Pre-lease FCF fell to NZ$-7.2m as gross borrowings rose 61.9% to NZ$34.0m

Annolyse's historical baseline puts pre-lease FCF in a –NZ$4.8m to –NZ$0.8m range with a three-period mean of –NZ$2.5m, so the current outcome sits below normal. To fund this, gross borrowings rose 61.9% to NZ$34.0m and net debt nearly doubled to NZ$30.4m.

Headline revenue rose 7.6% to NZ$14.2m, described by the company as a record HY result, with Brazil contributing 99.3% of group revenue. EBITDA deteriorated to –NZ$2.1m from –NZ$0.5m. PBT growth of –33.3% is the cleaner read; NPAT growth of –500.0% is distorted by a swing in the effective tax rate from –93.3% to 70.0%.

OCF/EBITDA at 257.1% (current) versus –420.0% (prior) is mathematically flattered by both numerators being negative; the more useful read is that operating cash flipped to a NZ$5.4m outflow while operating working capital absorbed a further NZ$5.0m, taking owc to NZ$48.5m. Pre-lease FCF below the historical range matters because it forced incremental drawdown rather than relying on existing cash.

Leverage has stepped up materially. Gross borrowings rose by NZ$13.0m and total equity fell 15.5% to NZ$125.5m, so financial flexibility is narrower entering the seasonally larger 2H. With EBITDA negative in this half, leverage ratios cannot be benchmarked, but the directional shift is clearly weakening.

The business is structurally 2H-weighted, not balanced. HY25 represented only 20.9% of FY25 revenue and 0.5% of FY25 NPAT, so a record HY in absolute terms still annualises to NZ$28.4m against FY25 revenue of NZ$63.2m. Management commentary references US sales being recognised in 2H26, which means this release does not yet test the full-year thesis.

Using the FY25 shape as the only available shape proxy, the implied 2H FY25 contributions were NZ$50.0m of revenue and –NZ$21.4m of NPAT, so the second half is where both the upside and the loss exposure sits. The current half's record volumes and Brazil momentum are supportive directional signals, but the release does not provide a quantitative target against which to test conversion of HY momentum into FY26 outcomes.

What this release does support is that Brazil demand remains the operating engine and that US contribution is timing-deferred. What it does not support is any conclusion on whether 2H cash generation will recover the NZ$7.2m pre-lease FCF deficit.

Capex rose 80% to NZ$1.8m, lifting capex intensity to 12.7% of revenue from 7.6%, and inventories grew NZ$2.1m to NZ$48.8m as the company positions for 2H selling. Both are forward-looking uses of cash, but they are choices that depend on the 2H sell-through actually arriving.

The PBT line is the more reliable operating read this period. PBT growth of –33.3% sits at the upper edge of the historical –125.0% to +6.3% range and is 32.2 percentage points above the three-period mean of –65.5%, so by Annolyse's historical baseline the underlying loss has narrowed relative to recent halves. The 466.7pp gap between PBT and NPAT growth is explained by the 70.0% effective tax rate this period against –93.3% prior — a presentational distortion, not a deterioration in operating economics.

This briefing cannot assess 2H26 execution, US order pipeline conversion, or covenant headroom on the expanded debt facilities, none of which are quantified in the supplied materials.