Capital raise puts Me Today's debt headroom in focus

EBITDA actually deteriorated to -$4.8m from -$4.5m, so the narrower bottom-line loss reflects lower below-EBITDA charges rather than improved operating economics. Cash on hand fell 55.6% to $1.3m while gross borrowings rose marginally to $15.8m. Total assets fell to $15.2m, below the historical baseline range of $21.5m-$39.5m. Inventory fell 22.9% to $11.2m, releasing $3.3m of working capital, which is sharply below the historical average release of $1.2m.

Capital raise adds balance-sheet context, with NZ$2.6m capital raised, but borrowings and gearing are the direct leverage evidence.

Total equity at -$2.3m and cash at $1.3m against $15.8m of borrowings indicates the balance sheet is stretched. Continued operating losses without external funding would compound the deficit.

Revenue scale has not unlocked operating leverage. A 48.1% top-line increase, which is well above the historical range of -36.2% to +14.7%, coincided with a wider EBITDA loss. This matters because the strategy implicitly assumes scale delivers margin; another year of scaling without improvement would challenge that premise.

Cash conversion sits well below the historical baseline. OCF/EBITDA of 19.7% is below the historical range of 69.4%-207.6%. The $0.9m operating cash outflow was flattered by the $3.3m inventory drawdown, so the headline cash-burn improvement is balance-sheet-assisted rather than earned.

HY25 revenue of $3.7m represented 50.1% of the full year, implying an essentially flat second half on revenue but a heavier H2 EBITDA loss of about -$3.0m versus -$1.8m in H1. Operating cash flow swung from -$1.0m in H1 to roughly $0.1m positive in H2, again pointing to working-capital timing rather than improving underlying economics. Release commentary flags that a King Honey disposal will be reported in FY26, which will reshape the segment mix but is not reflected in current numbers.

The 46.6% PBT and NPAT improvement is driven by lower below-EBITDA charges, not better operating performance, because EBITDA itself moved the wrong way. The $2.2m year-on-year improvement in operating cash flow was largely funded by the $3.3m inventory drawdown, with inventory days falling from 1,051 to 548 — an unusually steep destocking. Receivable days also improved, from 102.7 to 66.6, supporting cash. Both are working-capital movements rather than earnings; once inventory and receivables normalise, the underlying operating cash burn would re-emerge unless the EBITDA gap closes.

Pre-lease FCF of -$0.9m looks dramatically better than the historical mean of -$6.9m, but the same caveat applies. The capex line is effectively zero, so the FCF print is dependent almost entirely on operating cash, which itself is dependent on the inventory release. Strip the working-capital tailwind out and underlying cash quality is consistent with the -$4.8m EBITDA loss.

This briefing cannot assess going-concern conclusions, the commercial terms of the King Honey disposal, or the response of the major Chinese honey customer beyond what release commentary discloses.