PBT up 55.4% but operating profit fell 47.9% on portfolio reshape

The divergence reflects a materially reshaped portfolio rather than like-for-like trading: total assets expanded 58.1% to NZ$16.1b, well above Annolyse's historical baseline (mean NZ$6.5b), and gross borrowings rose 79.2% to NZ$5.7b. The current and prior periods both carry acquisition and discontinued-operation overlays, so headline growth rates should not be read as organic.

NPAT grew 32.8% to NZ$854.0m, lagging PBT growth by 22.6 percentage points. Operating cash flow swung from NZ$8.8m to NZ$457.8m, while cash on hand fell from NZ$774.5m to NZ$236.2m. The final dividend was lifted to 13.0 cps from 12.5 cps, taking full-year dividends to 20.0 cps versus 19.25 cps.

Capital raise is explicitly linked in the filing to balance-sheet leverage, with NZ$600m capital raised.

Capital raise adds balance-sheet context, with NZ$600m capital raised, but borrowings and gearing are the direct leverage evidence.

• Operating profit dropped 47.9% even as PBT rose 55.4%, meaning the headline earnings improvement is driven by items below the operating line — likely revaluations, fair-value gains, or accounting on the stepped-up stake in One NZ — rather than by underlying trading. For an investor, this means the reported PBT growth rate overstates the run-rate earnings power of the portfolio.

• Leverage stepped up sharply. Gross borrowings rose NZ$2.5b to NZ$5.7b and cash fell NZ$538.3m, with implied net debt roughly doubling. Total assets are above Annolyse's historical range, consistent with debt-funded portfolio expansion. This matters because incremental interest cost will compete with operating cash flow before any distribution to equity.

• Segment concentration shifted. One NZ contributes the dominant revenue share (around two-thirds) at a disclosed ~30% segment margin, while CDC delivers a much higher ~76% margin on a smaller revenue base. The mix means group revenue growth is now anchored in a lower-margin telco asset, while the higher-quality data-centre earnings stream remains the marginal value driver.

Management commentary references a record 200MW of new data-centre capacity and continued sector demand, which is directionally supportive but does not substitute for a target.

The half-year shape is distorted: HY24 NPAT of NZ$1.2b exceeded the full-year NZ$854.0m, implying a NZ$320.9m second-half loss after the first-half One NZ step-up gain unwound or normalised. Revenue, by contrast, was second-half weighted (57% in H2). The release therefore does not support clean trend extrapolation into FY25 on earnings.

PBT growth of 55.4% benefits from a 0.0% effective tax rate in both periods — at the upper edge of Annolyse's historical range and 9.3 points above the historical mean — so tax is not the distortion; the distortion sits between operating profit and PBT, where non-operating gains lifted the result. PBT margin of 31.3% is above the historical range, but on a transformed asset base, limiting comparability.

Cash quality improved on an absolute basis but remains thin relative to reported earnings. Operating cash flow of NZ$457.8m covers only 53.6% of NPAT, and pre-lease free cash flow of NZ$21.3m equates to just 2.5% of NPAT. Receivable days fell from 33.2 to 7.7, flattering operating cash flow through working-capital release rather than recurring conversion. Cash on hand fell 69.5% even as borrowings rose, so the cash improvement did not strengthen the liquidity position.

This briefing cannot assess the underlying organic performance of individual portfolio companies, the durability of non-operating gains driving PBT, or the run-rate interest burden on the enlarged debt stack.