Table of Contents
What changed
Revenue rose 7.6% to NZD14.2m (the company cites an 11% lift on a constant-currency/US GAAP presentation), but profitability and cash deteriorated on a statutory basis. Statutory EBITDA worsened to NZD(2.1)m from NZD(0.5)m, PBT softened to NZD(2.0)m from NZD(1.5)m, and NPAT widened to NZD(0.6)m from NZD(0.1)m. The most material move was cash: net cash from operations swung to NZD(5.4)m from NZD2.1m, a NZD7.5m deterioration, while capex stepped up to NZD1.8m. That was funded by drawing debt — gross borrowings rose to NZD34.0m from NZD21.0m, pushing net debt to NZD30.4m from NZD16.7m. Equity fell to NZD125.5m from NZD148.6m and total assets eased to NZD187.2m.
What matters
- Cash conversion broke down. An NZD7.5m swing in operating cash flow against only a NZD1.0m revenue uplift is the dominant signal in the release. Inventory days rose to 625.6 from 529.5 (inventories up to NZD48.8m), so the working-capital absorption is a stock build rather than a receivables problem — trade debtors days actually improved to 84.6 from 102.0.
- Leverage has stepped up materially. Net debt nearly doubled, and the increment (~NZD13.7m) is close to the combined operating and capex cash consumption plus capital returns. With EBITDA negative, conventional net-debt/EBITDA is not meaningful, but the direction of travel is clearly weakening and removes headroom ahead of the seasonally larger second half.
- Non-GAAP framing diverges from statutory. Management highlights "Adjusted US GAAP EBITDA of $(2.1)m, a 22% improvement on pcp," yet the statutory EBITDA comparison moves the other way (from NZD(0.5)m to NZD(2.1)m). The excerpts do not provide a bridge between the two measures.
Expectations
No quantitative target or forward-work disclosure is provided. The only shape context is FY25 itself: HY25 was just 20.9% of FY25 revenue and only 0.5% of FY25 NPAT, implying an implied H2 FY25 of roughly NZD50.0m revenue and NZD(21.4)m NPAT. The business is therefore heavily second-half weighted. HY26 annualises to NZD28.4m (~45% of FY25 revenue), so delivering against the FY25 anchor still depends on a much larger second half — and the HY26 inventory build is at least consistent with, though not evidence of, that seasonal ramp. The release does not support or refute a specific FY26 outcome.
Quality of result
The earnings deterioration is modest at the PBT line (NZD0.5m wider loss on NZD1.0m more revenue), and PBT is the cleaner read here — tax provided roughly NZD1.4m of benefit in each half, compressing the NPAT gap and making NPAT less representative of operating performance. The cash result, however, is the weaker element and is primarily working-capital-driven (inventory), not a one-off charge or a disposal. Pre-lease free cash flow was NZD(7.2)m against NZD1.1m in HY25. Until inventory converts to sales at expected margins in H2, the operating-cash swing should be treated as timing- and stock-build-related rather than durable, but the leverage incurred to fund it is already on the balance sheet.
Unresolved
- What drove the inventory build to NZD48.8m, and how much of it is discretionary (seed/seedling ramp for H2) versus unsold stock at risk?
- What is the reconciliation between statutory EBITDA of NZD(2.1)m and "Adjusted US GAAP EBITDA of $(2.1)m, a 22% improvement on pcp" — specifically what adjustments are being made in the prior period?
- What covenant headroom exists on the enlarged NZD34.0m debt stack, and what is the refinancing profile between current (NZD1.9m) and term (NZD32.1m) debt?
- Are there any customer, weather, or harvest-cycle concentrations behind the H2-weighted pattern that make this year's outturn more or less repeatable than FY25's implied H2 shape?
This briefing cannot assess segment economics, contracted forward seedling volume, or management guidance, as none of these were disclosed in the provided excerpts.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $14.2m | $13.2m | +7.6% ↑ |
| EBITDA | −$2.1m | −$0.5m | -320.0% ↓ |
| Net profit after tax | −$0.6m | −$0.1m | -500.0% ↓ |
| Net cash inflow from operating activities | −$5.4m | $2.1m | -357.1% ↓ |
| Operating profit | −$0.9m | −$0.8m | -12.5% ↓ |
| Profit before tax | −$2m | −$1.5m | -33.3% ↓ |
| Cash and cash equivalents | $3.6m | $4.3m | -16.3% ↓ |
| Total assets | $187.2m | $201.8m | -7.2% ↓ |
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| OCF / EBITDA (cash conversion) | 257.1% | -420.0% | deteriorated |
| FCF pre-lease | −$7.2m | $1.1m | −$8.3m |
| FCF / NPAT | n/m | n/m | complementary conversion metric |
| Capex % revenue | 12.7% | 7.6% | — |
| Capex | −$1.8m | −$1m | −$0.8m |
| Debtor days | 84.6 | 102.0 | -17.4 days |
| Inventory days | 625.6 | 529.5 | +96.1 days |
| Trade debtors | −$0.3m | −$3.2m | +$2.9m |
| Net debt | $30.4m | $16.7m | +$13.7m |
| Gross borrowings | $34m | −$21m | +$55m |
| ROE (annualised) | -0.5% | -0.1% | Weakening |
| HY25 share of FY25 revenue | 20.9% | — | Other half was 79.1% |
| HY25 share of FY25 NPAT | 0.5% | — | Other half was 99.5% |
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX 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.