PBT swung from $12.2m profit to $0.4m loss on flat revenue

Combined with capex up 79.5% to NZ$10.4m, that drain cut net operating cash flow from NZ$30.4m to NZ$13.3m even as revenue rose 1.6% to NZ$236.1m. PBT swung from NZ$12.2m profit to a NZ$0.4m loss (-103.4%) and NPAT from NZ$8.5m to a NZ$0.5m loss (-105.4%). Group EBITDA before significant items was NZ$24.6m. Within revenue, New Zealand declined 1% to NZ$178.0m on lockdown disruption, while Australia's AGG grew 11% to NZ$58.1m. Gross borrowings rose NZ$9.8m to NZ$65.3m; net debt finished at NZ$52.3m, or 2.1x EBITDA.

Inventory jumped 48.4% to NZ$27.4m, taking inventory days from 29.0 to 42.4, and debtor days drifted to 54.0 (above the historical 48-53 day band). Pre-lease free cash flow fell to NZ$2.9m from NZ$24.6m in FY21, which means headline EBITDA did not translate to cash at the FY21 rate.

Profit swung on margin compression, not revenue. Revenue moved only +1.6%, but EBIT fell from NZ$18.9m to NZ$5.9m as NZ lockdowns and global shipping disruption compressed operating margins. New Zealand — 75.4% of group revenue — drove most of it, with segment result falling from NZ$19.4m to NZ$7.4m on essentially flat segment revenue. That is operating leverage working in reverse.

A tax credit cushioned the bottom line. An effective tax rate of -10.3% versus +30.1% prior means NPAT and PBT moved in lockstep, with NPAT 2.0pp worse than PBT in growth terms. Without the credit the headline loss would have been larger; PBT growth of -103.4% is the cleaner operating read.

The half-year shape is informative: HY22 NPAT was NZ$0.4m on revenue of NZ$116.9m, implying H2 NPAT of -NZ$0.9m on revenue of NZ$119.2m. Revenue was roughly balanced across halves (49.5% H1) but profitability worsened in the second half, consistent with the lockdown and shipping commentary. Pre-lease free cash flow of NZ$2.9m sits within Annolyse's historical NZ$-0.9m to NZ$14.9m range but is well below FY21's NZ$24.6m, so the cash baseline assumed at HY22 — when management flagged intent to resume dividends — has been reset lower. No current-period dividend is disclosed, so resumption appears deferred.

The PBT swing reflects NZ margin compression from lockdowns, and the NZ segment result fell NZ$12.0m on essentially flat NZ revenue — operating leverage in reverse, not an accounting effect.

The cash result is weaker than EBITDA suggests. OCF/EBITDA conversion of 53.9% sits within Annolyse's historical range but well below FY21, and pre-lease FCF only stayed positive because EBITDA was at a cycle high. Three drivers absorbed cash: a NZ$8.9m inventory build, a NZ$1.0m debtor build, and a near-doubling of capex to NZ$10.4m (4.4% of revenue versus 2.5% prior) — none reverses automatically. Gross borrowings rose NZ$9.8m to NZ$65.3m to fund that capex step-up. Net debt/EBITDA at 2.1x is below the historical baseline mean of 6.1x, but the YoY direction is weakening as net debt rose from NZ$48.0m to NZ$52.3m.

This briefing cannot assess management's specific FY23 plans for inventory normalisation, NZ pricing actions, or the conditions under which dividend payments would resume.