PBT fell 32.7% on 16.9% revenue decline; cash conversion dropped to 70.0%

EBITDA fell 15.3% to $720.6m, a milder drop than PBT, reflecting depreciation and amortisation pressure on a lower revenue base.

Cash generation weakened faster than the P&L: operating cash flow declined 33.3% to $504.8m and the cash balance fell 37.6% to $213.6m. Commentary indicates group revenue is down 18% on a constant-currency basis, so FX provided roughly one percentage point of support to the reported revenue decline.

Capital raise adds balance-sheet context, with NZ$501m capital raised, but borrowings and gearing are the direct leverage evidence.

PBT growth of -32.7% is the cleaner operating read because the effective tax rate jumped from 27.4% to 47.2%, driven by approximately $69m of abnormal items (per the commentary, net profit before abnormals was $277.9m, down 35%). Investors should anchor to PBT and the before-abnormals line rather than the headline NPAT number.

Cash conversion deteriorated meaningfully. OCF-to-EBITDA fell from 89.0% to 70.0%, a 19-percentage-point swing. Receivable days rose to 47.6 from 39.8 — a 7.8-day extension despite revenue contracting — pointing to working-capital absorption that the headline operating-cash decline understates relative to EBITDA.

Dividend coverage thinned despite the unchanged annual distribution. Full-year dividend was 172 cents per share, unchanged from FY23. Payout ratio versus pre-lease FCF is suppressed pending source-backed cash-dividend verification. The dividend remains covered by earnings, but the cash-flow cushion requires source-backed verification before showing a numeric FCF payout ratio.

Second-half implied EBITDA of $400.3m versus first-half $320.3m supports the improving operating trajectory within the year. However, second-half NPAT of $84.1m sits below H1's $124.6m, which is where the abnormal items appear to have landed.

The release flags volume improvements and customer destocking dynamics, but provides no quantitative forward target, freight-rate outlook, or revenue guidance for FY25. The read is that operating trends improved sequentially within the year, but the magnitude and durability of any recovery into FY25 is not supported by the disclosure.

PBT and revenue declines reflect the freight-rate normalisation cycle and are economically real. NPAT is depressed by abnormals that may not recur, which helps next-year compares but means the reported $208.7m headline overstates the underlying earnings deterioration. The before-abnormals NPAT of $277.9m is the more reliable run-rate marker.

Cash quality is the more troubling signal. OCF-to-EBITDA conversion fell to 70.0%, with receivables consuming cash even as revenue contracted. FCF pre-lease of $250.4m still represents 120.0% of reported NPAT — flattered by lower capex of $254m versus $323.9m prior, and by the NPAT denominator being depressed by abnormals — but that high ratio masks underlying deterioration in operating-cash conversion.

ROE halved from 24.7% to 11.3%, reflecting both lower earnings and a larger equity base from continued reinvestment. Capex moderated meaningfully year-on-year, suggesting management is pacing property and warehousing build-out as volumes normalise.

This briefing cannot assess whether trading momentum past 31 March 2024 supports a return toward FY23 earnings levels.