FPH PBT up 46.8% as capex normalisation swings FCF positive

Annolyse's historical baseline shows all three growth rates as above the normal range: revenue against a 3-period mean of 2.5% (range -23.3% to 16.4%), PBT against a mean of -0.5%, and NPAT against a mean of -2.0%. Operating profit of NZ$218.1m rose 42.9%, and PBT margin at 21.7% sits inside the supplied historical band of 16.6%-26.1%.

Pre-lease free cash flow swung from -NZ$127.5m to +NZ$169.4m, the upper edge of the supplied historical range (3-period mean NZ$34.9m). That swing reflects operating cash inflow of NZ$233.0m (up 48.9%) combined with capex falling 80% from NZ$275.5m to NZ$55.1m. Gross borrowings fell 72.6% to NZ$66.6m, taking FPH from NZ$172.7m of net debt into a net cash position of approximately NZ$50.0m.

• Revenue growth of 18.4% is 15.9 percentage points above the 3-period mean and exceeds the prior peak of 16.4% in the supplied window. Coupled with PBT growth of 46.8%, the result indicates meaningful operating leverage: PBT margin moved to 21.7% from 17.5%, even as the effective tax rate rose to 25.8% from 23.7%.
• The cash and leverage transformation is largely a capex-cycle effect. Capex/revenue dropped from 34.3% to 5.8%, which is the dominant driver of the NZ$296.9m pre-lease FCF swing. The prior comparable was distorted by elevated property and plant spend, so the current FCF figure should not be read as a steady-state run rate.
• Capital allocation is more conservative than headline FCF suggests. The interim dividend rose only 2.8% to 18.5 cents per share, taking the payout to 70.6% of NPAT versus 97.3% prior - the lower edge of the supplied historical range (mean 85.0%). Management is retaining a larger share of earnings even as cover from FCF improved sharply.

In FY24, HY24 represented 50.8% of full-year revenue and 42.9% of full-year NPAT, indicating a second-half-weighted earnings profile. If that shape holds, the HY25 base annualises to NZ$1.9b revenue, and 2H NPAT would be expected to exceed 1H.

The current release does support a step-change in the revenue trajectory and a normalised capex base, but it does not confirm whether 1H demand strength was front-loaded or sustainable. The supplied excerpts reference an updated full-year outlook but do not quantify it, which leaves forward shape uncertain.

PBT is therefore the cleaner read, and it confirms that the headline NPAT lift is operating, not tax-aided.

Cash quality is more nuanced. Operating cash flow growth of 48.9% outpaced PBT growth, helped by working capital easing - inventory days fell to 63.7 from 81.5 (lower edge of the supplied historical range), unwinding NZ$27.4m of inventory. Debtor days at 40.7 are also at the lower edge of the historical range. These working-capital tailwinds support the period but are unlikely to repeat at the same magnitude. The NZ$220.4m year-on-year capex reduction is the single largest item flattering FCF/NPAT to 110.6%, and that ratio will compress as capex normalises further. ROE at 7.9% remains at the lower edge of the supplied 6.5%-12.2% range despite the earnings rebound, reflecting the equity build (total equity up 10.2%).

This briefing cannot assess segment-level revenue or margin trends for HY25, as current-period Hospital and Homecare splits are not present in the supplied data.