Table of Contents
What changed
Revenue was essentially flat at $140.2m (+0.3%) and EBITDA fell 1.8% to $93.4m. Below the EBITDA line, the decline widened: PBT was down 12.5% to $31.9m and NPAT down 15.1% to $11.8m. Profit from continuing operations fell 19% to $20.9m, with a $9.1m after-tax loss from discontinued operations (an improvement from FY24's $12.1m loss) bringing NPAT to $11.8m.
Operating cash flow was the bright spot, up 14.6% to $74.4m, helped by modestly lower capex of $50.1m (vs $52.6m). However, gross borrowings rose $35.0m to $334.7m, net debt climbed to ~$331.8m, and net debt/EBITDA moved to 3.6x from 3.1x. Equity fell $38.6m to $779.6m. The final dividend was lifted 2.3% to 6.75 cents per share.
What matters
- Leverage direction. Net debt/EBITDA stepped up from 3.1x to 3.6x in a year when EBITDA declined. The broadened target credit metric range to BBB/BBB+ and the lifted payout ratio (70–90% of Normalised FCF) suggest management is formalising a more leveraged capital structure rather than defending the prior band.
- Dividend not covered by earnings or FCF. At 6.75cps, the payout represents 232.8% of statutory NPAT and 113.3% of pre-lease FCF ($24.2m). The business is relying on debt capacity and the "Normalised FCF" definition (not reconciled in the supplied excerpts) to fund distributions.
- Tax step-up, not discontinued operations, drove the NPAT underperformance. The effective tax rate rose to 34.3% from 28.8%, while the discontinued-operations drag actually narrowed. PBT down 12.5% is the cleaner read on the year.
Expectations
Management has guided FY26 EBITDA to $95–100m, implying 1.7%–7.1% growth off FY25's $93.4m (midpoint 4.4%). An August contract extension flagged as delivering ~$50m of incremental revenue and the Z Energy jet storage project tracking for H2 2026 completion provide the shape of the recovery. FY25 itself was not second-half weighted — H1 delivered 98.6% of full-year NPAT, leaving implied H2 NPAT of just $0.2m — so the FY26 guide requires a notable improvement over the H2 run rate rather than simple continuation.
Quality of result
The operating cash flow improvement is real: OCF/EBITDA rose to 79.7% from 68.2%. But the headline earnings decline is durable rather than optical — EBITDA actually fell, depreciation and finance costs together took operating profit down 14.4%, and the higher effective tax rate suggests limited bounce-back below the line. Pre-lease FCF doubling to $24.2m is flattered by unchanged high capital intensity (capex at 35.7% of revenue), and it is still well short of the dividend. The balance sheet has assisted the capital return: gross borrowings up $35.0m roughly matches the equity drawdown, consistent with distributions funded through leverage rather than earnings.
Unresolved
- The reconciliation between statutory results and "Normalised Free Cash Flow" (the new payout reference) is not in the supplied excerpts, so the genuine dividend coverage cannot be independently verified.
- Why the effective tax rate jumped to 34.3%, and whether this persists into FY26, is not explained in the material provided.
- The H2 NPAT near-zero outcome despite relatively even H1/H2 revenue and EBITDA splits implies a concentrated below-EBITDA charge in the second half that is not broken out in the supplied data.
- Throughput trends for FY25 (prior year disclosed 3% growth to 3.5 billion litres) are not in the current excerpts, limiting the read on underlying demand.
This briefing cannot assess valuation, segment economics, or the durability of the new contract extension's ~$50m revenue beyond what the headline release discloses.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $140.2m | $139.8m | +0.3% ↑ |
| EBITDA | $93.4m | $95.1m | -1.8% ↓ |
| Net profit after tax | $11.8m | $13.9m | -15.1% ↓ |
| Net cash inflow from operating activities | $74.4m | $64.9m | +14.6% ↑ |
| Final dividend per share | 6.8c | 6.6c | +2.3% ↑ |
| Operating profit | $48.3m | $56.4m | -14.4% ↓ |
| Profit before tax | $31.9m | $36.4m | -12.5% ↓ |
| Cash and cash equivalents | $2.9m | $1.3m | +126.2% ↑ |
| Total assets | $1351.6m | $1348.1m | +0.3% ↑ |
Reference: annolyse.ai/briefings/chi-fy25
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | -12.5% | — | cleaner earnings measure |
| Effective tax rate | 34.3% | 28.8% | — |
| OCF / EBITDA (cash conversion) | 79.7% | 68.2% | stable |
| FCF pre-lease | $24.2m | $12.3m | +$12.0m |
| FCF / NPAT | 205.6% | 88.4% | complementary conversion metric |
| Capex % revenue | 35.7% | 37.6% | — |
| Capex | −$50.1m | $52.6m | −$102.7m |
| Free cash flow | — | $63400.0m | — |
| Debtor days | 37.3 | 35.1 | +2.2 days |
| Inventory days | 13.2 | 14.2 | -1.0 days |
| Operating working capital | $19.4m | $18.9m | +$0.5m absorbed |
| Trade debtors | $14.3m | $13.4m | +$0.9m |
| Net debt | $331.8m | $298.5m | +$33.4m |
| Net debt / EBITDA | 3.60x | 3.10x | Weakening |
| Gross borrowings | $334.7m | $299.7m | +$35.0m |
| Payout ratio vs NPAT | 232.8% | — | — |
| Payout ratio vs FCF pre-lease | 113.3% | — | not covered |
| HY25 share of FY25 revenue | 50.1% | — | Other half was 49.9% |
| HY25 share of FY25 EBITDA | 51.9% | — | Other half was 48.1% |
| HY25 share of FY25 NPAT | 98.6% | — | Other half was 1.4% |
| Profit from continuing operations | $20.9m | $26.0m | −$5.0m |
| Discontinued operation after tax | −$9.1m | −$12.1m | +$2.9m |
Reference: annolyse.ai/briefings/chi-fy25
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.