Debtor days hit unprecedented 3.0 as receivables more than tripled

The driver was trade receivables, which more than tripled to NZ$1.4m and pushed debtor days to 3.0 — an unprecedented high against a four-period historical mean of 0.8 days and a prior range of 0.5-1.2 days.

Headline dollar movements were positive: revenue lifted to NZ$170.2m from NZ$162.1m, EBITDA to NZ$16.4m from NZ$16.1m, and NPAT to NZ$6.7m from NZ$6.4m. Source disclosures reference revenue from continuing operations, so the reported growth percentages carry a basis-discontinuity caveat and are not cited here as specific figures; the NPAT and PBT growth comparisons are not analytically comparable on a clean trend basis for the same reason.

Net debt fell NZ$5.1m to NZ$1.9m as gross borrowings reduced from NZ$8.5m to NZ$2.5m, and free cash flow rose to NZ$8.5m from NZ$7.6m.

Debtor days of 3.0 sit well above the 0.5-1.2 day historical band, and trade receivables jumped from NZ$0.3m to NZ$1.4m. With no commentary in the supplied excerpts explaining the change, the read-through to FY27 cash conversion depends on whether this is a year-end timing position that unwinds in H1 or a structural shift in collection terms.

Leverage stepped down meaningfully. Net debt of NZ$1.9m versus NZ$6.9m a year ago, and net debt to EBITDA of just 0.1x, give MFB material balance-sheet flexibility. This matters because the business now has optionality to fund growth investment, sustain distributions, or absorb a softer trading period without refinancing pressure.

EBITDA and NPAT margins remain below historical range. EBITDA margin of 9.6% sits below the 9.9%-17.6% historical band, and NPAT margin at 3.9% also reads below the 5.8% four-period mean. The dollar uplift came from the revenue line rather than margin recovery toward the 12.6% EBITDA mean; the NPAT dollar increase itself is not a clean like-for-like trend given the continuing-operations basis caveat.

The release notes H2 revenue growth of 6.2%, and the half-year shape shows MFB delivered 50.2% of revenue in H1 but only 43.9% of EBITDA and 42.7% of NPAT in that period — earnings were second-half weighted.

Against the historical EBITDA margin band of 9.9%-17.6%, the FY26 print of 9.6% leaves limited operating leverage cushion if revenue softens. What this briefing cannot verify from the supplied excerpts is whether management has set or reaffirmed any explicit FY27 revenue, margin, or EBITDA target.

The effective tax rate of 25.6% versus 26.5% prior is within the historical range, so no tax distortion is flattering the result this year, though the underlying NPAT dollar comparison still carries the continuing-operations basis caveat noted above and should not be read as a clean trend.

However, conversion held only because the absolute working capital build remained modest despite the unusual receivables jump, and inventory days fell to the lower edge of the historical band at 1.8 days against a 0.9-4.9 day range. The combination — receivables up sharply, inventory at the bottom of the band, and cash falling from NZ$1.5m to NZ$0.6m even as borrowings reduced — suggests timing and balance-sheet positioning, more than underlying operating improvement, supported the cash quality print.

This briefing cannot assess management's commentary on the receivables movement, the FY27 outlook content, or the nature of the continuing-operations basis change because those disclosures are not present in the supplied excerpts.