Operating cash fell 32.6% even as revenue grew 13.3%

The statutory loss narrowed sharply — PBT improved 85.9% to -$23.3m and NPAT improved 85.6% to -$22.1m — but management attributes the swing to "stabilisation of property valuations in the second half", meaning less-negative revaluation rather than stronger cash earnings.

Capex moderated to $177.2m (from $264.1m) but still left free cash flow pre-lease at -$97.6m. Gross borrowings rose 7.1% to $1.3b while total equity fell 6.2% to $2b, taking net debt to approximately $1.3b. NTA per share is $1.29 and the final dividend component announced was 1.7 cps.

OCF fell $38.5m even as gross operating revenue rose $29.1m. For a property issuer where distributable cash drives sustainable distributions, this gap is a more important read than the narrower statutory loss. The supplied materials do not explain the divergence, so the cause — incentives, interest cost timing, or working-capital movements — is unresolved.

Leverage moved against the balance sheet. Borrowings rose $87.9m while equity fell $135.8m. The newly refinanced $700m syndicated facilities provide capacity, but debt-funded capex against negative FCF erodes future flexibility if valuations soften again. Capex intensity remained elevated at 71.5% of revenue.

Dividend not covered by generated cash. The payout ratio versus FCF pre-lease is -27.7% (FCF was negative), meaning distributions are being funded from balance-sheet capacity rather than operating cash. ROE improved to -1.1% from -7.0%, but remains negative because revaluations still drag the bottom line.

HY24 NPAT was +$15.3m, implying second-half NPAT of approximately -$37.4m — the second half was materially weaker than the first, consistent with smaller but still-negative revaluations after the H1 stabilisation point. Revenue was distributed roughly evenly (48.8% H1, 51.2% H2).

Management cites capital-partner transactions with a total sales value of $431m and continued execution on the living strategy, but no AFFO or distribution target is provided. The release supports a qualitative read that valuations are stabilising; it does not support a clean quantitative read on FY25 cash earnings.

The cleaner economic read is PBT (still a loss of -$23.3m, +85.9%) set against operating cash flow falling 32.6%. The combination — better statutory result, weaker cash result — argues against weighting the loss-narrowing as the headline.

Within the segments, investment properties (83.5% of revenue, result up to $141.6m from $133.0m) carries the result. Flexible space held flat at $8.2m, hotel and hospitality lost a slightly larger -$0.6m, and the new investment-management line contributed $7.9m of revenue and $1.3m of result — a higher-quality fee stream, but too small to move the dial. Receivable days remain modest at 11.3, suggesting the OCF deterioration is not driven by debtor stretch.

This briefing cannot assess portfolio cap rates, weighted average lease term, occupancy, or the specific line-item drivers of the operating cash flow decline because they are not disclosed in the supplied materials.