Table of Contents
What changed
Revenue rose 4.7% to $8,498.0m and profit before tax rose 38.1% to $598.0m, with NPAT up 41.6% to $432.0m on a broadly stable effective tax rate (26.6% vs 26.8%). Operating margins clearly expanded: operating profit grew 29.8% on single-digit revenue growth.
The cash picture moved the opposite way. Net cash from operating activities fell 33.4% to $592.0m (from $889.0m), capex almost doubled to $399.0m (from $231.0m), and pre-lease free cash flow collapsed to $193.0m from $658.0m. Cash on hand fell to $351.0m from $666.0m while gross borrowings rose to $1,040.0m from $857.0m, taking net debt from $191.0m to $689.0m. Total equity was essentially flat at $3,765.0m. The final dividend was lifted to 22.0 cps from 18.0 cps.
What matters
- Earnings quality looks real at the P&L line but not at the cash line. PBT growth of 38.1% and NPAT growth of 41.6% are closely aligned (tax rate stable), so the P&L improvement is not a tax artefact. But operating cash conversion against NPAT deteriorated sharply: pre-lease FCF covered just 44.7% of NPAT in FY22, versus 215.7% in FY21.
- Working capital absorbed a large amount of cash. Inventories rose 23.4% to $1,799.0m, lifting inventory days from 65.5 to 77.3. Trade debtor days were broadly flat at 36.3. On disclosed items alone, operating working capital is up $356.0m year on year, which is most of the operating cash shortfall.
- Leverage direction is unambiguously weaker. Net debt rose by roughly $498.0m in a single year, and capex intensity stepped up from 2.8% of revenue to 4.7%. The dividend was raised even though pre-lease FCF covered only 91.9% of dividends paid, versus 22.6% cover last year.
Expectations
No quantitative earnings or forward-work guidance was disclosed in the extracted material, and no stated targets were provided. On shape, HY22 contributed 47.8% of full-year revenue and 39.6% of full-year NPAT, implying a stronger second half ($4,434.0m revenue, $261.0m NPAT). The release does support the claim of margin expansion and of a second-half-weighted earnings profile; it does not support any inference about FY23 because neither order book nor guidance is in the extracted data.
Quality of result
The earnings improvement itself looks durable — margin expansion on modestly higher revenue with no tax benefit — but the conversion into cash does not. The $297.0m fall in operating cash flow is largely explained by a $341.0m inventory build, which is a timing/working-capital event rather than a P&L problem, but it is still balance-sheet-funded: gross borrowings up $183.0m and cash down $315.0m. The dividend increase from 18.0 cps to 22.0 cps sits against pre-lease FCF that barely covers it, so the shareholder return is being supported by a materially more stretched balance sheet, not by stronger cash generation. Significant items are referenced in the release but not quantified in the extraction, which limits the ability to test the underlying run-rate.
Unresolved
- What drove the 23.4% inventory build — demand positioning, supply-chain stocking, or slower stock turn — and how much is expected to unwind in FY23?
- What do the referenced "significant items" total, and how do they reconcile reported earnings to an underlying measure? EBITDA and net debt/EBITDA are not disclosed in the extraction.
- What is the step-up in capex funding: is $399.0m a new run-rate or project-driven, and what is the expected return profile?
- Segment mix, forward work/order book, and any FY23 guidance are not in the extracted material, so the sustainability of the margin gain cannot be tested.
This briefing cannot assess segment-level performance, underlying versus reported earnings bridges, or any forward guidance, as none of these were present in the supplied data.
Key metrics
| Metric | FY22 | FY21 | Change |
|---|---|---|---|
| Revenue | $8498m | $8120m | +4.7% ↑ |
| Net profit after tax | $432m | $305m | +41.6% ↑ |
| Net cash inflow from operating activities | $592m | $889m | -33.4% ↓ |
| Final dividend per share | 22.0c | 18.0c | +22.2% ↑ |
| Operating profit | $702m | $541m | +29.8% ↑ |
| Profit before tax | $598m | $433m | +38.1% ↑ |
| Cash and cash equivalents | $351m | $666m | -47.3% ↓ |
| Total assets | $8421m | $8010m | +5.1% ↑ |
Reference: annolyse.ai/briefings/fbu-fy22
Analytical metrics
| Metric | FY22 | FY21 | Context |
|---|---|---|---|
| PBT growth | +38.1% | — | — |
| Effective tax rate | 26.6% | 26.8% | — |
| FCF pre-lease | $193.0m | $658.0m | −$465.0m |
| FCF / NPAT | 44.7% | 215.7% | complementary conversion metric |
| Capex % revenue | 4.7% | 2.8% | — |
| Capex | −$399.0m | $231.0m | −$630.0m |
| Debtor days | 36.3 | 37.3 | -1.0 days |
| Inventory days | 77.3 | 65.5 | +11.8 days |
| Operating working capital | $2643.0m | $2287.0m | +$356.0m absorbed |
| Trade debtors | $844.0m | $829.0m | +$15.0m |
| Net debt | $689.0m | $191.0m | +$498.0m |
| Gross borrowings | $1040.0m | $857.0m | +$183.0m |
| Payout ratio vs NPAT | 41.1% | — | — |
| Payout ratio vs FCF pre-lease | 91.9% | — | covered |
| ROE (annualised) | 11.5% | 8.1% | Strengthening |
| HY22 share of FY22 revenue | 47.8% | — | Other half was 52.2% |
| HY22 share of FY22 NPAT | 39.6% | — | Other half was 60.4% |
| Profit from continuing operations | $439.0m | $317.0m | +$122.0m |
Reference: annolyse.ai/briefings/fbu-fy22
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.