Revenue fell 38.5% and NPAT swung to a $0.8m loss in H1 2020

EBITDA more than halved to $1.1m (from $2.45m) and the group swung from a $0.7m NPAT in HY19 to a $0.8m loss, a -209.0% movement; PBT growth was -201.2%. Operating cash inflow fell to $0.7m from $1.1m, and after $1.8m of capex (largely intangibles) free cash flow was -$1.0m versus -$0.5m. Total equity rose 64% to $12.3m, indicating a recapitalisation, while gross borrowings fell 46% to $3.6m. Even so, the cash balance shrank and net debt swung from -$0.4m (net cash) to $0.5m. This release also bridges the WDT-to-AOF issuer transition.

Motors (61% of revenue, gross margin 21.5%) posted a $1.3m segment loss, and IoT (39% of revenue, gross margin 44.1%) posted a $1.0m loss. The IoT line was supposed to be the strategic growth engine — its 40.6% revenue decline in the half undercuts the FY19 narrative of "year on year revenue growth and improved profitability" and means margin mix can no longer offset Motors' low-teens gross margin.

The balance sheet was rebuilt, not earned. Equity rose $4.8m while gross borrowings fell $3.0m — a clean recapitalisation that traded leverage for share count. This is what is funding the business through a demand shock, not operating cash generation.

Tax does not distort the read. The effective tax rate moved from +5.2% to -2.1%, but the loss is small enough that PBT growth (-201.2%) and NPAT growth (-209.0%) tell the same story. The 7.8pp gap between them is immaterial here.

The supplied second-half shape shows HY19 contributed about 54% of FY19 revenue, so the underlying business has been roughly balanced across halves. Annualising the current half gives a $41.0m run-rate, well below FY19's $61.7m, but COVID-period demand disruption makes any straight-line extrapolation unreliable. The release does not commit to a recovery profile, so investors are left to monitor order intake into H2 without a management benchmark.

Operating cash of $0.7m was supported by a $9m collapse in trade debtors (from $18.1m to $9.5m) as activity fell — receivable days actually rose from 76 to 84, so this is volume-driven cash release, not faster collections. That tailwind does not repeat unless revenue contracts further.

Working against that, inventories rose to $4.8m and inventory days nearly doubled from 24 to 43, suggesting demand softened faster than build plans. Capex held at $1.8m (8.6% of revenue, up from 4.8%) and was directed mostly to intangibles, keeping FCF pre-lease at -$1.0m. ROE moved from +9.7% to -6.4%. Net debt is small but the direction is what matters: the business is now consuming the cash buffer the equity raise provided.

This briefing cannot assess H2 order-book visibility, the terms of the equity uplift, or the durability of customer demand beyond what the interim disclosures contain.