MPG FY25: EBITDA halved to $5.6m as leverage climbed to ~10.8x

What changed

Revenue fell 10.6% to $213.9m, with New Zealand down to $133.9m (from $159.6m) while Australia was broadly flat at $80.1m. EBITDA (pre-IFRS 16) almost halved to $5.6m from $12.3m, and the group moved to an operating loss of $0.6m from a $7.2m operating profit. The reported NPAT loss narrowed to $13.5m from $27.5m, but this improvement sits uncomfortably against a sharply weaker operating trend. Operating cash flow collapsed to $2.1m from $18.9m, and net debt rose to $60.5m from $53.0m despite a 14.9% reduction in trade debtors. Equity fell 27.4% to $35.6m.

What matters

• Leverage has moved into stressed territory. Net debt/EBITDA rose to roughly 10.8x from 4.3x as EBITDA more than halved and gross borrowings increased $7.4m to $67.0m. Management has explicitly flagged that debt is too high for this stage of the cycle, and the prior Board's mooted AGG sale to deleverage remains unresolved.
• H2 trading deteriorated materially. HY25 delivered $114.1m of revenue and $9.2m of EBITDA, so the implied second half was only $99.8m of revenue and a negative $3.6m EBITDA. The full-year NPAT loss of $13.5m also implies an H2 loss of roughly $8.5m, worse than the $5.0m H1 loss.
• Segment mix has worsened where it matters most. New Zealand — the dominant revenue source at 62.6% of group — swung to a $2.9m segment loss from a $1.3m profit. Australia stayed profitable but earnings fell from $6.8m to $2.6m, removing the offset that previously supported group profitability.

Expectations

No quantified FY26 guidance, forward-order book, or stated target was provided in the release excerpts. Management commentary was cautious, citing weak demand, an uncertain outlook, and the continuing need to reduce debt, and noted that operating and cost-out improvements were not expected to fully offset the revenue decline. Against the HY25 shape context, the result confirms that H2 was weaker than H1 on every operating line — a deterioration, not stabilisation. The release does not support a view on the timing of any recovery and does not re-state or quantify any deleveraging pathway.

Quality of result

Earnings quality weakened on multiple fronts. Cash conversion deteriorated sharply: OCF/EBITDA fell to 37% from roughly 154%, and OCF of $2.1m was well below the reported EBITDA of $5.6m — a direct signal that the headline earnings figure is not being validated by cash. This happened even though receivables fell $5.0m and inventories were essentially flat, meaning working capital was a source of cash, not a user; the cash shortfall sits elsewhere (interest, tax, and items not disclosed in the supplied excerpts). The NPAT loss narrowed by $14.0m despite EBITDA falling $6.7m and operating profit falling $7.8m, so the year-on-year NPAT improvement is likely driven by the absence of prior-period significant items (FY24 included restructuring and impairment charges) rather than any durable operating gain. PBT and tax were not disclosed, preventing a cleaner operating read.

Unresolved

• What is the covenant and refinancing position at 10.8x net debt/EBITDA, and what remediation is available if trading does not improve?
• Is the AGG divestment still on the table as a deleveraging route, and on what timeline?
• What were the specific uses of cash that took OCF from $18.9m to $2.1m despite favourable working-capital movement?
• Is the New Zealand segment loss structural (volume, price, Highbrook plant issues) or one-off, and what is the Australian outlook given its margin compression from ~8.5% to ~3.2%?
• No capex, free cash flow, PBT, or FY26 target was disclosed, so this briefing cannot assess the group's free-cash-flow profile, its ability to self-fund capex, or a quantified deleveraging pathway.

Key metrics

Segment breakdown

Analytical metrics

This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. 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.