Table of Contents
What changed
Revenue rose 9.0% to $109.5m, driven by record log activity and the unwind of 2020 COVID concessions. Profit before tax lifted 8.5% to $31.8m and reported NPAT rose 5.2% to $23.2m, with the slightly slower NPAT growth explained by a higher effective tax rate (27.2% vs 24.9%) rather than any below-the-line item. Operating cash flow improved 18.6% to $34.8m.
The balance sheet, however, moved decisively. Capex jumped to $103.7m (from $45.8m), dominated by 6 Wharf construction. Cash fell from $7.9m to $1.4m and gross borrowings rose from zero to $77.1m, flipping the group from $7.9m net cash to $75.7m net debt. Total assets expanded 24.6% to $480.0m while equity rose just 2.5% to $354.8m. The final dividend was cut to 4.7 cps from 5.0 cps.
What matters
- Leverage inflection. The move from debt-free to $75.7m of net debt within a single year is the most material development. Operating earnings growth of 8.5% at the PBT line is solid, but the balance-sheet direction now dominates the read.
- Capex intensity vs self-funding capacity. Capex ran at 94.7% of revenue, producing pre-lease free cash flow of -$68.9m (prior year -$16.4m). OCF of $34.8m covered only a third of investment, so the 6 Wharf build is explicitly debt- and cash-reserve-funded rather than cash-generated.
- Dividend signalling. Trimming the final dividend 6% while reporting "record" earnings is a tell: the capital program is constraining distributions, even as ROE edged up to 6.5% from 6.4%.
Expectations
No quantified target or forward-work indicator was supplied. Seasonality context shows the year was slightly second-half weighted: HY21 delivered 48% of FY21 revenue and 45.6% of NPAT, implying a 2H run-rate of $56.9m revenue and $12.6m NPAT. The release supports the view that trading momentum carried through 2H21, but it does not support any inference about when 6 Wharf capex rolls off or when earnings will start to reflect the larger asset base. Without a stated EBITDA or return target, the adequacy of current earnings growth relative to the capital being deployed cannot be judged from the filing.
Quality of result
The earnings gain looks genuinely operational: revenue growth was volume- and price-led (record logs, concession unwind), receivable days tightened slightly to 31.6 from 32.1, and OCF grew faster than PBT, indicating no obvious working-capital assistance. There are no disclosed non-recurring items and the non-GAAP "underlying" NPAT of $22.0m sits below reported NPAT of $23.2m, so statutory figures are not being flattered by adjustments.
The qualification is that the cash outcome is balance-sheet-funded, not earnings-funded. A dividend payout calculated against pre-lease FCF is not meaningful when FCF is sharply negative; on NPAT the payout ratio on the final dividend alone is modest, but the distribution is effectively being sustained by new borrowings.
Unresolved
- No EBITDA, net-debt-to-EBITDA covenant headroom, or debt facility tenor/pricing detail was supplied, so the cost and capacity of the new $77.1m debt stack cannot be assessed.
- Remaining 6 Wharf spend-to-complete, commissioning date, and expected incremental revenue/EBITDA from the new wharf are not in the extracted materials.
- No segment split (container vs bulk) or customer concentration disclosure was provided, limiting visibility into how durable the log-led revenue lift is if log cycle conditions normalise.
- No reconciliation between reported NPAT ($23.2m) and underlying NPAT ($22.0m) was supplied.
This briefing cannot assess whether the capital being deployed into 6 Wharf will earn an adequate return, because neither a project IRR, a target EBITDA contribution, nor post-commissioning guidance is disclosed in the supplied materials.
Key metrics
| Metric | FY21 | FY20 | Change |
|---|---|---|---|
| Revenue | $109.5m | $100.4m | +9.0% ↑ |
| Net profit after tax | $23.2m | $22.0m | +5.2% ↑ |
| Net cash inflow from operating activities | $34.8m | $29.3m | +18.6% ↑ |
| Final dividend per share | 4.7c | 5.0c | -6.0% ↓ |
| Cash and cash equivalents | $1.4m | $7.9m | -82.3% ↓ |
| Total assets | $480.0m | $385.4m | +24.6% ↑ |
Analytical metrics
| Metric | FY21 | FY20 | Context |
|---|---|---|---|
| PBT growth | +8.5% | — | — |
| Effective tax rate | 27.2% | 24.9% | — |
| FCF pre-lease | −$68.9m | −$16.4m | −$52.5m |
| FCF / NPAT | -297.4% | -74.6% | complementary conversion metric |
| Capex % revenue | 94.7% | 45.6% | — |
| Capex | $103.7m | $46b | −$45.9b |
| Debtor days | 31.6 | 32.1 | -0.5 days |
| Operating working capital | $9.5m | $8.8m | +$0.6m absorbed |
| Trade debtors | $9.5m | $8.8m | +$0.6m |
| Net debt | $75.7m | −$7.9m | +$83.6m |
| Gross borrowings | $77.1m | $0.0m | +$77.1m |
| Payout ratio vs NPAT | n/m | — | — |
| ROE (annualised) | 6.5% | 6.4% | Strengthening |
| HY21 share of FY21 revenue | 48.0% | — | Other half was 52.0% |
| HY21 share of FY21 NPAT | 45.6% | — | Other half was 54.4% |
| Profit from continuing operations | $23.2m | $22.0m | +$1.2m |
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.