100m revenue within five years (from the prior-period commentary) implies a CAGR well above the 5.0% delivered this year; IoT's 31.6% growth is the only line currently tracking that trajectory. The year was slightly first-half weighted — HY19 contributed 54.0% of revenue and 58.1% of EBITDA — so the implied H2 shape was NZ$28.4m revenue, NZ$1.8m EBITDA, and an NPAT loss of NZ$0.3m. That H2 NPAT reversal is a caveat against simply annualising the full-year maiden profit.
Quality of result
The profit is real but thin and partly balance-sheet-assisted. OCF/EBITDA slipped slightly to 70.8% from 75.0%, which is modest cash conversion deterioration, but underlying cash generation nonetheless improved in absolute terms. A meaningful driver of the cash build was a NZ$3.1m (−18.1%) reduction in trade receivables, with receivable days falling from 105.0 to 81.9 — a genuine working-capital release rather than a recurring earnings source. Capex at 0.7% of revenue (versus 1.4% prior) also flattered free cash flow and is unlikely to be sustainable if IoT growth requires reinvestment. The NZ$0.4m NPAT leaves little margin for error against tax normalisation, FX moves (FX impact on cash rose to NZ$0.15m), or any reversal in receivables timing.
Unresolved
- What drove the H2 NPAT loss after a profitable H1, and is it cost phasing, mix, FX, or order timing?
- How much of the NZ$6.7m equity increase was new capital raised versus retained earnings and reserve movements, and at what dilution?
- Prior-year segment splits were not disclosed, so IoT's standalone margin trajectory cannot be verified.
- Customer concentration within the IoT book (large food and beverage customers) is not quantified.
- No formal statutory-to-EBITDA reconciliation is provided, and no forward-work or order-book metric supports the NZ$100m ambition.
This briefing cannot assess valuation, share-count or per-share metrics, or the durability of the receivables improvement into FY20.
Key metrics
| Metric | FY19 | FY18 | Change |
|---|---|---|---|
| Revenue | $61.7m | $58.8m | +5.0% ↑ |
| EBITDA | $4.2m | $2.5m | +71.2% ↑ |
| Net profit after tax | $0.4m | −$0.7m | +162.8% ↑ |
| Net cash inflow from operating activities | $3.0m | $1.8m | +61.5% ↑ |
| Operating profit | $1.5m | $0.5m | +233.6% ↑ |
| Profit before tax | $0.6m | −$0.5m | +241.6% ↑ |
| Cash and cash equivalents | $3.5m | $0.9m | +270.7% ↑ |
| Total assets | $37.9m | $35.6m | +6.4% ↑ |
Reference: annolyse.ai/briefings/aof-fy19
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Motors | $37.7m | — | $3.6m | n/a |
| IoT | $24.0m | — | $4.9m | n/a |
Reference: annolyse.ai/briefings/aof-fy19
Analytical metrics
| Metric | FY19 | FY18 | Context |
|---|---|---|---|
| Effective tax rate | 30.0% | n/m (loss period) | prior loss period |
| OCF / EBITDA (cash conversion) | 70.8% | 75.0% | deteriorated |
| FCF pre-lease | $2.6m | $1.0m | +$1.6m |
| FCF / NPAT | 575.0% | -142.1% | complementary conversion metric |
| Capex % revenue | 0.7% | 1.4% | — |
| Capex | −$0.4m | −$0.8m | +$0.4m |
| Debtor days | 81.9 | 105.0 | -23.1 days |
| Trade debtors | $13.8m | $16.9m | −$3.1m |
| Net debt | −$0.4m | $4.7m | −$5.1m |
| Net debt / EBITDA | -0.09x | 1.91x | Strengthening |
| Gross borrowings | $3.1m | $5.6m | −$2.6m |
| ROE (annualised) | 3.4% | -11.2% | Strengthening |
| HY19 share of FY19 revenue | 54.0% | — | Other half was 46.0% |
| HY19 share of FY19 EBITDA | 58.1% | — | Other half was 41.9% |
| HY19 share of FY19 NPAT | 161.2% | — | Other half was -61.2% |
Reference: annolyse.ai/briefings/aof-fy19
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX/ASX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.