Table of Contents
What changed
Revenue edged up 1.6% to NZ$236.1m, with Australia (AGG) up 11% offsetting a 1% decline in New Zealand. Beneath that flat top line, profitability collapsed:
- Operating profit fell 68.7% to NZ$5.9m from NZ$18.9m.
- PBT swung to a loss of NZ$0.4m from a NZ$12.2m profit (-103.4%).
- NPAT swung to a loss of NZ$0.5m from NZ$8.5m (-105.4%).
- Net cash inflow from operating activities fell 56.4% to NZ$13.3m from NZ$30.4m.
- Gross borrowings rose to NZ$65.3m from NZ$55.5m; cash improved to NZ$13.1m, leaving net debt higher at approximately NZ$52.3m versus NZ$47.9m.
- Inventories jumped 48.4% to NZ$27.4m; trade debtors broadly stable at NZ$35.0m.
Segment mix tells the story: NZ revenue share slipped about 2pp to 75%, and its EBIT margin compressed to around 4.2% from 10.8%. Australia narrowed its loss but remained loss-making.
What matters
- NZ margin compression is the core read. NZ segment EBIT fell to NZ$7.4m from NZ$19.4m on only a 1% revenue decline, implying significant operating deleverage tied to the stated lockdown disruption and shipping costs rather than a volume collapse. This is a margin problem, not a demand problem.
- Leverage is drifting the wrong way. Gross borrowings climbed NZ$9.8m and net debt rose roughly NZ$4.3m despite the cash balance improving. After FY21's stated 28% reduction in net debt and the signalled intent to resume dividends at the HY22 mark, FY22 has reversed that direction.
- Working capital absorbed cash. Inventory days rose to approximately 42 from 29, an NZ$8.9m build. That is the clearest single driver of the operating cash flow shortfall against prior year and is the main reason cash generation understates the (already weak) earnings base.
Expectations
No numerical FY22 guidance, target, or forward-work balance was supplied in the extraction, so there is no management benchmark to mark against. HY22 context does frame the shape: H1 delivered NZ$0.4m NPAT on NZ$116.9m revenue; implied H2 revenue was NZ$119.2m but implied H2 NPAT was a NZ$0.9m loss. So the second half was weaker than the first on the bottom line despite comparable revenue, indicating the margin pressure flagged at HY22 intensified rather than eased. Management had previously signalled intent to resume dividends alongside HY22 results; the current release shows no declared dividend, consistent with FY22 earnings and cash being insufficient to support that return.
Quality of result
The result is weak in both earnings and cash terms, and the cash side is the softer of the two. Key observations:
- Tax does not distort the read. PBT fell 103.4%, NPAT fell 105.4%, a gap of roughly 2pp. PBT is the cleaner operating measure and confirms the swing to loss is operational.
- No adjusted or non-GAAP earnings metric, and no separately quantified non-recurring items, were disclosed. Lockdown and shipping impacts were described qualitatively rather than ring-fenced, so there is no "underlying" number to lean on.
- Cash conversion deteriorated materially: OCF fell NZ$17.1m year on year, substantially more than the NZ$9.0m NPAT swing, driven largely by the NZ$8.9m inventory build. That build could unwind in FY23 and support cash, but it also carries markdown and obsolescence risk if demand softens.
- FY22 capex was not disclosed in the extraction, so free cash flow cannot be computed this period. FY21 pre-lease FCF was NZ$24.6m; that bridge is not reproducible here.
Overall, little of the FY22 result looks timing-flattered. If anything, the inventory build makes the OCF figure look worse than the underlying run-rate of earnings, but it does not rescue the earnings themselves.
Unresolved
- How much of the NZ margin compression is attributable to lockdown and shipping costs that do not repeat, versus structural cost inflation that persists into FY23?
- What is the trajectory of the inventory build — is it a deliberate supply-chain hedge that will convert to sales, or slow-moving stock?
- What is the FY22 capex figure and therefore true free cash flow, given capex was not disclosed in the extracted data?
- When, and on what earnings and leverage tests, will dividends resume after the HY22 signal was not actioned?
- Australia (AGG) grew 11% but remained loss-making — what is the path to segment profitability, and at what revenue level?
This briefing cannot assess valuation, covenant headroom, or any post-balance-date trading update, as none of that information was provided in the extraction.
Key metrics
| Metric | FY22 | FY21 | Change |
|---|---|---|---|
| Revenue | $236.1m | $232.3m | +1.6% ↑ |
| Net profit after tax | −$0.5m | $8.5m | -105.4% ↓ |
| Net cash inflow from operating activities | $13.3m | $30.4m | -56.4% ↓ |
| Operating profit | $5.9m | $18.9m | -68.7% ↓ |
| Profit before tax | −$0.4m | $12.2m | -103.4% ↓ |
| Cash and cash equivalents | $13.1m | $7.5m | +73.5% ↑ |
| Total assets | $272.1m | $237.9m | +14.4% ↑ |
Reference: annolyse.ai/briefings/mpg-fy22
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| New Zealand | $178m | $179.8m | $7.4m | -2.0pp |
| Australia | $58.1m | $52.5m | −$0.3m | +2.0pp |
Reference: annolyse.ai/briefings/mpg-fy22
Analytical metrics
| Metric | FY22 | FY21 | Context |
|---|---|---|---|
| Effective tax rate | n/m (loss period) | 30.1% | current loss period |
| Capex | — | −$5.8m | — |
| Debtor days | 54.0 | 53.4 | +0.6 days |
| Inventory days | 42.4 | 29.0 | +13.4 days |
| Trade debtors | $35.0m | $34.0m | +$1.0m |
| Net debt | $52.3m | $48.0m | +$4.3m |
| Gross borrowings | $65.3m | $55.5m | +$9.8m |
| Payout ratio vs NPAT | 0.0% | — | — |
| ROE (annualised) | -0.5% | 10.2% | Weakening |
| HY22 share of FY22 revenue | 49.5% | — | Other half was 50.5% |
| HY22 share of FY22 NPAT | -91.3% | — | Other half was 191.3% |
| Profit from continuing operations | −$0.5m | — | — |
Reference: annolyse.ai/briefings/mpg-fy22
This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX 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.