FCF rose to $16.0m but operating cash conversion fell to 72.5%

Capex fell 58.4% to $13.4m (6.9% of revenue, down from 17.7%) as the 4G upgrade program normalised.

On the operating line, revenue rose 6.8% to $194.4m and the group swung to a $1.4m NPAT (FY24: $0.3m loss) and $0.2m PBT (FY24: $7.0m loss). The NPAT line is flattered by a roughly $1.2m net tax credit, so PBT is the cleaner read on operating progress.

Net debt dropped to $11.8m from $22.1m, taking net debt/EBITDA to 0.20x from 0.41x.

FCF rose $14.7m year-on-year, but capex fell $18.8m while OCF fell $9.7m. The post-4G normalised capex run-rate is the more important number for valuing the business than the FY25 print, and management has not provided an FY26 capex guide in the supplied materials.

Operating cash conversion deteriorated despite EBITDA growth. OCF/EBITDA at 72.5% is roughly 27 percentage points below FY24's 99.2%. Receivable days improved modestly to 47.5 from 50.7, so a debtor build alone does not explain the gap — investors need clarity on which working-capital or non-cash items absorbed cash.

North America segment result fell 19.5% on revenue up 1.5%. The second-largest geography saw segment result drop to $17.7m from $22.0m. New Zealand (+13% revenue, +12.5% result) is carrying group performance and rose to 38.3% of revenue from 35.7%. North America margin trajectory is now the key segment question.

Management states it delivered to the top end of, or exceeded, guidance on all key measures, but the specific FY25 guidance bands and any FY26 outlook are not detailed in the supplied excerpts.

HY25 revenue of $95.9m represented 49.3% of the full-year figure, so phasing was broadly even rather than second-half loaded. With the 4G upgrade program rolling off, the absence of an explicit FY26 capex guide is the most material shape variable — any return to elevated capex would unwind much of the FCF improvement that headlined this release.

The capital-structure improvement is genuine and improves financial flexibility regardless of how cash flows trend from here.

Less durable is the FCF print. The 12x year-on-year jump is largely a capex base effect — the $18.8m drop in PP&E investment swamps the $9.7m decline in operating cash flow. Cash conversion of 72.5% versus 99.2% prior implies working-capital or non-cash timing items absorbed cash as EBITDA rose; receivable days fell to 47.5 from 50.7, so debtor movement is not the explanation. NPAT of $1.4m on equity of $331.7m delivers ROE of 0.4%, which means absolute earnings power remains thin relative to the asset base, and that NPAT was supported by a tax credit. The headline FCF figure is best treated as a transition-year outcome rather than a steady-state run rate.

This briefing cannot assess whether the FY25 cash-conversion fall reflects a one-period working-capital or timing effect or a structural change in how revenue translates into operating cash flow.