Revenue fell 61% as a discontinued ANZ operation reshaped the result

On a continuing-operations basis, the release commentary indicates revenue actually rose, with the US and Brazil markets reporting positive revenue and earnings growth.

PBT swung from NZ$3.6m to a NZ$0.9m loss, a -125.0% movement, and net loss from continuing operations was NZ$0.5m. NPAT held at NZ$0.1m only because a NZ$0.6m after-tax gain from the discontinued ANZ operation offset the continuing-operations loss. Operating cash flow collapsed from NZ$3.4m to NZ$0.1m, and capex more than doubled to NZ$1.9m, driving pre-lease free cash flow to NZ$-1.8m from NZ$2.7m. Gross borrowings reduced to NZ$33.8m from NZ$37.4m.

Prior-period numbers include ANZ; current numbers split it out as discontinued. The 61.3% revenue decline and -125.0% PBT movement are presentation artefacts of that restructure, not a demand collapse. Management's own framing — "positive uplift in revenue for continuing operations" and operating earnings of NZ$0.6m "in line with pcp" — is the more relevant read, but the reported group P&L obscures it.

NPAT quality is poor. Continuing operations lost NZ$0.5m; the NZ$0.6m discontinued-operation contribution is the entire reason the group printed a profit. Annolyse's historical baseline shows NPAT margin of 2.2% is above the three-period range of -21.6% to -0.8%, but that ranking is mechanically lifted by the disposal gain rather than operating improvement. The cleaner read is the PBT loss.

Capex intensity and inventory write-down pressure FY22. Capex reached 41.3% of revenue versus 5.9% prior, and management has flagged approximately 25 million seedlings (around 7% of inventory) lost in the early-season count, with second-half costs projected higher on inflation and supply-chain constraints. This sets up a more difficult H2 against re-confirmed US GAAP EBITDA guidance of US$11.3m to US$11.7m.

However, the release also flags lower projected OP seedling volumes from customer supply-chain issues and higher H2 labour, fuel and material costs. Re-confirming guidance while simultaneously highlighting cost inflation, volume softness in OP seedlings, and a 7% inventory loss leaves limited margin for further negative surprises.

No interim historical pattern is supplied for full-year shape on a continuing-operations basis, so the H1 result cannot be cleanly benchmarked against the guided range without management's own bridge.

The NZ$0.1m NPAT is entirely attributable to a NZ$0.6m discontinued-operation gain offsetting a NZ$0.5m loss from continuing operations. Operating cash flow of NZ$0.1m is effectively breakeven, capex stepped up to NZ$1.9m, and pre-lease free cash flow of NZ$-1.8m sits at the better end of Annolyse's historical range of NZ$-7.2m to NZ$-0.8m — but only because the comparable mean is itself negative. FCF-to-NPAT of -1800% confirms cash generation did not back the headline profit.

Annolyse's historical baseline flags the working-capital release of NZ$-3.1m as below the company's normal range, where the three prior periods all showed builds averaging NZ$2.9m. That release modestly helped operating cash flow this period; if it reverses as inventory rebuilds into the next planting cycle, the cash starting point for H2 is weaker than the OCF line suggests. Gross borrowings reduced by NZ$3.6m, but with negative FCF this reflects balance-sheet activity rather than internally generated cash.

This briefing cannot assess the underlying continuing-operations growth rate or margin trajectory because a restated prior-period comparable on a continuing-operations basis is not supplied.