NPAT down 91.3% as prior fair-value gains lapse; rental result stable

Strip that tailwind and the rent-collecting business looks stable, with reported revenue of $88.4m (+67.7%). The effective tax rate jumped from 4.3% to 33.5% — Annolyse's historical baseline marks this unprecedented and consistent with the absence of non-taxable valuation movements this period.

Operating cash flow fell 34.4% to $26.2m. Pre-lease free cash flow of $18.9m (against $29.4m prior) still sits at the upper edge of the company's historical range. Gross borrowings barely moved at $602.7m; equity rose 12% to $1.56bn. The interim cash dividend held flat at 1.8c per share.

Contract rent reviews delivered an average 4.8% uplift on $28.7m of rent reviewed in the half, and new leases ran 15.6% above previous contract rents. Only 3.9% of contract rent is due to expire in H2 2022. For an industrial property vehicle, these are the metrics that drive durable distributable earnings, and they imply the portfolio is still pricing higher.

Cash conversion direction is down even though the absolute level remains healthy. OCF fell 34.4% while reported revenue rose 67.7%, which means cash earnings are not scaling with the revenue base. Pre-lease FCF is still at the upper edge of the company's historical range (mean -$1.0m), but the year-on-year trajectory matters because the dividend is set against current cash generation, not against the historical low base.

Payout coverage tightened. Payout against pre-lease FCF rose to 48.3%, classified above the company's normal range, versus 30.8% in HY21. The dividend remains covered, but coverage is materially less comfortable than the prior comparable suggested.

The property sector frame anchors the read in occupancy, rent reversions, weighted average lease term, gearing and debt headroom — most of which are not surfaced in the canonical figures.

Second-half shape from HY21/FY21 shows roughly balanced halves on revenue (HY21 was 48.5% of FY21) but front-loaded NPAT (HY21 was 60.4% of FY21) because fair-value uplifts were timing-dependent. That seasonality is not a useful guide here, because the FY21 second half also absorbed the Carlaw Park divestment. Annualising HY22 revenue gives $176.9m versus FY21 of $108.7m, so the portfolio has scaled materially, but the gap suggests the like-for-like comparison is not clean.

Equity grew 12% on essentially unchanged borrowings, meaning asset growth was equity-funded rather than debt-funded — a leverage-strengthening result on the balance-sheet side.

The cash-flow read is less comfortable. OCF down 34.4% while revenue rose materially is a divergence the canonical disclosures do not explain. Working-capital movements, trade debtors and receivable days are not surfaced. Without that, it is not possible to determine whether the cash gap is timing (lease incentives, rates, prepayments) or something more structural. The dividend is still covered by pre-lease FCF at a 48.3% payout, but coverage compression matters because the dividend is the principal economic claim retail holders are buying.

This briefing cannot assess occupancy, weighted average lease term, gearing ratio, cap-rate assumptions, or FFO — all central to a property issuer's read but not surfaced in the supplied canonical figures.