Table of Contents
What changed
Revenue was essentially flat at $1b (+0.4%), with fibre revenue up 7% offsetting copper decline. EBITDA was similarly unchanged at $705.0m (+0.7%), and PBT was flat at $21.0m. Reported NPAT swung to $4.0m from a $9.0m loss, but this reflects a lower tax charge ($17m vs $30m, effective rate 81% vs 142.9%) rather than any operational uplift.
The balance sheet moved materially. Gross borrowings rose $512.0m to $3.1b, cash increased to $81.0m, and net debt accordingly climbed to roughly $3.1b from $2.6b. Total equity fell $274.0m (−32.6%) to $567.0m. Net debt/EBITDA deteriorated to 4.3x from 3.7x. Operating cash flow improved to $559.0m (from $513.0m) and gross capex eased to $415.0m, lifting pre-lease free cash flow to $144.0m from $86.0m. The final dividend rose 21.1% to 34.5cps, taking the total FY25 dividend to 57.5cps.
What matters
- Leverage direction. A $512.0m increase in gross borrowings alongside a $274.0m equity reduction is the dominant signal. Net debt/EBITDA moving to 4.3x on flat EBITDA means capacity for further debt-funded capex and shareholder returns is narrowing, even if the headline revenue and EBITDA numbers look stable.
- Dividend vs free cash flow. The total FY25 dividend (57.5cps) represents roughly 160% of pre-lease FCF of $144.0m, so distributions continue to be funded in part by additional borrowing rather than internally generated surplus. This is the mechanical link between the rising dividend and rising leverage.
- Earnings quality is tax-driven. PBT was unchanged year on year; the entire NPAT swing came from the tax line. Using PBT as the cleaner read, there is no underlying operating improvement in FY25.
Expectations
No quantitative guidance or forward-work disclosure was provided in the supplied excerpts, so there is no explicit target to test against. On shape, HY25 delivered 49.3% of FY25 revenue and 49.1% of FY25 EBITDA, indicating only a marginal second-half skew on the top line and operating earnings. The NPAT pattern was the opposite — HY25 NPAT of −$5.0m versus full-year $4.0m implies the second half was the positive swing on bottom line, again largely a tax effect rather than an operating acceleration. The release supports a view of a steady revenue/EBITDA base but does not support expectations of near-term deleveraging at current capex and dividend settings.
Quality of result
EBITDA stability looks durable and is consistent with the regulated fibre revenue mix (fibre revenue +7%). Cash conversion also improved genuinely, with OCF/EBITDA rising to 79.3% from 73.3% and receivable days tightening modestly to 34.2 from 36.1.
Against that, the NPAT print is low-quality: PBT was flat and the improvement is entirely a lower tax charge, which should not be treated as a run-rate. Capex/revenue remains high at 40.9%, and the pre-lease FCF improvement, while real, does not cover the declared dividend. The combination of flat operating earnings, rising gross debt, and falling equity indicates the result is being balance-sheet-assisted at the shareholder-return level.
Unresolved
- What is driving the $274.0m fall in total equity — cumulative distributions in excess of earnings, or other equity movements not visible in the excerpts provided?
- What is the composition of the $512.0m increase in gross borrowings, and over what tenor, given leverage is now 4.3x EBITDA?
- Is the 57.5cps FY25 dividend sustainable under current capex intensity, or will it need to reset once leverage thresholds bind?
- Why was the effective tax rate 81% this year and 142.9% last year, and what is the normalised tax run-rate?
- No detailed EBITDA-to-statutory reconciliation, segment margin disclosure, or customer concentration detail is provided in the excerpts.
This briefing cannot assess regulatory revenue-cap settings, covenant headroom on the enlarged debt stack, or the underlying cash tax trajectory.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $1b | $1b | +0.4% ↑ |
| EBITDA | $705m | $700m | +0.7% ↑ |
| Net profit after tax | $4m | −$9m | +144.4% ↑ |
| Net cash inflow from operating activities | $559m | — | — |
| Final dividend per share | 34.5c | 28.5c | +21.1% ↑ |
| Cash and cash equivalents | $81m | $45m | +80.0% ↑ |
| Total assets | $6.1b | $6b | +1.3% ↑ |
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | +0.0% | — | cleaner earnings measure |
| Effective tax rate | 81.0% | 142.9% | — |
| OCF / EBITDA (cash conversion) | 79.3% | 73.3% | stable |
| FCF pre-lease | $144m | $86m | +$58m |
| FCF / NPAT | n/m | -955.6% | complementary conversion metric |
| Capex % revenue | 40.9% | 42.3% | — |
| Capex | $415m | $427m | −$12m |
| Debtor days | 34.2 | 36.1 | -1.9 days |
| Operating working capital | $95m | $100m | −$5m absorbed |
| Trade debtors | $95m | $100m | −$5m |
| Net debt | $3.1b | $2.6b | +$476m |
| Net debt / EBITDA | 4.30x | 3.70x | Weakening |
| Gross borrowings | $3.1b | $2.6b | +$512m |
| Payout ratio vs NPAT | n/m | — | — |
| Payout ratio vs FCF pre-lease | 159.7% | — | not covered |
| ROE (annualised) | 0.7% | -1.1% | Strengthening |
| HY25 share of FY25 revenue | 49.3% | — | Other half was 50.7% |
| HY25 share of FY25 EBITDA | 49.1% | — | Other half was 50.9% |
| HY25 share of FY25 NPAT | 125.0% | — | Other half was -25.0% |
| Profit from continuing operations | — | $9m | — |
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.