Revenue fell 36.2% on Honey collapse; EBITDA margin sank to -89.1%

Annolyse's historical baseline classifies revenue growth as below normal (3-period mean +19.3%, range -4.7% to +48.1%). Honey dropped from NZ$5.8m to NZ$2.5m as the China-based partner held back orders pending manuka inventory drawdown; Me Today branded sales grew to NZ$2.3m from NZ$1.5m.

EBITDA margin of -89.1% sits below the supplied historical range of -68.3% to -63.8% even though the EBITDA loss narrowed 12.9% to NZ$4.5m and NPAT loss narrowed 13.1% to NZ$11.3m. Operating cash outflow improved to NZ$3.1m from NZ$5.6m. Equity fell 69.8% to NZ$3.6m and gross borrowings rose 23.6% to NZ$15.4m, following the March 2024 capital and debt restructure that lifted cash to NZ$2.8m.

Honey revenue fell 56.9% and dropped from 73.8% to 45.7% of group revenue, but the segment result widened to a NZ$1.8m loss (FY23: NZ$1.2m). That means costs did not flex with the volume drop, so any further demand softness from the China partner falls almost directly to EBITDA. Management cites ongoing dialogue and an option for the Chinese partner to acquire up to 50% of the trademark in greater China subject to revenue milestones, but no recovery has been quantified.

Balance-sheet capacity is now thin against the loss run-rate. Equity of NZ$3.6m supports an NPAT loss of NZ$11.3m and an ROE of -145.1% (FY23: -72.0%). Gross borrowings rose by NZ$2.9m to NZ$15.4m and net debt of roughly NZ$12.5m sits against negative EBITDA, so further losses at the FY24 rate would erode the post-restructure equity buffer within a year on the supplied figures.

Debtor days jumped to 102.7 from 76.8, above the historical mean of 61.2 days. Trade debtors actually fell in dollars (NZ$1.4m vs NZ$1.7m), so the move is a denominator effect from the revenue drop rather than a collection problem, but it does tighten working-capital headroom on a smaller base.

The half-year shape shows revenue was second-half weighted (HY24: NZ$2.3m, implied second half: NZ$2.8m), but that trajectory still leaves annualised revenue at the FY24 run-rate, not a recovery glide-path. The investment case rests on whether the China honey relationship resumes ordering and whether Me Today branded growth can sustain the FY24 step-up; neither outcome is supported or refuted by this filing.

Cash conversion of 69.4% sits within the company's historically wide range (mean 111.7%, spanning 19.7% to 207.5%), but at this scale of losses the ratio is dominated by working-capital timing rather than earnings durability.

The cash balance rising to NZ$2.8m came alongside a NZ$2.9m increase in gross borrowings; pre-lease free cash flow was -NZ$3.1m, an improvement on -NZ$5.6m but still loss-making. This means the balance sheet has been supported by the March 2024 restructure rather than by trading. The Me Today branded segment shows real revenue progress, but at group level the cost structure still requires materially higher revenue to reach EBITDA breakeven, and the FY24 mix shift toward branded sales does not yet bridge that gap.

This briefing cannot assess FY25 guidance, debt covenant headroom, or segment-level cost flex, none of which are quantified in the supplied release.