PBT margin fell to 6.5%, the weakest in four years, as NPAT slipped to NZ$251.0m

PBT fell to NZ$350.9m from NZ$383.6m and NPAT fell to NZ$251.0m from NZ$274.3m, while revenue lifted modestly to NZ$5.4b and EBITDA was essentially flat at NZ$759.8m versus NZ$761.5m.

Cash held its shape: operating cash flow was NZ$589.4m versus NZ$584.4m. Gross borrowings stepped up to NZ$1.4b from NZ$165.0m, but this primarily captures lease liabilities (NZ$1.3b current and non-current) being presented inside the borrowings line — a presentation basis shift rather than fresh debt funding, which means the headline net-debt-to-EBITDA jump should not be read as a clean leverage deterioration.

Revenue grew but the cost base grew faster, and the supplied historical baseline puts PBT margin below anything in the prior four years. Inside the segments, Transport — the largest contributor at NZ$2.5b of revenue — saw derived margin slip from 7.5% to 6.2%, and Air & Ocean revenue fell to NZ$2b from NZ$2.1b. This matters because the read on the business is about pricing and unit-cost discipline, not volume.

Working capital absorbed NZ$107.5m of cash, at the upper edge of the supplied historical range (mean NZ$37.9m, prior builds averaging NZ$171.1m), with debtor days at 50.8 against a four-period mean of 47.1. Receivables grew faster than revenue, which understates the cash pressure beneath a reported operating cash flow that looks steady.

Pre-lease free cash flow of NZ$392.1m sits above Annolyse's historical baseline mean of NZ$339.7m, helped by capex stepping back to NZ$197.3m from NZ$234.5m (3.7% of revenue). The full-year dividend was 172 cents per share on the same annual basis. This matters because cash output rose while earnings fell — capital intensity, not operating gearing, is doing the work.

Management commentary attached to the release flags an improved second half: H2 PBT of NZ$219.2m versus H1 PBT of NZ$131.7m, and "improving returns" called out for the USA. That shape is consistent with the implied H2 EBITDA of NZ$429.4m and H2 NPAT of NZ$157.6m inferred from the half-year context, so 64% of full-year PBT sat in the second half.

The gap that matters is whether the H2 run-rate persists into FY27. The release does not quantify the USA recovery in dollar terms, so the durability of the second-half rebound rests on management commentary rather than disclosed forward work.

Pre-lease FCF/NPAT of 156.2% looks strong, but it was assisted by a NZ$37.2m reduction in capex and a working capital line that consumed NZ$107.5m. If the receivables build is structural (collection cycles elongating with customer mix), the cash position is harder to repeat; if it reverses, FY27 cash would be supported.

Cash conversion versus EBITDA carries a basis-discontinuity caveat in this release because lease and borrowing presentation has shifted, so the ratio should not be read as a clean like-for-like trend versus prior periods; the more reliable read is that absolute operating cash was steady at NZ$589.4m while earnings fell, and the H2 PBT recovery to NZ$219.2m is the most durability-positive signal. Segment margin compression in Transport and the Air & Ocean revenue decline suggest the headline H2 rebound is not yet broad-based.

This briefing cannot assess underlying volume trends, pricing, or country-level profitability detail because segment commentary in the release is qualitative rather than quantified.