Profit swing to NZ$13.8m masks operating cash flow halving to NZ$7.3m

Operating cash flow fell to NZ$7.3m from NZ$19.6m, and pre-lease free cash flow turned negative at -NZ$5.0m versus +NZ$11.1m. EBITDA lifted to NZ$24.0m from NZ$5.7m on what management attributes to positive biological performance, alongside higher sales volumes (2,799 MT versus 2,624 MT). Revenue rose to NZ$100.3m from NZ$94.5m.

The prior comparable is a transition half following the year-end change to September, so several growth percentages carry a basis-discontinuity caveat and the prior-period match is inferred rather than exact. Cash on hand fell to NZ$40.2m from NZ$57.4m, with capex stepping up to NZ$12.3m from NZ$8.5m and trade debtors building to NZ$16.3m from NZ$12.2m.

Operating cash flow fell to NZ$7.3m even as EBITDA rose to NZ$24.0m, so current-period cash conversion sits well below Annolyse's historical baseline (3-period mean OCF/EBITDA of 178.7%, range 63.7%–342.6%). The percentage itself carries a basis-discontinuity caveat, but the direction is unambiguous from the absolute cash movement. This matters because the reported earnings recovery has not yet translated into operating cash.

Pre-lease FCF dropped below the recent baseline. At -NZ$5.0m, pre-lease FCF sits below the supplied 3-period range of NZ$10.2m–NZ$11.1m (mean NZ$10.8m). The driver is both higher capex intensity (12.3% of revenue versus 9.0%) and the weaker OCF base. For a capital-intensive aquaculture operator rebuilding biomass, growth capex is now being funded from the cash buffer rather than from operations.

Working-capital build sits inside the normal range, but composition is uneven. The NZ$3.9m operating working-capital movement is within the supplied historical range, yet debtor days rose to 29.7 from 23.5 (above the 26.1-day historical mean) while inventory days eased to 38.2 from 41.0. The receivables stretch is the swing factor and warrants explanation.

The second-half shape against FY25 is structurally not comparable: FY25 covered only 8 months as a transition period during the year-end change, so the implied second-half figures (NZ$23.2m revenue, NZ$1.3m EBITDA) reflect that discontinuity rather than a genuine H2 weighting.

FY26 guidance carried over from the FY25 release sits at pro-forma EBIT of (NZ$3m) to NZ$3m, against which HY26's pro-forma EBIT of NZ$12.3m already exceeds the top of the range. That matters because either guidance is conservative or H2 is expected to give back ground from the strong biological half — and the release does not bridge the two.

The improvement is real at the EBITDA and PBT level — PBT margin of 19.1% sits well above the company's historical range (3-period mean -1.8%) — and management attributes it to biological performance, the right driver for an aquaculture operator. But the gap between reported profit and operating cash is wide, and pre-lease FCF turned negative. The effective tax rate of -27.7% is unusual against the prior 28.4% and the 3-period mean of 30.5%, indicating the tax line includes a benefit (most likely deferred tax recognition tied to the prior loss position). Without that, NPAT would have been lower, so the headline NZ$13.8m slightly overstates the tax-normalised earnings run-rate.

Capex intensity rising to 12.3% of revenue from 9.0% reduces the share of operating profit converting to shareholder cash this period, even where the spend supports biomass recovery. The combination of strong reported earnings, weakening cash conversion, and a step-up in capex argues for treating the result as a biological-cycle high point rather than a new run-rate.

This briefing cannot assess the underlying biological-asset fair-value movements driving the GAAP-versus-pro-forma reconciliation without segment-level disclosure of those non-cash items.