PBT fell 42.5% as margin reset to an unprecedented 40.4%

EBITDA dropped 37.4% to $15.6m.

NPAT fell only 27.9% to $11.1m because the effective tax rate normalised to 28.3% from 42.5%, with the prior period carrying a disclosed $3.9m one-off non-cash deferred tax adjustment tied to the commercial-buildings depreciation policy change. The 14.6pp gap between PBT growth (-42.5%) and NPAT growth (-27.9%) is the size of that distortion.

Cash on the balance sheet fell from $32.8m to $13.9m. The final dividend was cut to 1c from 3.5c.

Revenue at -22.3% sits within the company's historical range, but the PBT margin breaking below the prior 47.3% floor is new information about through-cycle profitability in residential land development. With residential land contributing 91.8% of revenue and segment result falling from $24.6m to $12.5m, this looks like price/mix on settled sections rather than a pure volume effect.

PBT is the cleaner operating read. The 28.3% current tax rate is within the historical range (mean 31.6%), but the 42.5% prior rate carried the deferred tax adjustment. NPAT growth of -27.9% understates the operating deterioration; the -42.5% PBT decline is the figure that matters for comparing to the prior comparable.

Capital allocation has tightened materially. The payout ratio fell to 26.5% of NPAT from 66.3%, well below Annolyse's historical baseline mean of 51.5%. Combined with the cash drawdown to $13.9m, the dividend cut signals the board is conserving capital — consistent with management's reference to expediting inventory and awaiting a Havelock North decision in Q1 2026.

The HY25 context shows the year was second-half weighted (H1 delivered 36.1% of revenue, 32.2% of NPAT), which is typical for lumpy section settlements but limits what the half-year tells us about run-rate.

Management cites a "subdued residential sales environment" and continued diversification away from residential — but with 91.8% of revenue still in residential land, that diversification has not yet meaningfully insulated the result.

Beyond the tax distortion, two quality flags warrant attention:

• Operating cash flow was -$9.0m versus -$8.1m prior; OCF/EBITDA fell to -57.5% from -32.5%. Pre-lease FCF at -$9.0m sits within Annolyse's historical baseline (range -$10.3m to $11.2m), so this reflects the inherent lumpiness of land development rather than a new working-capital problem, but it does not improve the picture.
• Capex collapsed 97.5% to $0.025m from $1.0m. That saving flatters the FCF bridge but is discretionary and not repeatable as an earnings support.

ROE fell to 3.5% from 4.9%, putting it below the historical baseline range (mean 7.6%, range 4.3%–10.9%). Total assets at $331.6m are above the historical baseline mean of $314.8m, so the lower return is being earned on a slightly larger asset base — making the ROE compression a function of the earnings step-down, not capital release.

This briefing cannot assess land-bank carrying values, forward section pricing, or the timing of consented inventory coming to market.