Table of Contents
What changed
Revenue grew a modest 1.8% to $264.4m, with operating profit (EBIT) up 8.7% to $17.5m and PBT up 13.7% to $12.6m. NPAT attributable to shareholders rose 27.2% to $7.2m, but profit for the period before minorities rose only from $8.1m to $9.1m, so much of the headline NPAT uplift reflects a smaller minority share rather than stronger underlying earnings. Segment mix shifted: Medical services revenue grew to $82.7m from $77.7m and segment result rose to $11.6m from $8.2m, while Pharmacy services revenue slipped to $181.7m from $182.2m and segment result fell to $7.7m from $8.9m. Operating cash flow fell 14.6% to $21.6m, capex rose to $6.0m from $2.2m, and gross borrowings fell 25.8% to $25.6m, taking implied net debt to around $2.0m from $5.7m. Interim dividend was lifted 20% to 3.0 cps.
What matters
- Mix is doing the work. Medical services (now 31.3% of revenue versus 29.9%) is the higher-margin business at roughly 14.1% segment margin, and contributed essentially all of the group's earnings lift. Pharmacy, still 68.7% of revenue, saw its segment result decline on flat revenue, leaving margin around 4.2%.
- PBT is the cleaner read, not NPAT. Effective tax rates were broadly stable at ~28% versus ~27%, so the NPAT/PBT growth gap of 13.5pp is not tax-driven. It is the minority interest line, with non-controlling interests taking less of group profit than last year. Underlying operating momentum is closer to the 8.7% EBIT and 13.7% PBT prints than to the 27.2% NPAT headline.
- Balance sheet strengthened while cash generation softened. Gross borrowings fell $8.9m and equity rose to $180.0m, yet operating cash flow declined $3.7m and pre-lease free cash flow fell to $15.6m from $23.1m. The dividend remains well covered (payout at ~27.6% of pre-lease FCF, up from ~15.6%), but the cash-versus-earnings trajectory is diverging.
Expectations
No formal guidance or forward-work metric was provided. The only shape context is FY25, in which HY25 delivered 49.6% of full-year revenue but only 35.3% of full-year NPAT, implying H2 is materially more profit-weighted. Annualised HY26 revenue of $528.9m is only marginally above FY25 revenue of $523.8m, so the release supports a steady top-line run-rate rather than an inflection. Whether the second half can again deliver the step-up in profit seen in FY25 is not addressable from this filing.
Quality of result
The earnings improvement is genuine at the operating level – Medical services delivered a meaningful segment result uplift and EBIT/PBT growth sits comfortably above revenue growth – but the quality of the result is mixed. The NPAT headline is flattered by minority interest mechanics. Operational working capital was essentially flat ($45.9m), so the OCF decline is not a receivables or inventory build story; it points to other movements (tax, interest, or payables, which were not itemised). Cash conversion clearly deteriorated: OCF fell even as PBT rose, and capex nearly tripled, cutting pre-lease FCF by roughly a third. Leverage improvement came despite weaker cash, suggesting borrowings may have been run down using opening cash balances (cash fell $5.2m year-on-year).
Unresolved
- What drove the $3.7m fall in operating cash flow when working capital was flat and PBT was higher?
- Is the step-up in capex to 2.3% of revenue (from 0.8%) a one-off investment cycle or a new run-rate, and which segment is absorbing it?
- Why did Pharmacy services segment result fall despite broadly flat revenue, and is same-store retail weakness (disclosed at FY25 as −9%) still pressuring the base?
- What is the minority interest structure and how durable is the lower minority share that amplified NPAT growth?
- No EBITDA, no net-debt-to-EBITDA, and no forward-work or earnings guidance were disclosed.
This briefing cannot assess valuation, segment-level margin trajectories beyond the current snapshot, or whether the H2-weighted FY25 profit shape will repeat in FY26.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $264.4m | $259.9m | +1.8% ↑ |
| Net profit after tax | $7.2m | $5.6m | +27.2% ↑ |
| Net cash inflow from operating activities | $21.6m | $25.3m | -14.6% ↓ |
| Interim dividend per share | 3.0c | 2.5c | +20.0% ↑ |
| Profit before tax | $12.6m | $11.1m | +13.7% ↑ |
| Cash and cash equivalents | $23.7m | $28.9m | -18.0% ↓ |
| Total assets | $392.9m | $392.3m | +0.2% ↑ |
Reference: annolyse.ai/briefings/gxh-hy26
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Pharmacy services | $181.7m | $182.2m | $7.7m | -1.4pp |
| Medical services | $82.7m | $77.7m | $11.6m | +1.4pp |
Reference: annolyse.ai/briefings/gxh-hy26
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| PBT growth | +13.7% | — | — |
| Effective tax rate | 28.0% | 27.2% | — |
| FCF pre-lease | $15.6m | $23.1m | −$7.4m |
| FCF / NPAT | 217.5% | 408.7% | complementary conversion metric |
| Capex % revenue | 2.3% | 0.8% | — |
| Capex | −$6.0m | −$2.2m | −$3.8m |
| Debtor days | 8.2 | 9.0 | -0.8 days |
| Inventory days | 23.4 | 23.2 | +0.3 days |
| Operating working capital | $45.9m | $45.9m | +$0.0m absorbed |
| Trade debtors | $11.8m | $12.8m | −$1.0m |
| Net debt | $2.0m | $5.7m | −$3.7m |
| Gross borrowings | $25.6m | $34.5m | −$8.9m |
| Payout ratio vs NPAT | 60.0% | — | — |
| Payout ratio vs FCF pre-lease | 27.6% | — | covered |
| ROE (annualised) | 4.1% | 3.2% | Strengthening |
| HY25 share of FY25 revenue | 49.6% | — | Other half was 50.4% |
| HY25 share of FY25 NPAT | 35.4% | — | Other half was 64.6% |
| Profit from continuing operations | — | $8.1m | — |
Reference: annolyse.ai/briefings/gxh-hy26
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.