PBT jumped 87% but NPAT swung to a $11.7m loss on tax distortion

Net profit after tax, however, swung to a NZ$11.7m loss from NZ$6.2m profit, a -290.2% movement driven entirely by an effective tax rate of 147.2% versus 26.9% in HY23 — also unprecedented in the supplied historical range of 25.1%-38.7%. Management's release notes the tax adjustment "does not affect MCK's trading position or cash flow."

Operating cash flow tripled to NZ$15.3m (HY23: NZ$4.2m), EBITDA rose 84.2% to NZ$24.1m, and the group remained debt-free with NZ$35.4m cash (down from NZ$58.3m a year earlier). Hotel Operations returned to a NZ$6.6m segment result (HY23: NZ$3.0m) on revenue of NZ$55.9m.

The 378pp gap between PBT growth (+87.0%) and NPAT growth (-290.2%) is fully explained by the disclosed non-cash tax adjustment, not by trading. PBT margin of 25.2% sits within the historical range of 14.3%-42.0%, reinforcing that underlying earnings power is intact even as the headline NPAT line and ROE (-1.8%, unprecedented low versus a 1.0%-4.9% prior range) are temporarily disfigured.

The hotels recovery is the structural story. The release calls this the first half in five years where hotels returned to profit, with the hotel segment more than doubling its result on a 17.8% revenue lift. Combined with a 32% PBT uplift at CDI Australia and a NZ$12.8m surge in residential property development revenue (HY23: NZ$0.6m), the result confirms the Revive and Thrive strategy is converting to earnings rather than just revenue.

Cash generation strengthened materially but partly through a working-capital release. OCF/EBITDA of 63.3% sits at the upper edge of the historical range (mean 41.8%, max 67.4%), and pre-lease FCF of NZ$7.6m flipped from -NZ$0.8m. Receivable days fell from 68.2 to 32.9 — within historical normal range, but at the favourable end.

The historical shape is decisively second-half weighted: HY23 represented only 36.4% of FY23 revenue and 15.4% of FY23 NPAT. Simple annualisation of HY24 revenue gives NZ$170.6m versus FY23's NZ$164.8m, but that materially understates the likely full-year outturn if the second-half pattern persists and residential development settlements continue.

The release flags Australia apartment sales as "progressing" and notes a corporate-travel slowdown affecting hotels. Both are H2 swing factors the briefing cannot quantify from the disclosures provided.

The earnings uplift is broad-based across hotels, residential land, residential property and Australian operations rather than concentrated in a single non-recurring sale, and PBT margin remains within historical norms. The tax-line distortion is a presentation issue, not an economic one — cash flow corroborates this.

Cash quality is more nuanced. The NZ$6.8m operating working-capital release sits at the lower edge of the historical range (1 of 4 prior periods showed builds averaging NZ$22.6m; 3 showed releases averaging NZ$3.8m), so the release is unusually favourable rather than typical. Receivables dropped NZ$7.1m year-on-year, contributing meaningfully to the OCF tripling. Capex rose 52% to NZ$7.7m (9.0% of revenue), and FCF/NPAT of -64.6% is not meaningful given the loss-making NPAT denominator. The durable read: pre-lease FCF of NZ$7.6m is in line with the 4-period mean of NZ$8.6m, which suggests the underlying cash run-rate is normal rather than exceptional once the working-capital tailwind is set aside.

This briefing cannot assess hotel forward bookings, the precise composition of the tax adjustment, or H2 residential settlement timing because none of those disclosures are present in the supplied release materials.