Table of Contents
What changed
Revenue was essentially flat at NZ$179.6m (+0.5%), with case sales up 3%, but earnings leverage was pronounced: Operating EBITDA rose 6.4% to NZ$65.6m, PBT jumped 85.6% to NZ$32.2m, and NPAT rose 82.9% to NZ$22.8m. Operating cash flow fell 17.5% to NZ$62.3m, yet free cash flow before leases improved to NZ$51.8m from NZ$38.2m because capex dropped sharply to NZ$10.5m from NZ$37.4m. Gross borrowings declined NZ$30.4m to NZ$323.4m, cash doubled to NZ$16.4m, and equity rose 7.3% to NZ$592.2m. The interim dividend was lifted 7.4% to 5.79 cents per share. In segment mix, core Delegat Limited still accounts for ~50% of segment revenue and the bulk of profit (margin ~10.8%), but its share fell ~4.1pp as USA revenue share dropped 4.6pp and Europe gained 2.6pp.
What matters
- Earnings recovery is real but narrow. PBT nearly doubled on half a percent of revenue growth, and the effective tax rate barely moved (29.2% vs 28.2%), so PBT growth of 85.6% is a clean read. Almost all incremental profit sits in the core Delegat Limited segment; the USA segment's revenue fell and margin stayed under 1%.
- Leverage has materially improved. Net debt fell to ~NZ$307.0m from ~NZ$345.6m and net debt/EBITDA eased to ~4.7x from ~5.6x — still high in absolute terms, but the direction is decisive and was partly funded by the step-down in capex.
- Cash conversion weakened. OCF/EBITDA dropped to 95.0% from 122.6%, driven by a ~4.8-day lift in inventory days to 145 days even as receivable days improved ~9.4 days to 61. The FCF headline flatters the underlying operating cash trend.
Expectations
No quantitative FY26 guidance or forward-work target was disclosed in the extracted release. Shape context is important: in FY25, HY25 represented only 31.5% of full-year revenue but 288% of full-year NPAT, meaning H2 FY25 was loss-making. The business is clearly second-half weighted on revenue, and recent experience shows H2 profitability is where the result is ultimately decided. HY26 revenue annualised to ~NZ$359.2m sits well below FY25's NZ$566.8m, consistent with that seasonal pattern rather than implying a step-change in top line. The release supports a cleaner H1 margin and leverage story; it does not by itself support a view on full-year NPAT.
Quality of result
The profit gain looks operationally driven rather than tax- or one-off-assisted: no non-recurring items were identified in the excerpts, and the ETR is broadly stable. However, the cash side is mixed. The NZ$13.6m lift in pre-lease FCF is almost entirely the result of capex falling by ~NZ$26.9m (from 20.9% to 5.9% of revenue) — a capital cycle effect rather than operating improvement. Operating cash conversion below 100% of EBITDA, combined with ongoing inventory build (consistent with a premium wine inventory model but still a working-capital use), means the underlying cash generation is softer than the FCF headline suggests. The leverage reduction is durable to the extent it reflects both repayment and a lower near-term capex run rate.
Unresolved
- Is the sharp step-down in capex a sustained reset or a timing gap after the prior heavy investment cycle, and what is the implied maintenance vs growth split?
- What is driving the USA segment's revenue contraction and sub-1% margin, and is Europe's share gain sustainable at its current ~2.5% margin?
- How should the FY26 H2 shape be interpreted given H2 FY25 was loss-making — was that driven by one-off factors, and have they been addressed?
- With inventory days rising, what is the expected working-capital profile through the vintage cycle into H2?
- Continuing vs discontinued operations are not separately disclosed, and no full non-GAAP reconciliation bridge was provided in the excerpt.
This briefing cannot assess valuation, vintage-specific cost and pricing dynamics, or management's qualitative commentary on demand by market, as those details were not in the supplied extraction.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $179.6m | $178.6m | +0.5% ↑ |
| EBITDA | $65.6m | $61.6m | +6.4% ↑ |
| Net profit after tax | $22.8m | $12.5m | +82.9% ↑ |
| Net cash inflow from operating activities | $62.3m | $75.6m | -17.5% ↓ |
| Interim dividend per share | 579.0c | 539.0c | +7.4% ↑ |
| Operating profit | $41.2m | $26.4m | +55.9% ↑ |
| Profit before tax | $32.2m | $17.4m | +85.6% ↑ |
| Cash and cash equivalents | $16.4m | $8.2m | +100.9% ↑ |
| Total assets | $1.1b | $1.1b | +1.0% ↑ |
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Delegat Limited | $191.3m | $191.2m | $20.7m | -4.1pp |
| Delegat Australia Pty Ltd | $32.7m | $30.2m | $0.48m | +0.0pp |
| Delegat Europe Limited | $62.5m | $48.8m | $1.6m | +2.6pp |
| Delegat USA, Inc. | $79.8m | $90.1m | $0.68m | -4.6pp |
| Other Segments10 | $13.3m | $10.6m | $0.72m | +0.5pp |
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| PBT growth | +85.6% | — | — |
| Effective tax rate | 29.2% | 28.2% | — |
| OCF / EBITDA (cash conversion) | 95.0% | 122.6% | deteriorated |
| FCF pre-lease | $51.8m | $38.2m | +$13.7m |
| FCF / NPAT | 227.2% | 306.0% | complementary conversion metric |
| Capex % revenue | 5.9% | 20.9% | — |
| Capex | $10.5m | $37.4m | −$26.9m |
| Debtor days | 61.0 | 70.4 | -9.4 days |
| Inventory days | 145.0 | 140.2 | +4.8 days |
| Trade debtors | $60.2m | $69.1m | −$9m |
| Net debt | $307m | $345.6m | −$38.6m |
| Net debt / EBITDA | 4.68x | 5.61x | Strengthening |
| Gross borrowings | $323.4m | $353.8m | −$30.4m |
| ROE (annualised) | 7.7% | 4.5% | Strengthening |
| HY25 share of FY25 revenue | 31.5% | — | Other half was 68.5% |
| HY25 share of FY25 NPAT | 287.9% | — | Other half was -187.9% |
| Profit from continuing operations | — | $12.5m | — |
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.