NPAT swung NZ$451.9m to a loss while rents grew 5.7%

Yet the operating data held up: revenue grew 5.7% to NZ$259.1m (upper edge of the historical range, baseline mean -9.5%) and operating cash inflow only slipped 2.3% to NZ$113.0m. The gap between stable cash-generating activity and a deeply negative PBT was absorbed below the operating-profit line — operating profit itself only fell 20.5% to NZ$129.6m — and is consistent with a large non-cash fair-value movement on investment properties.

Capex almost doubled (+99.5%) to NZ$162.3m, taking pre-lease FCF to -NZ$49.4m (versus +NZ$34.2m prior) and the final dividend was halved to 1.425 cps. Total assets fell NZ$356.1m to NZ$3.2b and equity fell 14.9% to NZ$1.9b.

Rental revenue at +5.7% sits at the upper edge of Annolyse's historical range, operating cash held near flat, and operating profit was down 20.5% — far short of the -182.4% PBT move. For a property issuer, the gap was absorbed below operating profit and looks like a portfolio re-mark. The cash-yielding part of the business is intact; the equity book is not.

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

The asset base has been re-marked and ROE has reset. Total assets at NZ$3.2b are at the lower edge of the historical range (mean NZ$3.4b), equity fell NZ$338.1m, and ROE printed -11.8% — unprecedented low against a 4.5% historical mean. With gross borrowings essentially unchanged at NZ$1.1b, gearing rose mechanically as the equity denominator shrank.

The half-year shape shows HY23 NPAT at -NZ$151.1m (66.3% of the full-year loss), implying an H2 loss of -NZ$76.6m — a smaller second-half hit, hinting most of the fair-value damage was taken in H1. Revenue split 49.9%/50.1% across halves, so the rental run-rate looks even rather than back-end-loaded.

The release does not support a recovery thesis on the numbers it discloses: capex is elevated, pre-lease FCF is negative, and the dividend has been reset down. What it does support is that the underlying rental and cash position has not deteriorated in line with reported earnings.

PBT is the cleaner read this year — the effective tax rate flipped from +14.0% to -6.0% as a tax credit on the pre-tax loss widened the PBT-to-NPAT gap by 19.1 percentage points — and PBT itself is unprecedented-low at -182.4%. That confirms the loss is real on the income statement, even before tax noise.

Cash quality is less reassuring than it looks. Operating cash held up, but it was helped by a small working-capital release of NZ$2.4m — below Annolyse's normal range, where 4 of 4 prior periods built working capital averaging NZ$25.7m. That release will not repeat. The FCF/NPAT ratio of 21.7% is uninformative against a negative NPAT base. The economically important number is pre-lease FCF of -NZ$49.4m, and its driver is capex intensity at 62.7% of revenue — structurally elevated. If capex stays at this level, FCF stays under pressure even with rents intact.

This briefing cannot assess the underlying portfolio's cap-rate assumptions, asset-by-asset valuation marks, lease expiry profile, or development-pipeline economics, none of which were disclosed in the supplied data.