Me Today FY25: revenue grew, solvency worsened

What changed

Revenue rose 48.2% to NZ$7.5m in FY25 versus NZ$5.0m in FY24, with the Me Today brand contributing NZ$4.3m, King Honey NZ$3.7m, and agency services NZ$0.5m. Despite this growth, EBITDA deteriorated modestly from -NZ$4.5m to -NZ$4.8m, meaning the additional revenue was largely absorbed by costs. NPAT improved from -NZ$11.3m to -NZ$6.0m, but the FY24 loss was inflated by NZ$6.8m of non-recurring and non-cash items relating to the King Honey business, making the year-on-year NPAT comparison flattering rather than reflective of underlying progress. At the PBT line, the FY25 loss of NZ$6.0m is the cleaner read and has no prior-year equivalent disclosed for direct comparison. Operating cash outflow was NZ$0.9m. Cash on hand was NZ$1.3m against gross borrowings of NZ$15.8m, implying net debt of approximately NZ$14.5m. Equity is negative at -NZ$2.3m.

What matters

• King Honey is the primary loss engine despite its revenue contribution. The segment generated NZ$3.7m of revenue but a segment result of approximately -NZ$3.6m — effectively a near-100% loss ratio. This single unit is responsible for the largest share of group losses. In contrast, the Me Today brand, the strategically prioritised business, produced a segment loss of roughly -NZ$1.0m on NZ$4.3m of revenue (-24% margin), which is still negative but structurally more tractable. The group cannot be meaningfully profitable while King Honey is retained in its current form.

• The balance sheet is technically insolvent. Total liabilities of NZ$17.5m exceed total assets of NZ$15.2m, producing negative equity of NZ$2.3m. Gross borrowings of NZ$15.8m against NZ$1.3m cash leaves the company with almost no liquidity buffer. Inventory of NZ$11.2m — equivalent to approximately 548 days of FY25 revenue — represents a large illiquid asset that underpins the asset base but is difficult to monetise quickly. The combination of negative equity, thin cash, and ongoing operating losses raises genuine going-concern considerations that any reader must weigh carefully.

Expectations

No formal targets or forward guidance were disclosed in the filing. The HY25 result provides internal shape context: first-half revenue was NZ$3.7m and second-half revenue was also NZ$3.7m, indicating broadly even phasing across the year. However, the EBITDA loss worsened markedly in the second half — implied H2 EBITDA was -NZ$3.0m versus -NZ$1.8m in H1 — suggesting cost escalation or margin compression in the back half that is not explained by revenue weakness alone. The company's stated strategy is to focus on New Zealand as the core market while pursuing a Chinese partnership as its biggest international opportunity. The release referenced a guidance-style aspiration for Me Today gross branded and agency revenue to exceed NZ$5.0m, which appears to have been met at the combined level, but no formal earnings or cash targets were set. The filing does not support a path to near-term profitability given the current cost structure and King Honey's loss profile.

Quality of result

The revenue growth is real — 48% year-on-year is substantial for a business of this size — but it is not yet converting to earnings. EBITDA went backwards despite the revenue gain, which indicates revenue is being bought at a cost that erodes margin. The NPAT improvement from -NZ$11.3m to -NZ$6.0m is almost entirely attributable to the absence of the NZ$6.8m non-recurring King Honey impairment charges that distorted FY24; on an underlying basis there is negligible improvement. Operating cash outflow of NZ$0.9m is better than the EBITDA loss of NZ$4.8m would imply, but this gap largely reflects non-cash charges (depreciation, amortisation, and likely impairment-related items) flowing through EBITDA that do not consume cash in the period — it does not signal strong underlying cash generation. The inventory position of NZ$11.2m warrants scrutiny: at 548 days of revenue cover it represents either significant forward-procurement or stock that may not be fully realisable at book value. There is no disclosed gross margin or cost-of-goods breakdown to assess product economics directly.

Unresolved

• What is the strategic and financial plan for King Honey? The segment is near-total loss-making and without a credible exit, restructure, or turnaround narrative, it will continue to consume the cash generated by the Me Today brand.
• How is the company funded beyond NZ$1.3m of cash? The borrowings structure, covenants, maturity profile, and whether any facilities are at risk of breach given negative equity are not transparent from the disclosed excerpts.
• What is the nature and realisability of NZ$11.2m of inventory? A writedown or slow-movement provision could materially worsen the balance sheet, which is already technically insolvent.
• The Chinese partnership is identified as the "biggest opportunity" but no commercial terms, revenue commitments, or timeline were disclosed — it cannot be assessed as a value driver.

This briefing cannot assess the risk of a covenant breach, capital raise requirement, or formal going-concern qualification, as the debt terms and auditor's report conclusions were not included in the provided excerpts.

Key metrics

Segment breakdown

Analytical metrics

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This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX/ASX company announcements. The underlying data is extracted from official company filings and verified against source documents. 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.