PBT swung to $65m profit but inventory days reached 122.5

Operating cash flow rose from -$5m to +$156m, so pre-lease free cash flow turned positive at $6m versus -$162m, well above the historical baseline mean of -$231.2m.

Headline revenue of $2.9b prints -20.0% below HY25 ($3.6b), but the release flags revenue from continuing operations as 0.5% above HY25. The divergence reflects the Construction divestment now classified as a discontinued operation across HY26, HY25 and FY25. NPAT improved 91.8% to -$11m, still negative because of a $56m discontinued-operations loss.

EBIT before significant items was $145m and PBT was $65m. An effective tax rate of -26.2% (an unprecedented low versus the historical mean of 25.0%) produced a tax credit that lifted continuing-operations profit to $48m. PBT, not NPAT, is the cleaner read on operating progress, which means underlying recovery is real but smaller than the after-tax numbers imply.

Inventory days expanded to 122.5, sitting 40 days above the historical mean of 82.5. Receivable days also rose to 44.5 from 31.4. With trade debtors at $700m and inventories of $1.9b, working-capital intensity has increased even as headline cash flow improved. This matters because absorbing stock at this level constrains the path back to the stated $400m-$900m net-debt range.

The Construction divestment is the binary that frames every line. The -20.0% revenue print, the 5.1% EBIT margin "consistent with pcp" claim, and the $56m discontinued-operations loss cannot be read as a clean like-for-like comparison without separating residual operations from disposals.

Shape context shows HY25 carried 51.2% of FY25 revenue but only 32% of the -$419m FY25 NPAT, indicating second-half-weighted losses in the prior year. HY26 OCF of $156m compares with FY25's full-year $501m (implied 2H25 of $506m), so the year-on-year improvement is genuine but not yet at the run-rate needed to close the gap to dividend resumption.

Net debt of $1.2b sits materially above the upper bound of the $400m-$900m policy range that gates dividends. The release does not state a timeline for reaching that band, which means dividend re-rating remains a function of further asset sales and working-capital release rather than a disclosed plan.

The improvement, however, leans on a $7m capex reduction (capex 5.2% of revenue, down 4.5% year-on-year) and a tax credit that converted a small continuing-operations result into a $48m profit. Strip the tax effect and underlying continuing-operations earnings are closer to flat against a recast prior period.

The working-capital signal is the offset on quality. Inventory days at 122.5 versus the 82.5 historical mean indicate stock built faster than throughput, and the 13-day extension in receivable days suggests collections are slowing too. If this reverses in 2H26 it releases cash; if it persists it pulls forward refinancing pressure given net debt at 3.5x EBITDA. The PBT recovery is the clearest durable signal in the result; the tax line and capex underspend are not.

This briefing cannot assess the durability of operating improvement without segment-level prior-period comparatives or a stated FY26 EBITDA bridge.