PBT up 157.4% but inventory days hit an unprecedented 111.4 days

The swing reflects both an operating recovery (continuing-operations profit of $207.0m versus a $365.0m prior loss) and a $29.0m discontinued-operation gain against a $52.0m prior loss, tied to the Construction divestment — so headline growth is not a clean like-for-like comparison.

Reported revenue fell 14.3% to $6b, below Annolyse's historical range (5-period mean -0.6%), largely reflecting the smaller continuing-operations base after divestment rather than organic demand loss.

Inventory days reached 111.4 days, an unprecedented high against the historical average of 81.6 days, while debtor days rose to 50.6 days, at the upper edge of the 37.3-day average.

Inventory days of 111.4 sit well above the historical average of 81.6 days, and debtor days of 50.6 are above the 37.3-day average, even though the net operating working-capital movement of $138.0m remains within the normal historical range. This matters because rising stock and receivables against a shrinking revenue base can foreshadow future cash drag even where the current-period cash outcome looks strong.

Cash conversion looks strong but the comparison basis is compromised. OCF/EBITDA of 103.8% sits above the historical mean of 62.2%, and operating cash flow rose 42.7% to $715.0m. However, the prior-period ratio is denominator-distorted by FY25's near-zero EBITDA base, so the improvement cannot be read as a clean like-for-like durability signal.

Deleveraging is real but partly proceeds-driven. Net debt fell from $999.0m to $637.0m and gross borrowings dropped 32.7% to $789.0m, following the Construction divestment. This strengthens flexibility but is not purely organic cash generation, and the full-year dividend was cut to 0 cents from 16 cents, signalling capital preservation during the transition.

The half-year to full-year shape shows a swing from a $11.0m first-half loss to full-year NPAT of $228.0m, implying a second-half profit of roughly $239.0m — a substantial second-half weighting that the release does not fully explain with disclosed forward-work or order-book detail.

Without that detail, the release supports a narrative of portfolio simplification and balance-sheet repair, but not yet a demonstrated run-rate for underlying segment profitability.

Cash conversion of 103.8% is favourable, but the prior-period ratio is not usable as a clean baseline, so the scale of "improvement" is uncertain.

The unprecedented inventory-day build (111.4 versus an 81.6-day average) and elevated debtor days (50.6 versus 37.3) suggest working-capital efficiency has weakened even as headline cash flow strengthened, which weighs against reading the cash result as fully structural.

This briefing cannot assess the sustainability of segment-level margins or forward order-book strength, as no forward-work or targets were disclosed.