PBT up 35.4% with operating cash doubled to $42.9m on inventory release

NPAT grew 55.1% to NZ$10.7m, which is classified as an unprecedented high against the historical range, but the gap between PBT and NPAT growth (-19.7pp) is driven by the effective tax rate falling from 33.9% to 29.2% — closer to the historical mean of 29.7%.

Operating cash flow more than doubled to NZ$42.9m (from NZ$19.6m), supported by a NZ$29.6m, or 11.8%, reduction in inventories to NZ$221.5m. Cash and equivalents rose to NZ$15.7m, equity grew to NZ$316.7m and total assets fell 4.4% to NZ$570.2m. The interim dividend was held at 15.0 cents per share.

• With the tax rate normalising downward by 4.7 percentage points, NPAT growth of 55.1% overstates the operating step-up. PBT growth of 35.4% on revenue +8.8% is the figure to anchor on, and that gain is real but more measured than the headline implies.
• A NZ$29.6m inventory release is doing most of the cash work. Operating cash flow rose NZ$23.3m year on year while PBT only rose NZ$4.0m; the difference is largely inventory drawdown, not earnings translation. That is a balance-sheet-assisted cash result, and any return to inventory rebuild — particularly if revenue continues at the annualised NZ$1.1bn pace — would absorb cash in coming periods.
• The prior comparable was unusually weak. Annolyse's supplied second-half shape shows FY25 H2 NPAT was an implied NZ-2.4m loss, meaning HY25 carried 152.6% of the full-year result. Strong percentage growth versus that base flatters the durability read; PBT margin at 2.8% remains within the historical 2.2%–4.9% range and below the 3.5% mean.

No full-year target has been provided, and there is no commentary disclosing forward order book or stocking position.

Against the supplied shape context, FY25 H2 was loss-making, so even a flat H2 in absolute earnings terms would reset the full-year trajectory materially upward. The unanswered question is whether the H1 inventory release reflects clearing of overweight stock from FY25 — in which case H2 may need restocking — or a structural shift in working-capital intensity.

The operating gain at PBT level (+NZ$4.0m) is consistent with revenue expansion of NZ$44.6m and reflects a genuine recovery from a weak comparable. However, the lower effective tax rate adds visible support to NPAT, and the NZ$29.6m inventory release adds substantially more support to operating cash flow. Cash conversion this half is unusually high precisely because working capital is releasing rather than investing.

Balance-sheet direction is supportive: equity grew NZ$13.6m, total assets fell 4.4%, cash rose to NZ$15.7m and gross borrowings of NZ$52.0m imply net debt of roughly NZ$36.4m. The payout ratio against NPAT fell to 45.7% from 70.8% (within the historical 27.1%–70.8% range) because earnings rose against a flat 15.0 cps interim dividend, leaving headroom for capital flexibility rather than signalling a change in dividend policy.

This briefing cannot assess vehicle volumes, brand-mix, used-vehicle margins, or property revaluation drivers because the disclosure does not break out unit economics or per-segment margin detail.