Table of Contents
What changed
Revenue rose 3.9% to $523.8m and operating profit (EBIT) jumped 21.8% to $38.7m, with PBT up 28.6% to $28.8m and NPAT up 35.9% to $16.0m. Operating cash flow lifted 14.5% to $52.6m while capex eased to $5.8m, taking pre-lease free cash flow to $46.8m from $38.6m. The balance sheet moved decisively: gross borrowings fell 30.1% to $24.4m and cash rose to $26.2m, flipping the group from $11.5m of net debt to approximately $1.8m of net cash. Segment mix shifted modestly toward the higher-margin Medical Services line, which grew revenue 9.4% to $153.4m with segment result up to $19.5m, versus Pharmacy Services revenue up 1.9% to $370.4m. The declared final dividend of 2.75cps is up 37.5% on the prior final of 2.0cps.
What matters
- Mix is doing the heavy lifting on margin. Medical Services grew faster than Pharmacy Services and carries an inferred segment margin of roughly 12.7% versus about 5.8% for Pharmacy. With Pharmacy same-store retail sales down 9%, the group-level EBIT uplift is being driven by a better segment mix and Medical Services margin expansion rather than a broad-based recovery in the core pharmacy footprint.
- Leverage direction is now clearly positive. Gross borrowings were cut by $10.5m and the group moved into a small net cash position. Equity rose to $181.0m against broadly flat total assets of $386.2m, consistent with retained earnings doing the work rather than any balance-sheet expansion.
- PBT, not NPAT, is the cleaner read. The 35.9% NPAT growth is flattered by a lower effective tax rate (28.1% vs 29.4%) and the absence of the prior-year $0.3m discontinued-operation loss. PBT growth of 28.6% still looks strong but is the more honest comparison.
Expectations
No forward-work pipeline, revenue target or multi-year guidance was disclosed in the supplied excerpts, so the result cannot be benchmarked against stated management ambition. On shape, HY25 represented only 35.3% of FY25 NPAT and 49.6% of revenue, confirming a meaningfully second-half-weighted earnings profile; readers should not straight-line H1 trends into FY26. The release supports a narrative of deleveraging and improving Medical Services economics but does not, on the supplied text, commit the group to a quantified trajectory for either.
Quality of result
The result looks largely durable but has some tailwinds. Operating cash flow of $52.6m comfortably exceeds NPAT at about 3.3x, and free cash flow pre-lease of $46.8m covers the dividend many times over (pre-lease payout ratio circa 8.4%). That said, NPAT grew faster than operating cash flow, so cash conversion versus earnings softened relative to last year. Trade receivable days fell sharply to 5.0 from 8.0, providing a working-capital tailwind to reported operating cash, while inventory days rose modestly to 23.1. Capex at 1.1% of revenue (vs 1.5%) is low and contributed to the FCF step-up — a lever that can reverse. Lease payments were not broken out in the supplied data, so post-lease free cash flow and a full cash conversion picture cannot be verified here.
Unresolved
- What is driving the 9% same-store retail decline in Pharmacy, and is it stabilising or still deteriorating into FY26?
- How much of the Medical Services margin expansion is structural (Care & Advice Health Hub, scale) versus cyclical or mix-within-segment?
- What is the post-lease free cash flow picture, given lease liabilities typically sit behind a retail/healthcare footprint of this size?
- Was the sharp fall in trade receivables a timing effect at balance date or a genuine step-change in collections?
- With the group now in net cash, what is the stated capital-allocation priority — buybacks, M&A, a higher ordinary payout, or continued debt reduction?
This briefing cannot assess store-level operating KPIs, lease-adjusted leverage, or management's unstated FY26 expectations, as none of those were disclosed in the supplied material.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $523.8m | $503.9m | +3.9% ↑ |
| Net profit after tax | $16.0m | $11.8m | +35.9% ↑ |
| Net cash inflow from operating activities | $52.6m | $46.0m | +14.5% ↑ |
| Final dividend per share | 2.8c | 2.0c | +37.5% ↑ |
| Operating profit | $38.7m | $31.8m | +21.8% ↑ |
| Profit before tax | $28.8m | $22.4m | +28.6% ↑ |
| Cash and cash equivalents | $26.2m | $23.4m | +12.0% ↑ |
| Total assets | $386.2m | $383.3m | +0.8% ↑ |
Reference: annolyse.ai/briefings/gxh-fy25
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Pharmacy Services | $370.4m | $363.6m | $21.5m | -1.4pp |
| Medical Services | $153.4m | $140.3m | $19.5m | +1.4pp |
Reference: annolyse.ai/briefings/gxh-fy25
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | +28.6% | — | cleaner earnings measure |
| Effective tax rate | 28.1% | 29.4% | — |
| FCF pre-lease | $46.8m | $38.6m | +$8.2m |
| FCF / NPAT | 292.9% | 328.0% | complementary conversion metric |
| Capex % revenue | 1.1% | 1.5% | — |
| Capex | −$5.8m | −$7.4m | +$1.6m |
| Debtor days | 5.0 | 8.0 | -3.0 days |
| Inventory days | 23.1 | 22.1 | +1.1 days |
| Trade debtors | $7.1m | $11.0m | −$3.9m |
| Net debt | −$1.8m | $11.5m | −$13.3m |
| Gross borrowings | $24.4m | $34.9m | −$10.5m |
| Payout ratio vs NPAT | 24.7% | — | — |
| Payout ratio vs FCF pre-lease | 8.4% | — | covered |
| ROE (annualised) | 8.8% | 7.1% | Strengthening |
| HY25 share of FY25 revenue | 49.6% | — | Other half was 50.4% |
| HY25 share of FY25 NPAT | 35.3% | — | Other half was 64.7% |
| Profit from continuing operations | $20.7m | $15.8m | +$4.9m |
| Discontinued operation after tax | $0.0m | −$0.3m | +$0.3m |
Reference: annolyse.ai/briefings/gxh-fy25
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX 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.