Table of Contents
What changed
Revenue declined 4.2% to NZ$164.8m, but operating profit rose 30.1% to NZ$64.4m and EBITDA rose 20.4% to NZ$72.8m, lifting profit before tax 26.9% to NZ$64.6m. Despite this, attributable NPAT fell 12.9% to NZ$40.0m as tax expense lifted the effective tax rate to roughly 21.5% from 10.6%. Segment mix shifted further toward Residential Land Development, which grew to 55.9% of revenue from 51.6% and delivered an inferred PBT margin near 47.2%; Hotel Operations fell to 33.5% of revenue but its result recovered to NZ$13.8m from NZ$1.9m. Operating cash flow collapsed to NZ$29.0m from NZ$86.1m, yet the balance sheet strengthened materially — cash rose to NZ$58.1m, gross borrowings fell to NZ$1.0m from NZ$38.0m, and the group ended in an estimated net cash position of about NZ$57.1m. A 3.5cps final dividend was reinstated after no dividend in FY20.
What matters
- PBT is the cleaner read, not NPAT. The 39.8pp gap between PBT growth (+26.9%) and NPAT growth (-12.9%) is almost entirely a tax-rate step-up, compounded by the difference between profit for the year (NZ$50.7m) and attributable NPAT (NZ$40.0m) that implies a material non-controlling-interest deduction (CDL Investments is majority-owned). Underlying operating earnings improved; the headline bottom line does not show it.
- Cash conversion deteriorated sharply. OCF/EBITDA fell to 39.9% from 142.5%, and OCF was actually negative in H2 (implied -NZ$26.0m) after a NZ$55.1m H1 inflow. Lower capex (NZ$4.0m vs NZ$6.0m) kept pre-lease FCF positive at NZ$25.0m and comfortably covered the ~NZ$3.5m dividend, but the FCF-to-NPAT ratio dropped from 174% to 63%.
- Balance sheet moved decisively to net cash. Net debt swung from +NZ$17.2m to approximately -NZ$57.1m, giving negative net debt/EBITDA of roughly -0.8x. That provides substantial optionality even as equity reduced to NZ$617.8m from NZ$843.0m.
Expectations
No quantified forward-work figure or medium-term target was disclosed. The only shape context is HY21: first-half revenue of NZ$98.4m was 59.7% of the full year, and HY21 NPAT of NZ$25.3m was 63.3% of FY21 NPAT, implying an H2 NPAT of only NZ$14.7m. The result therefore confirms a first-half-weighted pattern driven by the timing of property settlements at CDL Investments and Zenith rather than a building run-rate. Management commentary points to continued strength in NZ property markets, but nothing in the release quantifies FY22 settlement pipeline, occupancy trajectory, or cost recovery.
Quality of result
Earnings quality is mixed. The PBT uplift is real and supported by a genuine recovery in hotel segment profitability (PBT margin to ~25.0% from ~3.0%) and resilient land development economics. However, the profit mix is heavily dependent on property settlement timing — Residential Land Development and Residential Property Development together contributed the bulk of segment profit — and that timing explains both the first-half skew and the H2 cash outflow. Working capital lines (receivables, inventories) were broadly stable, so the OCF collapse is not a simple AR/inventory build within the disclosed items; it points to movements in payables, tax, or development-related balances not broken out in the extract. Reported EBITDA is a non-GAAP measure without a detailed reconciliation, and no non-recurring adjustments were flagged.
Unresolved
- What drove the 66.3% drop in operating cash flow given stable trade debtors and inventories, and is the H2 negative OCF a timing effect or a working-capital build in development inventory?
- What caused the effective tax rate to roughly double to 21.5%, and is that sustainable guidance for FY22?
- How large is the NCI leakage between NZ$50.7m profit for the year and NZ$40.0m attributable NPAT, and how does CDL Investments’ trajectory feed the group result forward?
- With NZ$57.1m of net cash and a reinstated but modest dividend (payout ~8.7% of NPAT), what is the intended use of the balance sheet — hotel reinvestment, land bank, or capital returns?
- Hotel segment recovery is clear in the result, but current occupancy, RevPAR, and border-recovery sensitivities are not quantified.
This briefing cannot assess valuation or market-relative positioning because no share price, forward-work backlog, or FY22 guidance was supplied in the extract.
Key metrics
| Metric | FY21 | FY20 | Change |
|---|---|---|---|
| Revenue | $164.8m | $172.0m | -4.2% ↓ |
| EBITDA | $72.8m | $60.4m | +20.4% ↑ |
| Net profit after tax | $40.0m | $46.0m | -12.9% ↓ |
| Net cash inflow from operating activities | $29.0m | $86.1m | -66.3% ↓ |
| Final dividend per share | 3.5c | 0.0c | ↑ |
| Operating profit | $64.4m | $49.5m | +30.1% ↑ |
| Profit before tax | $64.6m | $50.9m | +26.9% ↑ |
| Cash and cash equivalents | $58.1m | $20.8m | +180.0% ↑ |
| Total assets | $680.8m | $987.9m | -31.1% ↓ |
Reference: annolyse.ai/briefings/mck-fy21
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Hotel Operations | $55.2m | $64.1m | $13.8m | -3.8pp |
| Residential Land Development | $92.1m | $88.8m | $43.5m | +4.3pp |
| Investment Property | $0.0m | — | −$0.0m | n/a |
| Residential Property Development | $17.4m | $19.1m | $7.4m | -0.5pp |
Reference: annolyse.ai/briefings/mck-fy21
Analytical metrics
| Metric | FY21 | FY20 | Context |
|---|---|---|---|
| PBT growth | +26.9% | — | cleaner earnings measure |
| Effective tax rate | 21.5% | 10.6% | — |
| OCF / EBITDA (cash conversion) | 39.9% | 142.5% | deteriorated |
| FCF pre-lease | $25.0m | $80.1m | −$55.1m |
| FCF / NPAT | 62.5% | 174.3% | complementary conversion metric |
| Capex % revenue | 2.4% | 3.5% | — |
| Capex | −$4.0m | −$6.0m | +$2.0m |
| Debtor days | 16.1 | 15.5 | +0.6 days |
| Inventory days | 2.8 | 2.9 | -0.1 days |
| Trade debtors | $7.3m | $7.3m | −$0.0m |
| Net debt | −$57.1m | $17.2m | −$74.4m |
| Net debt / EBITDA | -0.79x | 0.28x | Strengthening |
| Gross borrowings | $1.0m | $38.0m | −$37.0m |
| Payout ratio vs NPAT | 8.7% | — | — |
| Payout ratio vs FCF pre-lease | 14.0% | — | covered |
| ROE (annualised) | 6.5% | 5.5% | Strengthening |
| HY21 share of FY21 revenue | 59.7% | — | Other half was 40.3% |
| HY21 share of FY21 NPAT | 63.3% | — | Other half was 36.7% |
| Profit from continuing operations | $50.7m | — | — |
Reference: annolyse.ai/briefings/mck-fy21
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX/ASX 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.