Table of Contents
What changed
Revenue fell 7.1% to $94.5m from $101.7m, with sales volumes down from 3,178MT to 2,624MT (-17.4%). Profit before tax swung from a $9.2m profit to a $29.1m loss, and NPAT moved from $6.0m to a $20.8m loss. Prior-period EBITDA of $12.5m is not matched by an equivalent statutory EBITDA disclosure this half; the company discloses pro-forma EBITDA of $5.7m against $13.5m in HY25. Despite the P&L deterioration, operating cash inflow rose 21.2% to $19.6m, cash lifted to $57.4m from $28.3m, and gross borrowings fell to $2.4m, leaving the group in a net cash position of roughly $55.0m. No interim dividend was declared, matching the prior comparable.
What matters
- The loss is dominated by a non-cash fair-value write-down on biological assets/inventory referenced in the release. That is consistent with pre-lease free cash flow holding at about $11.1m (prior $11.0m) despite the statutory swing, and with inventories falling 40.2% to $21.3m. PBT is the cleaner read (prior-period tax rate 34.4% vs a 28.4% credit rate this half), and PBT was still down 417.9%.
- FY26 pro-forma EBITDA guidance of $1–7m has been held but sits dramatically below FY25's $29.7m. The release attributes FY26 harvest volume impact to water temperatures, which is a biological/operational driver rather than a pricing or demand issue and frames the full-year shape.
- Balance sheet is materially stronger: net cash roughly doubled to $55.0m, with no dividend outflow. That liquidity buffer is the main mitigant to the earnings reset.
Expectations
No quantitative revenue or NPAT target was disclosed, but HY25 contributed only 42% of FY25 EBITDA and 45% of NPAT, so the FY25 pattern was second-half weighted. Annualising HY26 revenue gives roughly $188.9m, about 10.5% below FY25's $211.0m. More importantly, the FY26 pro-forma EBITDA guidance of $1–7m versus pro-forma HY26 of $5.7m implies the second half is expected to be roughly breakeven to modestly negative at the pro-forma EBITDA line — a sharp departure from the FY25 H2 shape. The release supports a view that volume headwinds persist through the balance of FY26.
Quality of result
Operating cash flow improvement was driven by a $17.8m reduction in operating working capital (receivable days 23.5 vs 28.1; inventory days 41.0 vs 63.7), not by underlying earnings. Pre-lease FCF of $11.1m was flat year-on-year only because inventory run-down and lower receivables offset weaker trading and higher capex (capex rose to 9.0% of revenue from 5.1%). The statutory loss is largely non-cash (biological asset fair-value write-down), so the P&L overstates the cash impact — but the working-capital tailwind is non-repeatable and the pro-forma EBITDA decline from $13.5m to $5.7m is the underlying operating read. Durable improvement in cash generation is not evident.
Unresolved
- The quantum of the biological-asset fair-value write-down and the full reconciliation from statutory loss to pro-forma EBITDA are not in the extracted material.
- How much of the volume shortfall (2,624MT vs 3,178MT) reflects temperature-driven biological losses versus harvest timing is not quantified.
- No information is provided on pricing per kilogram, channel mix, or whether the $1–7m FY26 EBITDA range already reflects full realisation of the biological loss.
- With inventories down 40.2%, the implications for FY27 harvest availability and cost absorption are not addressed.
This briefing cannot assess underlying farming biology, seawater-temperature trajectory, or management's conviction around the $1–7m guidance band beyond what is stated in the release.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $94.5m | $101.7m | -7.1% ↓ |
| EBITDA | — | $12.5m | — |
| Net profit after tax | −$20.8m | $6m | -447.1% ↓ |
| Net cash inflow from operating activities | $19.6m | $16.2m | +21.2% ↑ |
| Final dividend per share | 0.0c | 0.0c | flat |
| Profit before tax | −$29.1m | $9.2m | -418.0% ↓ |
| Cash and cash equivalents | $57.4m | $28.3m | +102.7% ↑ |
| Total assets | $225.4m | $241.4m | -6.6% ↓ |
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| Effective tax rate | n/m (loss period) | 34.4% | current loss period |
| OCF / EBITDA (cash conversion) | 344.6% | 120.0% | stable |
| FCF pre-lease | $11.1m | $11m | +$0.15m |
| FCF / NPAT | -53.5% | 183.0% | complementary conversion metric |
| Capex % revenue | 9.0% | 5.1% | — |
| Capex | −$8.5m | −$5.2m | −$3.3m |
| Debtor days | 23.5 | 28.1 | -4.6 days |
| Inventory days | 41.0 | 63.7 | -22.7 days |
| Operating working capital | $33.4m | $51.2m | −$17.8m absorbed |
| Trade debtors | $12.2m | $15.7m | −$3.5m |
| Net debt | −$55m | −$25.2m | −$29.8m |
| Net debt / EBITDA | -9.60x | -1.90x | Strengthening |
| Gross borrowings | $2.4m | $3.1m | −$0.77m |
| Payout ratio vs NPAT | 0.0% | — | — |
| Payout ratio vs FCF pre-lease | 0.0% | — | covered |
| ROE (annualised) | -11.4% | 3.1% | Weakening |
| HY25 share of FY25 revenue | 48.2% | — | Other half was 51.8% |
| HY25 share of FY25 EBITDA | 42.0% | — | Other half was 58.0% |
| HY25 share of FY25 NPAT | 45.0% | — | Other half was 55.0% |
| Profit from continuing operations | — | $6m | — |
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.