BurgerFuel NPAT up 47% on 13.6% revenue growth, OCF slipped 5%

Management describes this as the strongest result since the 2007 NZX listing, supported by unaudited total system sales (all three brands, all regions) of $117.1M, up 10.2%, helped by the Dunedin store (April 2023) and the rollout of delivery through BurgerFuel outlets.

The cash result is the offsetting line. Net operating cash inflow fell from $3.1M to $2.9M despite the earnings step-up, taking OCF/EBITDA conversion to 81.3% from 93.8%. Cash on hand still rose to $9.6M from $8.2M because capex was almost halved to $0.5M (capex/revenue 2.0% versus 5.2%). Equity grew to $13.2M and ROE strengthened to 10.1% from 7.6%. No dividend was declared.

• OCF/EBITDA dropped roughly 12.5 percentage points to 81.3% and the absolute OCF figure fell about 5%. This matters because the headline 47% NPAT lift is not flowing through to cash at the same pace, which weakens the cash-quality read on an otherwise strong P&L year.

• Capex was cut by 56.8% to $0.5M. That helped lift FCF pre-lease to $2.4M from $1.8M and pushed FCF/NPAT to 179.7%, but the cash flow improvement is investment-driven, not operations-driven. Management has not disclosed whether this lower run-rate is the new base or a one-year pause after a heavy FY23 store and intangibles spend ($1.2M).

• Operating fundamentals are genuinely stronger. Sales momentum (+10.2% system sales), the New Zealand segment lifting result to $2.2M from $1.6M, and ROE moving to 10.1% from 7.6% all point to underlying improvement. The international segment remains loss-making at -$0.3M but is immaterial at 0.1% of revenue.

The HY24 interim contributed 45.6% of full-year revenue, 51.0% of EBITDA and 43.8% of NPAT, meaning the second half delivered the larger NPAT contribution. That is consistent with management's commentary that delivery and a full year of recently opened stores would build through FY24.

What the release does not support is any read on FY25 trajectory. Management points to delivery and store openings as drivers but does not quantify a forward sales or earnings shape, and no dividend or capital-return framework was articulated.

PBT growth and NPAT growth are essentially aligned, so there is no tax distortion masking the underlying earnings move.

The cash quality is weaker than the P&L suggests. OCF fell in absolute terms despite EBITDA being higher, so working-capital and timing effects absorbed cash that the income statement reported as profit. The strong-looking FCF/NPAT ratio of 179.7% is achieved largely by halving capex rather than by stronger operating cash. If FY23 capex of $1.2M is closer to the maintenance and growth-investment run-rate, FCF would normalise materially lower than the FY24 print.

This briefing cannot assess same-store sales, input-cost pressure, or franchisee economics, none of which are quantified in the supplied release.