NPAT up 33% as operating cash flow jumped 70% on receivables release

Operating leverage drove EBITDA up 25.8% to $1.0m, PBT up 28.6% to $0.9m, and NPAT up 33.3% to $0.8m.

The cash result was the standout: net cash from operating activities rose 70% to $1.8m, with cash conversion (OCF/EBITDA) lifting to 178.5% from 132.0% prior. Closing cash was broadly flat at $4.2m, and the balance sheet remains debt-free.

The shape was heavily second-half weighted. HY25 contributed only 27.3% of full-year NPAT and just 0.3% of full-year operating cash flow, implying $0.6m of NPAT and $1.8m of OCF in the second half alone.

Revenue growth of 9.7% translated into EBITDA growth of 25.8% and NPAT growth of 33.3%. ROE strengthened to 6.8% from 5.6%. With no debt and a fixed cost base, incremental revenue is dropping through, but absolute earnings remain modest at $0.8m on $12.6m of revenue, so small revenue moves continue to swing the result materially.

Cash conversion was assisted by working-capital release. Receivable days fell to 30.5 from 41, freeing roughly $0.2m of working capital, while inventory days were broadly stable. That helped OCF run at 197.7% of NPAT and FCF at $1.7m on capex of just $0.1m (1.1% of revenue). The conversion is high-quality at the operating level but partly draws on a one-time debtor compression that will not repeat at the same magnitude.

The second-half skew matters for run-rate framing. Almost all of the year's operating cash arrived in H2, which means the headline cash conversion reflects a single strong half rather than a steady cadence. Annualising the H2 run-rate would imply materially higher revenue and earnings, but there is no disclosed shape commentary to confirm whether the second-half strength is structural or timing-driven.

Commentary references "unexpected intellectual property issues" being addressed during the year, but the release does not quantify any associated cost or recovery effect.

Set against the HY25 release, which flagged a 25% revenue lift and $0.3m of EBITDA in the first half, the full-year shape implies the second half ran materially harder on both revenue ($6.7m implied) and profit ($0.6m implied NPAT). Without management framing of seasonality, B2B order timing, or royalty phasing, it is not possible to determine how much of that second-half strength carries into FY26.

There are no disclosed non-recurring items in the result, the EBITDA-to-PBT bridge is narrow ($0.1m of D&A and net interest), and the effective tax rate fell only modestly to 5.9% from 7.2%, so tax did not flatter the NPAT line in any meaningful way. PBT growth of 28.6% and NPAT growth of 33.3% are within 5pp of each other, supporting the operating read.

Cash quality is more nuanced. Headline OCF of $1.8m exceeds NPAT of $0.8m by a wide margin, but a meaningful portion of the lift came from a $0.2m operating working-capital release, with debtor days dropping more than ten days. Stripped of that release, cash generation still comfortably covers reported earnings, but the 178.5% conversion ratio is unlikely to repeat without further working-capital tailwinds. Capex of $0.1m is light relative to revenue and may understate the reinvestment needed to sustain growth, particularly given the IP issues referenced in commentary.

This briefing cannot assess underlying segment economics, customer concentration, or the durability of the second-half run-rate without segment-level disclosure or forward guidance.