NPAT swung +385% on $280m disposal gain while cash conversion fell to 6.4%

PBT grew 354.8% to $327.7m, classified as above the historical range (4-period mean 121.3%, range -110.1% to 327.9%). Revenue fell 14.4% to $1.5b, which sits below Annolyse's historical baseline (4-period mean +51.7%, range +11.7% to +112.9%) and reflects portfolio divestments rather than underlying decline.

Cash generation moved the other way. Operating cash flow fell 64.9% to $32.7m, capex stepped up to $250.2m (17.1% of revenue), and pre-lease free cash flow worsened to -$217.5m, near the lower edge of the historical range (4-period mean -$113.8m). Net debt rose to $5.8b from $5.4b, and the interim dividend was held flat at 7.25cps.

Both the revenue decline and the NPAT swing are products of portfolio churn — divested operations stripped out comparable revenue, while a $280.2m post-tax gain on discontinued operations inflated NPAT. Management's own preferred measure, proportionate operational EBITDAF, rose just 7% to $514m, which is the cleaner read on the operating portfolio and is materially more modest than the headline figures suggest.

Payout ratio versus pre-lease FCF is suppressed because the source-backed cash-dividend bridge is unavailable.

Leverage and asset base are stretching. Total assets expanded to $16.8b, above the historical range (mean $12.9b), and net debt climbed roughly $456m year-on-year as capex intensity rose to 17.1% of revenue. The shape is consistent with continued investment in CDC and other growth platforms, but financial flexibility is tightening at the margin.

The HY25-to-FY25 shape implies the first half historically delivered roughly 51% of full-year EBITDAF, so the $514m proportionate operational EBITDAF print broadly tracks a similar full-year run-rate to FY25's $986m, before any contribution from announced CDC capacity additions.

The release flags strong CDC demand and a 140 MW announcement, plus continued One NZ momentum. The gap that matters is between the operational +7% EBITDAF growth and the much larger headline NPAT figure: investors who anchor on the latter risk overstating underlying progress.

That is the primary explanation for the -30.6 percentage-point gap between PBT growth (354.8%) and NPAT growth (385.4%), alongside the swing in effective tax rate to 7.2% from -60.5%.

Underlying earnings durability looks softer than the headline. Operational EBITDAF growth at 7% is consistent with the prior period's pace, but cash conversion has weakened, working capital absorbed cash (inventories built to $47.3m, owc movement +$47.3m versus a near-zero prior balance), and capex of $250.2m drove pre-lease free cash flow to -$217.5m. ROE improved to 7.3% from -2.6% but remains at the lower edge of the historical range (mean 11.9%) once the disposal gain is set aside conceptually.

This briefing cannot assess CDC's contracted forward demand pipeline, segment-level capex commitments, or covenant headroom on gross borrowings of $6.1b, none of which are quantified in the supplied excerpts.