PBT grew 12.1% on 8.1% revenue with cash reserves at $58.3m

NPAT climbed 14.5% to $39.5m, helped by an effective tax rate of 32.4% versus 33.8% prior. Operating cash flow rose only 3.9% to $88.6m, lagging earnings growth, while cash reserves built 27% to $58.3m as capex held near $15.8m (3.4% of revenue).

Inventory rose 13.8% to $31.3m, faster than the 8.1% revenue increase. The board declared a 30.5cps final dividend, taking full-year distributions to 55.0cps, which lifts the payout ratio versus NPAT to 83.1% from 45.8% a year earlier.

PBT growth of 12.1% on 8.1% revenue points to margin expansion across the year. However, H1 NPAT of $21.2m means implied H2 NPAT was only $18.3m, a step down half-on-half. The HY25 release flagged a 50bp gross margin decline (58.4% versus 58.9%) tied to the New Zealand trading environment and a stronger USD on purchasing costs, so the H2 read needs scrutiny.

Payout ratio nearly doubled. Full-year dividends at 55.0cps now consume 83.1% of NPAT versus 45.8% prior. Because pre-lease free cash flow of $72.8m is still 184.4% of NPAT, the dividend remains covered at 41.8% of FCF pre-lease. The step-up is a real change in distribution intensity rather than a stretch on cash, but it leaves less retained earnings cushion.

Cash conversion lagged earnings. Operating cash flow rose 3.9% while NPAT rose 14.5%, with a $3.7m increase in operating working capital absorbing cash as inventory built ahead of sales. The absolute conversion level remains strong, but the gap means reported earnings growth is not fully matched in cash.

Against the company's own near-term commentary, the result lands at the top of the $57.5m–$58.5m PBT range flagged at the September pre-close. The HY25 NPAT guidance of $21.0m–$21.3m was also met at $21.2m.

The shape data implies H1 carried 53.7% of NPAT and 51% of revenue, so the H2 contribution was weaker on a sales-to-profit basis than H1. With no FY26 guidance or stated target, the briefing cannot anchor expectations beyond the trading shape this release establishes.

The result is still cash-backed: FCF pre-lease of $72.8m at 184.4% of NPAT is strong in absolute terms, and ROE strengthened to 35.3% from 33.4%. The cash balance built $12.4m even after funding higher dividends.

The softer parts are the cash conversion gap and a 13.8% inventory increase that outpaced sales, lifting inventory days about 1.2 days. For an apparel retailer this is within normal seasonal range but worth watching for clearance risk if H2 trading momentum did not recover. FX exposure on USD-denominated purchasing remains a flagged sensitivity. Segment-level disclosure for the current year is not in the supplied extraction, so the durability of Glassons Australia's contribution (50.1% of prior-year revenue) cannot be confirmed.

This briefing cannot assess current-year segment economics, gross margin direction, or store-network and online channel mix because those disclosures are not in the supplied extraction.