Table of Contents
What changed
Reported revenue rose 52% to $174.9m from $114.9m, with normalised revenue of $165.3m landing above the $159m–$164m guidance range. EBITDA more than doubled to $45.2m from $21.0m, and EBIT swung to a $1.7m profit from a $7.2m loss. The pre-tax loss narrowed to $5.1m from $10.4m, and the after-tax loss narrowed to $3.0m from $9.6m.
The balance sheet moved the other way. Cash fell to $8.1m from $13.9m, gross borrowings rose to $70.6m from $32.1m, and net debt expanded to roughly $62.5m (about 1.4x EBITDA) from $18.2m (about 0.9x). Trade receivables almost tripled to $22.5m, lifting receivable days to roughly 47 from 24. Segment mix shifted: North America rose to 42% of disclosed segment revenue (from 35%) while New Zealand fell to 48% (from 61%), although New Zealand remains the dominant profit engine at an implied ~64% segment margin.
What matters
- Reported vs continuing-operations divergence. The headline NPAT loss of $3.0m is materially better than the $11.8m loss from continuing operations cited in the release. That $8.8m gap is not itemised in the supplied extract, so the cleaner operating read is the $5.1m PBT loss, not the $3.0m statutory NPAT. The effective tax rate on losses jumped to ~41% from ~8%, reinforcing that NPAT is tax-distorted.
- Leverage stepped up. Net debt roughly tripled to $62.5m while cash fell by $5.8m. Net debt/EBITDA moved from 0.9x to 1.4x even as EBITDA more than doubled, indicating debt funded the gap between operating cash and continued capex.
- Coretex still distorts the like-for-like read. A $9.6m accounting adjustment tied to the merger, plus one-off acquisition revenue and integration costs, sit inside reported figures. Normalised revenue ($165.3m) and normalised EBITDA are the numbers management is steering to; reconciliations in the supplied excerpt are only partial.
Expectations
Management explicitly states FY23 is "in line with guidance," with normalised revenue above the $159m–$164m range. No forward revenue or EBITDA target was supplied in the extraction, so the release supports a guidance-met read but does not anchor FY24 expectations.
On shape, H2 FY23 was modestly stronger than H1 on revenue ($89.5m vs $85.4m) and EBITDA ($24.4m vs $20.8m), but NPAT slipped from a $0.6m profit in H1 to an implied $3.6m loss in H2. Exit-rate momentum on the top line is therefore better than the full-year number, but bottom-line trajectory weakened into year-end.
Quality of result
Mixed, and weaker than the headline suggests.
- Durable: EBITDA uplift is real in dollar terms, normalised revenue beat guidance, and the segment disclosures show North America and Australia scaling profitably while Corporate & Development losses narrowed.
- Timing/working-capital assisted: Operating cash flow rose to $24.1m, but OCF/EBITDA conversion fell to 53% from 68% — cash conversion deteriorated materially. The 23-day extension in receivable days is the clearest driver: trade debtors grew $15.1m on a $60.0m revenue increase, a high marginal absorption.
- Still cash-negative. Capex of $27.5m (15.7% of revenue, down from 24.7%) was below OCF only marginally, leaving simple pre-lease FCF at roughly -$3.4m. Company-defined free cash flow was a $29.9m outflow (vs -$45.1m prior), improved but still substantial, and the gap to the pre-lease figure is not itemised.
- NPAT quality is low. With continuing-operations losses of $11.8m reconciled down to a $3.0m headline loss via an unspecified ~$8.8m benefit plus tax, the statutory bottom line is not the best read on underlying profitability.
Unresolved
- What is the $8.8m bridge between the $11.8m continuing-operations loss and the $3.0m statutory loss? The extract does not separately disclose a discontinued operation or disposal line.
- What composes the gap between simple pre-lease FCF (-$3.4m) and the company-defined FCF (-$29.9m)? Lease payments are the obvious candidate but are not itemised in the supplied data.
- Why did receivables lift so sharply relative to revenue growth, and how much of the receivables build is Coretex-related versus underlying DSO extension?
- No full reconciliation from reported to normalised revenue and EBITDA was supplied, so the size and recurrence of the "one-off" items cannot be verified from this release.
- No FY24 revenue, EBITDA, or leverage target was parsed, and no customer concentration or quantified FX sensitivity was disclosed.
This briefing cannot assess valuation, the durability of normalised margins, or the pace at which net debt will re-rate, because neither market multiples, a full non-GAAP bridge, nor forward guidance is in the supplied data.
Key metrics
| Metric | FY23 | FY22 | Change |
|---|---|---|---|
| Revenue | $0.2m | $114.9m | -99.8% ↓ |
| EBITDA | $0.0m | $21m | -99.8% ↓ |
| Net profit after tax | −$0.0m | −$9.6m | +100.0% ↑ |
| Net cash inflow from operating activities | $0.0m | $14.3m | -99.8% ↓ |
| Operating profit | $0.0m | −$7.2m | +100.0% ↑ |
| Profit before tax | −$0.0m | −$10.4m | +100.0% ↑ |
| Cash and cash equivalents | $0.0m | $13.9m | -99.9% ↓ |
| Total assets | $0.4m | $367.1m | -99.9% ↓ |
Reference: annolyse.ai/briefings/erd-fy23
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Corporate & Development | $62.3m | $32.4m | −$28.5m | +7.4pp |
| North America | $72.6m | $40.3m | $18.1m | +6.5pp |
| New Zealand | $83.7m | $69.8m | $53.7m | -12.9pp |
| Australia | $9.3m | $3.9m | $2.2m | +1.9pp |
Reference: annolyse.ai/briefings/erd-fy23
Analytical metrics
| Metric | FY23 | FY22 | Context |
|---|---|---|---|
| OCF / EBITDA (cash conversion) | 53.3% | 68.1% | deteriorated |
| FCF pre-lease | −$3.4m | −$14.1m | +$10.7m |
| FCF post-lease | −$29.9m | −$45.1m | +$15.2m |
| FCF / NPAT | 996.7% | 469.8% | complementary conversion metric |
| Capex % revenue | 15.7% | 24.7% | — |
| Capex | −$0.0m | −$28400.0m | +$28400.0m |
| Free cash flow | −$0.0m | −$120.3m | +$120.3m |
| Debtor days | 47.0 | 23.5 | +23.5 days |
| Trade debtors | $0.0m | $7.4m | −$7.4m |
| Net debt | $62.5m | $18.2m | +$44.3m |
| Net debt / EBITDA | 1.38x | 0.87x | Weakening |
| Gross borrowings | $0.1m | $32100.0m | −$32099.9m |
| ROE (annualised) | -1.2% | -3.9% | Strengthening |
| HY23 share of FY23 revenue | 48.8% | — | Other half was 51.2% |
| HY23 share of FY23 EBITDA | 46.0% | — | Other half was 54.0% |
| HY23 share of FY23 NPAT | -20.0% | — | Other half was 120.0% |
| Profit from continuing operations | −$0.0m | — | — |
Reference: annolyse.ai/briefings/erd-fy23
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX/ASX 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.