Table of Contents
What changed
Revenue rose 7.8% to NZ$13,189.1m and EBITDA grew 6.5% to NZ$605.6m, but the operating read softened below that: PBT advanced only 2.6% to NZ$383.1m. NPAT was up 7.2% to NZ$271.5m, flattered by the effective tax rate easing from 29.5% to 28.7%. Operating cash flow fell 11.0% to NZ$348.2m despite higher EBITDA. Gross borrowings climbed 26.3% to NZ$1,235.8m, pushing net debt to roughly NZ$1,018.9m and leverage to 1.68x EBITDA from 1.35x. Segment mix was essentially static: Healthcare contributed about 95.6% of revenue (EBITDA margin ~4.3%) and Animal Care about 4.4% (margin ~18.0%). The final dividend rose 7.9% to NZ 61.5cps.
What matters
- PBT growth (+2.6%) is the cleaner operating read than NPAT (+7.2%). The NPAT outperformance is largely a tax-rate effect, not incremental operating leverage. At the EBITDA line, growth (6.5%) also lagged revenue (7.8%), suggesting modest margin compression.
- Cash conversion deteriorated materially. OCF/EBITDA fell from 68.8% to 57.6%, and pre-lease free cash flow dropped to NZ$252.3m from NZ$293.6m even though capex was broadly flat at NZ$95.9m. FCF-to-NPAT slipped from 115.8% to 92.9%.
- Leverage has stepped up to fund growth. Net debt rose by roughly NZ$252m while equity grew only NZ$115m, taking net debt/EBITDA from 1.35x to 1.68x. The dividend is still covered by pre-lease FCF (payout ~46.9%), but the cover has thinned sharply from 37.0%.
Expectations
No quantitative target, backlog, or forward-work disclosure was provided in the extracted material; management referenced "positive guidance" qualitatively. Seasonality was close to even: HY24 was about 49.9% of full-year revenue, 50.0% of EBITDA and 50.1% of NPAT, so there is no obvious second-half uplift embedded. Operating cash flow, however, was materially back-ended (HY24 only 30.3% of full-year OCF), which is consistent with year-end working capital dynamics rather than a structural weighting. On the figures supplied, the release supports continued mid-single-digit top-line growth and a higher dividend, but does not support a claim of improving cash quality or deleveraging.
Quality of result
The earnings progression looks partly timing- and tax-driven rather than cleanly operational. NPAT growth outran PBT because of a lower effective tax rate; underlying EBITDA growth (disclosed as 7.3%) matched revenue more closely, but the statutory EBITDA margin softened. Working capital days improved (receivables 38.8 vs 42.2; inventory 33.5 vs 36.8), so the OCF decline is not obviously driven by stretched working capital on the asset side — the absence of payables disclosure in the extract leaves the liability side of the working-capital bridge unconfirmed. Net debt-funded growth boosted the asset base (+4.8%) and helped deliver a 0.2pp ROE uptick to 11.2%, so part of the reported earnings expansion is balance-sheet-assisted.
Unresolved
- What reconciles underlying EBITDA of NZ$624.3m to statutory NZ$605.6m, and what sits in the underlying/statutory NPAT gap (NZ$303.4m vs NZ$271.5m)?
- Why did OCF fall NZ$43.1m despite improved receivable and inventory days — specifically, how did trade payables and tax paid move?
- What drove the NZ$257.3m increase in gross borrowings: acquisitions, inventory positioning, or capital returns, and what is the ceiling management will tolerate on net debt/EBITDA?
- Healthcare EBITDA grew 6.0% on 8.0% revenue growth — is the margin compression mix, investment spend, or price?
- This briefing cannot assess valuation, share-price reaction, or the credibility of the "positive guidance" statement because no price, market-cap, or quantitative forward target was supplied.
Key metrics
| Metric | FY24 | FY23 | Change |
|---|---|---|---|
| Revenue | $13189.1m | $12237.4m | +7.8% ↑ |
| EBITDA | $605.6m | $568.8m | +6.5% ↑ |
| Net profit after tax | $271.5m | $253.4m | +7.2% ↑ |
| Net cash inflow from operating activities | $348.2m | $391.4m | -11.0% ↓ |
| Final dividend per share | 61.5c | 57.0c | +7.9% ↑ |
| Total assets | $6744.1m | $6437.0m | +4.8% ↑ |
Reference: annolyse.ai/briefings/ebo-fy24
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Healthcare | $12610.0m | $11676.6m | $537.5m | +0.2pp |
| Animal Care | $579.0m | $560.8m | $104.0m | -0.2pp |
| Corporate | — | — | −$35.9m | n/a |
Reference: annolyse.ai/briefings/ebo-fy24
Analytical metrics
| Metric | FY24 | FY23 | Context |
|---|---|---|---|
| PBT growth | +2.6% | — | cleaner earnings measure |
| Effective tax rate | 28.7% | 29.5% | — |
| OCF / EBITDA (cash conversion) | 57.6% | 68.8% | deteriorated |
| FCF pre-lease | $252.3m | $293.6m | −$41.2m |
| FCF / NPAT | 92.9% | 115.8% | complementary conversion metric |
| Capex % revenue | 0.7% | 0.8% | — |
| Capex | $95.9m | $97800.0m | −$97704.1m |
| Debtor days | 38.8 | 42.2 | -3.4 days |
| Inventory days | 33.5 | 36.8 | -3.3 days |
| Trade debtors | $1403.2m | $1414.7m | −$11.5m |
| Net debt | $1018.9m | $766.6m | +$252.3m |
| Net debt / EBITDA | 1.68x | 1.35x | Weakening |
| Gross borrowings | $1235.8m | $978.5m | +$257.3m |
| Payout ratio vs NPAT | 43.5% | — | — |
| Payout ratio vs FCF pre-lease | 46.9% | — | covered |
| ROE (annualised) | 11.2% | 11.0% | Strengthening |
| HY24 share of FY24 revenue | 49.9% | — | Other half was 50.1% |
| HY24 share of FY24 EBITDA | 50.0% | — | Other half was 50.0% |
| HY24 share of FY24 NPAT | 50.1% | — | Other half was 49.9% |
| Profit from continuing operations | — | $253.4m | — |
Reference: annolyse.ai/briefings/ebo-fy24
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.