Cash conversion fell to 58.3% even as PBT jumped 75.1%

This is the most material shift in the result because it means earnings growth is not translating into cash at the historical rate.

Revenue rose 28.9% to $1.8b, EBITDAF rose 7.1% to $216.5m, PBT rose 75.1% to $93.7m and NPAT rose 83.6% to $70.3m. Operating cash flow fell 40.1% to $126.3m from $210.8m, capex nearly doubled to $65.5m from $33.3m, and net debt/EBITDA rose to 6.60x from 6.4x, above the historical average of 5.13x. Gross margin percentage declined to 23.2% from 28.1%.

Working-capital movement of $29.5m sits at the upper edge of the historical range and is $159.4m above the historical average build, while capex nearly doubled to $65.5m (3.7% of revenue). Together these absorbed cash that earnings growth alone would otherwise have generated, so the strong headline profit figures overstate near-term cash generation.

Tax movement flatters NPAT relative to PBT. The effective tax rate fell to 25.0% from 28.4%, which is why NPAT growth of 83.6% outpaces PBT growth of 75.1% by 8.5 percentage points. PBT is the cleaner read of underlying operating improvement, and the tax rate move should be treated as a distortion rather than an operating gain.

Leverage is drifting higher. Net debt/EBITDA of 6.60x is above both the prior half's 6.4x and the historical average of 5.13x, funded partly by an 11.7% rise in gross borrowings to $1.5b. This reduces balance-sheet flexibility just as capex intensity is rising, which matters for future funding choices around growth investment and distributions.

The available seasonal context shows the prior comparable half (HY24) contributed only 29.2% of FY24's NPAT, versus 44.8% of revenue and 49.6% of EBITDAF, indicating this business is historically second-half weighted for profit. This means the current half's NPAT growth should not be extrapolated in a straight line to a full-year outcome, and the release does not itself provide the second-half detail needed to confirm the usual seasonal pattern will repeat this year.

Free cash flow of $46.0m is well below the historical average of $191.7m, and cash conversion at 58.3% is outside the normal historical band rather than a modest dip. Capex nearly doubling and a working-capital build both point to cash being consumed by growth investment and short-term timing rather than released back to the balance sheet.

Cash on hand rose to $102.0m from $69.5m, but this was supported by higher borrowings rather than purely operating generation, so the improved cash balance should not be read as evidence of stronger self-funded cash generation. Overall, the earnings improvement looks real at the PBT level, but the cash-flow and leverage trends suggest the quality of that improvement is weaker than the profit growth rate alone implies.

This briefing cannot assess whether the current cash-conversion and leverage trends will reverse in the second half, because no forward guidance or second-half detail is disclosed in this release.