Table of Contents
What changed
Revenue rose 7.8% to NZ$263.7m and PBT jumped 282.7% to NZ$94.5m from NZ$24.7m. NPAT swung to NZ$57.0m from a NZ$2.1m loss, but this +2,789% move is distorted: FY24's effective tax rate was an abnormally high 108.6% on a tiny pretax base, versus 39.7% in FY25. PBT growth is the cleaner operating read. Segment mix shifted sharply: Office revenue more than doubled to NZ$64.9m (24.6% of revenue versus 12.7%), while the "Other" bucket collapsed from NZ$33.4m to NZ$0.7m. Operating cash flow fell 19.0% to NZ$80.5m. Gross borrowings rose 7.5% to NZ$1.285b, lifting implied net debt to roughly NZ$1.270b, while total equity was flat. The declared final dividend of 1.35cps is 5.3% below the prior final of 1.425cps.
What matters
- Second-half profit was weak, not the headline. HY25 NPAT was NZ$43.2m, meaning implied H2 NPAT was only NZ$13.8m — just 24.2% of full-year NPAT on 52.1% of full-year revenue. The full-year PBT rebound is heavily front-loaded.
- Cash conversion deteriorated while leverage increased. Operating cash fell NZ$18.8m even as PBT rose NZ$69.8m. Capex moderated to NZ$102.5m from NZ$172.0m, which narrowed pre-lease free cash outflow to NZ$22.0m from NZ$72.7m, but FCF remains negative and borrowings still rose ~NZ$89m.
- Mix is rebalancing toward Office. Office segment result rose to NZ$45.9m from NZ$21.7m at ~70.6% margin. Mixed-use remains the dominant contributor at NZ$124.9m result on NZ$166.2m revenue, consistent with the stated retail-led mixed-use strategy.
Expectations
No quantified guidance, forward-work pipeline, or stated targets were supplied. Against the HY25 shape, the full-year result underperformed a simple doubling of first-half NPAT (NZ$86.4m implied versus NZ$57.0m actual), indicating H2 earnings pressure that the release excerpts do not explain. On revenue the shape is more even (H1 at 47.9% of FY), so the H2 weakness sits in margin or below-the-line items rather than top line. The release does not support an assessment of run-rate earnings power into FY26.
Quality of result
Mixed. The PBT rebuild is real and operationally backed by the Office segment scaling up, but three items limit durability:
- Operating cash flow moved in the opposite direction to PBT, with working capital absorbing cash: receivable days lengthened to 13.5 from 11.8, inventory days rose to 123.4 from 109.7, and operating working capital grew NZ$17.5m.
- The NPAT growth rate is a tax-line optical effect; a normalised ETR would have produced a far more modest year-on-year swing.
- Pre-lease FCF is still negative at NZ$22.0m, so the dividend (37.8% of NPAT) is not covered by free cash flow and is being funded alongside a NZ$89m increase in gross borrowings.
Unresolved
- What drove the sharp H2 profit deceleration to an implied NZ$13.8m after a NZ$43.2m first half, given revenue was roughly evenly split?
- What is the composition of the collapsed "Other" segment (NZ$33.4m → NZ$0.7m), and does this reflect asset sales, reclassification, or a genuine revenue loss?
- Where is the NZ$89m increase in gross borrowings being deployed given capex fell NZ$69.6m year on year?
- Is the 5.3% cut in the final dividend a one-off or the start of a lower payout posture, given pre-lease FCF remains negative?
- No net debt/EBITDA, NTA per share, tenant concentration, or forward work disclosure was provided, so this briefing cannot assess leverage covenants headroom, property-style valuation, or forward earnings visibility.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $263.7m | $244.7m | +7.8% ↑ |
| Net profit after tax | $57.0m | −$2.1m | +2789.6% ↑ |
| Net cash inflow from operating activities | $80.5m | $99.3m | -19.0% ↓ |
| Final dividend per share | 1.4c | 1.4c | -5.3% ↓ |
| Profit before tax | $94.5m | $24.7m | +282.7% ↑ |
| Cash and cash equivalents | $14.4m | $18.2m | -20.9% ↓ |
| Total assets | $3.3b | $3.2b | +3.2% ↑ |
Reference: annolyse.ai/briefings/kpg-fy25
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Mixed-use | $166.2m | $149.1m | $124.9m | +2.0pp |
| Office | $64.9m | $31.1m | $45.9m | +11.9pp |
| Retail | $27.6m | $27.0m | $20.8m | -0.6pp |
| Other | $0.7m | $33.4m | $0.1m | -13.4pp |
Reference: annolyse.ai/briefings/kpg-fy25
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | +282.7% | — | cleaner earnings measure |
| Effective tax rate | 39.7% | 108.6% | — |
| FCF pre-lease | −$22.0m | −$72.7m | +$50.7m |
| FCF / NPAT | -38.5% | n/m | complementary conversion metric |
| Capex % revenue | 38.9% | 70.3% | — |
| Capex | $102.5m | $172.0m | −$69.6m |
| Debtor days | 13.5 | 11.8 | +1.7 days |
| Inventory days | 123.4 | 109.7 | +13.7 days |
| Operating working capital | $98.9m | $81.4m | +$17.5m absorbed |
| Trade debtors | $9.8m | $7.9m | +$1.8m |
| Net debt | $1.3b | $1.2b | +$93.3m |
| Gross borrowings | $1.3b | $1.2b | +$89.5m |
| Payout ratio vs NPAT | 37.8% | — | — |
| ROE (annualised) | 3.1% | -0.1% | Strengthening |
| HY25 share of FY25 revenue | 47.9% | — | Other half was 52.1% |
| HY25 share of FY25 NPAT | 75.8% | — | Other half was 24.2% |
| Profit from continuing operations | $57.0m | −$2.1m | +$59.1m |
Reference: annolyse.ai/briefings/kpg-fy25
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.