Me Today HY25: earnings moved, cash quality weakened

What changed

Revenue rose 64.2% to NZD 3.7m in HY25 from NZD 2.3m in HY24, driven by strong growth in the Me Today branded and agency segment (gross revenue up to roughly NZD 2.7m from NZD 1.1m) and a more modest lift in King Honey (NZD 1.6m from NZD 1.2m). Operating EBITDA loss narrowed 19.5% to NZD -1.8m from NZD -2.2m, with King Honey contributing most of the improvement. The PBT loss narrowed sharply to NZD -2.4m from NZD -7.3m, though the prior period was heavily distorted by approximately NZD 6.8m of non-recurring and non-cash items in King Honey; stripping that context, the underlying operating trajectory is more modest than the headline 66.5% PBT improvement implies. Operating cash outflow improved to NZD -1.0m from NZD -1.9m. On the balance sheet, gross borrowings rose NZD 1.9m to NZD 15.6m, total equity collapsed 72.5% to NZD 1.3m, and estimated net debt widened to approximately NZD 14.0m.

What matters

• Balance sheet fragility dominates everything else. Total equity of NZD 1.3m against gross borrowings of NZD 15.6m and ongoing operating losses leaves virtually no buffer. The subordinated note alone stands at NZD 5.7m, bank loans at NZD 7.3m, and the overdraft at NZD 2.6m. With cash of only NZD 1.6m and the business still consuming cash every half, the viability question is structural, not cyclical.

• Revenue growth is real but neither segment has yet crossed into EBITDA profitability. Me Today/agency EBITDA was NZD -0.84m and King Honey NZD -0.42m. King Honey's loss narrowed meaningfully, which is the more encouraging operational signal, but both divisions are still burning cash at the operating line. The 64% revenue increase has not yet converted into positive unit economics at the group level.

• The PBT comparison is substantially distorted by prior-year impairments. The NZD 4.8m improvement in PBT reflects the absence of the large non-cash writedowns that inflated the HY24 loss, not a step-change in underlying trading. The EBITDA comparison is the cleaner read, and that shows only NZD 0.4m of improvement.

Expectations

No formal earnings guidance or medium-term financial targets were disclosed. The release references an intention for gross branded and agency revenue to exceed NZD 5.0m for the full year, which is an internal milestone rather than a statutory target. HY25 delivered NZD 2.7m on that metric, implying a roughly NZD 2.3m second-half requirement to hit it—achievable on current trajectory but not certain.

The FY24 full-year shape is only weakly seasonal: HY24 accounted for 45.2% of FY24 revenue and 49.6% of FY24 EBITDA, suggesting a broadly even split rather than a pronounced second-half skew. Annualising the HY25 revenue run rate yields approximately NZD 7.5m, which would represent ~48.7% growth on FY24's NZD 5.0m. That is an acceleration, but against a low base. The EBITDA trajectory is more cautious: if the second half mirrors the prior-year pattern, the implied FY25 EBITDA loss could approach NZD 3.5–4.0m before any operating leverage effect.

Quality of result

The revenue improvement has genuine underlying support—two-segment growth, a new agency revenue stream, and a directional shift away from the prior HY24 revenue decline. That is durable in the sense that it reflects a business rebuilding volume.

However, durability is qualified on multiple fronts. First, the bulk of the PBT improvement is the absence of prior-year non-cash impairments rather than earned profit. Second, operating cash outflow of NZD -1.0m against EBITDA of NZD -1.8m implies that working capital movements provided some partial offset, but the cash conversion ratio (OCF-to-EBITDA) of approximately 58% still left the group consuming cash. Third, inventory declined only modestly (NZD -0.8m to NZD 13.5m), which remains a disproportionately large asset relative to a NZD 3.7m half-year revenue base and raises questions about carrying value and turn velocity. Fourth, the balance sheet improvement is entirely absent—equity destruction continued and borrowings rose—so the result is being partially funded by incremental debt rather than operations.

Unresolved

• What are the terms, maturity profile, and covenants on the NZD 15.6m borrowing stack, and are any facilities in breach or subject to waiver given the near-zero equity position?
• Inventory of NZD 13.5m against NZD 3.7m of half-year revenue implies a turn well below 1x; what is the write-down risk on slow-moving or aged King Honey stock?
• The Me Today/agency EBITDA loss widened slightly despite a large revenue increase—what is the cost structure change that prevented operating leverage from flowing through?
• No gross-margin disclosure was provided; it is impossible to assess whether the revenue mix shift is margin-accretive or margin-dilutive at the contribution line.
• What is the refinancing or recapitalisation plan, and on what timeline, given that cash of NZD 1.6m is insufficient to absorb another half of NZD -1.0m operating outflow without a liquidity event?

This briefing cannot assess the probability or terms of any forthcoming capital raise or debt restructure that may be required to sustain the business beyond the near term.

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.