Table of Contents
What changed
Revenue declined 2.9% to NZ$203.1m and Operating EBITDA was essentially flat at NZ$74.8m (+0.8%). Earnings diverged sharply below that line: statutory operating profit printed NZ$56.0m (+39.4%), but PBT fell 17.2% to NZ$46.4m and NPAT fell 17.9% to NZ$33.4m. Operating cash flow was steady at NZ$35.8m (+1.4%), but capex rose to NZ$44.8m from NZ$30.4m, swinging pre-lease free cash flow to a NZ$9.1m outflow from a NZ$4.9m inflow. Gross borrowings rose NZ$43.6m to NZ$357.6m, cash fell to NZ$5.3m, and net debt/EBITDA stepped up to 4.7x from 4.1x. On segments, Delegat Limited's margin compressed to ~12.1% from ~15.1%, and Delegat USA's margin collapsed to ~1.2% from ~3.8% on an NZ$11.3m revenue decline.
What matters
- Leverage direction: Net debt of NZ$352.3m against flat EBITDA takes gearing to 4.7x. With capex running at 22.1% of revenue (vs 14.5% in HY23) and FCF negative, the balance-sheet trajectory is the dominant read-through from this result.
- Gap between EBITDA and NPAT: With the effective tax rate broadly stable (27.9% vs 27.3%), the fall-through from flat EBITDA to an 17.2% PBT decline is driven below operating profit — consistent with materially higher finance costs on a larger debt stack. The release excerpt also flags operating profit "from ordinary" down 6%, suggesting the +39.4% statutory operating profit line is flattered by non-operating items such as biological asset/fair value movements.
- US segment deterioration: Delegat USA contributed NZ$1.4m of segment result on NZ$110.8m of revenue, versus NZ$4.6m on NZ$122.1m a year earlier. This is the most concrete evidence of demand or pricing pressure in the period.
Expectations
No quantified guidance, forward work or targets were disclosed in the extracted release. FY23 was first-half weighted (HY23 delivered 54.8% of full-year revenue, 57.9% of EBITDA and 62.8% of NPAT), so HY24's 2.9% revenue decline does not mechanically read across to a full-year decline of the same magnitude — annualising HY24 revenue gives NZ$406.2m, 6.5% above FY23. But if the same first-half weighting holds, the implied second half would be softer still in absolute terms, and the deterioration at NPAT level would need to narrow for the group to match FY23's NZ$64.8m. The release does not support or reject that shape directly.
Quality of result
Mixed. Cash conversion against EBITDA was stable (47.8% vs 47.5%), but this was achieved while receivable days extended to 77.1 from 56.4 and inventory days to 135.5 from 121.8 — trade debtors alone rose NZ$21.3m (+32.8%). Stable OCF therefore reflects earnings resilience being partially offset by a material working-capital build, not an improvement in collection. The headline +39.4% statutory operating profit is not the cleanest operating read given the release itself cites operating profit from ordinary activities down 6% and management measures (Operating EBITDA, Operating NPAT) are used alongside statutory figures without a full bridge in the extract. The cleaner signals — flat EBITDA, weaker segment margins in the core NZ and US businesses, and lower ROE (6.2% vs 7.7%) — point to a genuinely softer underlying period.
Unresolved
- What drove the swing between statutory operating profit (+39.4%) and PBT (-17.2%)? Finance costs and biological asset/fair value movements are the likely culprits, but the extract does not disclose the split.
- Is the US margin compression a pricing, mix or inventory-clearance issue, and is it expected to persist?
- With capex running well ahead of operating cash flow, what is the peak capex profile and is the current debt facility sized for it?
- No interim dividend is marked in the release ("Not Applicable" on payment date); whether this reflects a shift in distribution policy or simply timing is not resolvable from the extract.
- FX exposure is material across four geographies, and no hedge sensitivity is provided.
This briefing cannot assess the underlying case volume, pricing and inventory positioning by market, which are required to judge whether the HY24 margin compression is cyclical destocking or a structural reset.
Key metrics
| Metric | HY24 | HY23 | Change |
|---|---|---|---|
| Revenue | $203.1m | $209.2m | -2.9% ↓ |
| EBITDA | $74.8m | $74.2m | +0.8% ↑ |
| Net profit after tax | $33.4m | $40.7m | -17.9% ↓ |
| Net cash inflow from operating activities | $35.8m | $35.3m | +1.4% ↑ |
| Operating profit | $56.0m | $40.2m | +39.4% ↑ |
| Profit before tax | $46.4m | $56.0m | -17.2% ↓ |
| Cash and cash equivalents | $5.3m | $8.1m | -34.9% ↓ |
| Total assets | $1.1b | $1b | +9.5% ↑ |
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Delegat Limited | $220.4m | $238.6m | $26.7m | +6.4pp |
| Delegat Australia Pty Ltd | $34.7m | $33.0m | $0.5m | +1.9pp |
| Delegat Europe Limited | $61.5m | $54.0m | $1.4m | +4.1pp |
| Delegat USA, Inc. | $110.8m | $122.1m | $1.4m | +2.9pp |
| Other Segments10 | $7.4m | $91.7m | $0.4m | -15.3pp |
Analytical metrics
| Metric | HY24 | HY23 | Context |
|---|---|---|---|
| PBT growth | -17.2% | — | — |
| Effective tax rate | 27.9% | 27.3% | — |
| OCF / EBITDA (cash conversion) | 47.8% | 47.5% | stable |
| FCF pre-lease | −$9.1m | $4.9m | −$14.0m |
| FCF / NPAT | -27.1% | 12.0% | complementary conversion metric |
| Capex % revenue | 22.1% | 14.5% | — |
| Capex | $44.8m | $30.4m | +$14.4m |
| Debtor days | 77.1 | 56.4 | +20.7 days |
| Inventory days | 135.5 | 121.8 | +13.7 days |
| Trade debtors | $86.0m | $64.8m | +$21.3m |
| Net debt | $352.3m | $305.8m | +$46.5m |
| Net debt / EBITDA | 4.71x | 4.12x | Weakening |
| Gross borrowings | $357.6m | $313.9m | +$43.6m |
| ROE (annualised) | 6.2% | 7.7% | Weakening |
| HY23 share of FY23 revenue | 54.8% | — | Other half was 45.2% |
| HY23 share of FY23 EBITDA | 57.9% | — | Other half was 42.1% |
| HY23 share of FY23 NPAT | 62.8% | — | Other half was 37.2% |
| Profit from continuing operations | — | $40.7m | — |
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.