Cash conversion collapsed to 15.4% as working capital absorbed $348m

Free cash flow was negative $24.0m, while working capital absorbed roughly $348m, with trade debtors up 17.3% to $1.7b against revenue growth of 13.0%.

Revenue rose 13.0% to $6.8b and reported EBITDA rose 9.7% to $302.7m. Profit before tax grew 4.4% to $162.7m, while NPAT grew 12.9% to $124.8m, lifted by a fall in the effective tax rate to 22.2% from 28.3%. The interim dividend was held at 57.0 cps.

Gross borrowings rose to $1.4b and net debt to $1.1b, but net debt/EBITDA edged down to 3.7x from 3.9x on the trailing earnings base.

OCF/EBITDA of 15.4% versus 68.8% a year ago, and FCF of -$24.0m, mean reported earnings were not converted into cash this half. This matters because the maintained dividend of 57.0 cps was 93.3% of NPAT but -485.2% of pre-lease FCF, so capital returns this half were funded from the balance sheet rather than from operating performance.

The headline NPAT is tax-flattered; PBT is the cleaner read. PBT grew 4.4% while NPAT grew 12.9%, an 8.5 percentage-point gap driven by the effective tax rate dropping 6.1pp. Operating earnings are growing well below the rate the bottom line implies, and the 4.4% PBT growth sits well below the 13.0% revenue line.

Working capital is the swing factor. Receivable days rose to 45.0 from 43.3 and operating working capital expanded by around $348m, more than the entire prior-year half's OCF. Unless this unwinds in H2, leverage discipline and dividend cover both depend on it.

The supplied seasonal pattern shows HY25 delivered 48.8% of FY25 revenue, 49.6% of EBITDA and 51.4% of NPAT, and operating cash flow was historically more H2-weighted (HY25 represented 45.4% of FY25 OCF). That shape is consistent with management's H2 framing on earnings, but it does not by itself rescue the cash gap.

Underlying EBITDA was disclosed at $300m, up 3.2% — well below the 9.7% reported EBITDA growth — which sets a more modest organic baseline against which the reaffirmed guidance and "H2 uplift" claim should be judged.

NPAT growth of 12.9% reflects a step-down in the effective tax rate to 22.2%, not operating leverage; on the cleaner PBT basis growth was 4.4%, less than a third of revenue growth. Reported EBITDA grew 9.7% but Underlying EBITDA grew only 3.2%, indicating non-underlying items are a meaningful contributor to the reported growth rate.

On the cash side, capex rose 26.7% to $70.6m (1.0% of revenue), but the dominant pressure was working capital. With OCF of $46.6m against EBITDA of $302.7m, around $256m of EBITDA did not arrive as operating cash this half. Whether this is timing-driven (debtor build into period-end, seasonal stocking) or a structural step-up in working capital intensity is the central durability question for the result.

This briefing cannot assess customer-level receivables ageing, the split of the working capital build between volume, mix and timing, or any segment-level cash conversion behind the group OCF figure.