EBITDA up 433% but MOV stays loss-making on a 2.6% revenue decline

The dominant driver was gross margin expansion of 410 basis points to 29.2%, which lifted gross margin dollars 13.4% even as revenue fell 2.6% to $286.3m. Operating cash flow rose to $25.3m from $18.7m, but OCF/EBITDA conversion fell sharply to 60.2% from 236.4% in FY24 — a mechanical consequence of EBITDA normalising upward from a very low base while cash remained constrained.

The segment mix shifted materially. Warehousing revenue contracted from $137.0m to $53.7m (share falling ~28 percentage points to 19%) while Freight and Fuel expanded from $120.7m to $188.8m (share rising ~25 percentage points to 66%). Warehousing swung from a $0.6m profit to a -$5.8m loss; International turned from -$2.2m to +$0.3m; Specialist improved from $0.5m to $2.3m.

The second half showed accelerating EBITDA momentum: implied 2H25 EBITDA of $24.0m was materially ahead of 1H25's $18.1m, and implied 2H25 operating cash flow of $16.4m outpaced the $8.9m in 1H25.

The 410bp margin expansion to 29.2% — the highest in two years per management commentary — demonstrates that cost reduction and mix management are working in the businesses that remain. However, Warehousing posted a -$5.8m result on revenues that have contracted to less than a fifth of group revenue, suggesting either structural volume loss or a business in deliberate wind-down. The economic read depends heavily on whether Warehousing losses are temporary or permanent.

Leverage has improved significantly, but equity is thin. Net debt to EBITDA fell from 2.1x to 0.4x as EBITDA recovered and gross borrowings fell modestly to $23.2m. However, total equity is now just $11.4m — down 58% from $27.2m — because accumulated losses continue to erode the balance sheet. With NTA per share at approximately $0.05, the buffer against further deterioration is narrow.

Capex is negligible, which supports cash generation but raises questions about asset renewal. At $0.2m versus $1.8m in FY24, capex intensity is 0.1% of revenue. This preserves cash in the near term but cannot be sustained indefinitely in a logistics business without impairing operating capability. The pre-lease FCF of $25.1m is real but assisted by minimal reinvestment.

Management commentary characterised the result as delivering on financial targets and expressed confidence about positioning when demand returns, but no specific forward earnings or revenue guidance was provided.

The second-half EBITDA exit rate of roughly $24m in 2H25 versus $18m in 1H25 provides a positive directional signal. Whether that trajectory continues depends on whether the gross margin gains are sticky and on the trajectory of Warehousing, where the current loss rate is material relative to a group that has not yet returned to profitability.

The gross margin expansion is operationally credible, but sustaining it at 29.2% in a continuing weak demand environment is not assured. The 60.2% OCF/EBITDA conversion looks low in isolation; in context it reflects FY24's abnormally high conversion ratio (236.4%) when EBITDA was depressed and working capital released cash. Receivable days improved from 48.2 to 39.5 days and operating working capital contracted $7.8m, which supported cash generation this year but leaves less to release in future periods.

Capex at $0.2m is unsustainably low for a logistics operator. The pre-lease FCF of $25.1m is therefore partially attributable to capex deferral rather than normalised earnings quality, and the metric should be treated with caution as a run-rate figure. No dividend was declared, which is consistent with the continuing net loss position.

This briefing cannot assess the underlying customer concentration, contract tenor, or volume pipeline that will determine whether the gross margin recovery is durable beyond FY25.