Honey segment loss blew out to NZ$15.3m on 630-tonne stock overhang

That single segment movement is the reason the group PBT loss widened 24.4% to NZ$22.1m on revenue growth of 14.7% to NZ$8.3m. Annolyse's historical baseline classifies PBT growth of -24.4% as below the recent range (3-period mean +33.7%).

NPAT fell only 9.8% to a NZ$19.5m loss because a tax credit lifted the effective tax rate to 11.8% from 0.0%; PBT is the cleaner read on operating performance.

The reporting period covers 15 months to 30 June 2022, so headline comparisons against a 12-month prior period are not strictly like-for-like.

Honey segment revenue grew modestly (NZ$5.0m vs NZ$4.6m) but the segment result deteriorated by NZ$14.1m. That pattern is consistent with inventory write-downs and provisions tied to the downsizing decision rather than trading performance. For investors, this means most of the headline loss widening is a balance-sheet revaluation event on the NZ$16.8m honey stockpile, not a deterioration in underlying demand for the rest of the group.

Cash burn accelerated and FCF sits well below baseline. Pre-lease free cash flow of -NZ$12.1m is well below the supplied historical mean of -NZ$3.2m (range -NZ$5.6m to -NZ$0.9m), and operating cash outflow widened to NZ$11.7m from NZ$9.6m. The cash balance only rose to NZ$5.4m from NZ$1.1m because equity grew NZ$5.0m, implying a capital raise funded the burn.

Leverage looks better but only because of that raise. Net debt fell to NZ$6.9m from NZ$11.3m and net debt to EBITDA improved to 1.2x from 2.6x. The improvement is funding-driven, not earnings-driven, so it does not yet validate the strategy.

This is not a normal 1H/2H profile and should not be read as operating acceleration without further context.

What the release does support is that revenue scale is finally building from a very small base (HY21 was just NZ$0.4m). What it does not support is any view on when the honey downsizing programme will be complete, what realisable value the remaining 630 tonnes carries, or whether the current cash runway is sufficient to execute it.

The reported NPAT improvement versus PBT is entirely a tax-credit effect (11.8% effective rate versus nil prior), so any reference to NPAT understates the operating deterioration by 14.6 percentage points of growth. PBT is the right reference point.

Cash conversion of 207.6% of EBITDA sits in Annolyse's above-normal classification, but for a loss-making business that ratio means cash burn exceeds EBITDA loss, not that the company is generating high-quality cash. Inventory days of 741 (down from 863) remain extraordinary and reflect the honey stockpile rather than working-capital efficiency; the favourable move in debtor days to 40 from 130 is real but small in dollar terms (NZ$1.7m receivable release).

• Operating cash outflow: NZ$11.7m
• Capex: NZ$0.3m (4.0% of revenue)
• Pre-lease FCF: -NZ$12.1m, funded by an implied equity raise of roughly NZ$5.0m

The durable read is that revenue is growing off a small base, the honey business has been written down hard, and the balance sheet has been refreshed by shareholders rather than by trading.

This briefing cannot assess the realisable value of the Mānuka honey inventory or the funding adequacy of the current cash position against the unwind plan.