Revenue grew an unprecedented 20.2% but operating cash flow rose 2.7%

Annolyse's historical baseline puts revenue growth at 1.3%–9.8% over the prior five interim periods (mean 5.0%), so this print is unprecedented for PFI's recent history and is supported by NZ$46.2m of contract rent reviewed at a 7.3% annualised uplift, plus a portfolio that now sits at NZ$2.3b of total assets (also above the historical range).

Reported profitability followed: PBT rose 78.5% to NZ$54.8m and NPAT rose 62.8% to NZ$46.9m. Both numbers absorb NZ$17.1m of fair value gains on revalued properties — non-cash items that flow through statutory profit but not operating cash flow.

Operating cash flow grew only 2.7% to NZ$28.7m. Capex of NZ$29.4m exceeded OCF, taking pre-lease free cash flow to -NZ$0.8m versus +NZ$0.4m in HY25. Gross borrowings climbed 10.3% to NZ$768.1m, lifting net debt by roughly NZ$71m to NZ$765.4m.

Revenue growth of 20.2% sits well above the supplied historical range of 1.3%–9.8%, while OCF growth of 2.7% sits in line with normal rental cadence. The gap matters because it signals that much of the headline revenue uplift is being absorbed by higher financing costs and timing in receipts rather than dropping into distributable cash.

Fair value revaluations are doing meaningful work in the P&L. The disclosed NZ$17.1m fair value gain accounts for roughly 31% of PBT. Strip it out and underlying PBT growth is far more modest than the 78.5% headline suggests. For a property issuer, the cleaner read on operating performance is OCF and rent-review economics — the 7.3% annualised uplift on NZ$46.2m of reviewed rent is the durable signal here.

Leverage is rising into a development pipeline. Borrowings increased NZ$71.8m and total liabilities grew 10.6%, faster than the 5.9% rise in equity. Capex at 40.0% of half-year revenue, plus the reclassification of a NZ$100m tranche to Green debt, points to ongoing development funding. This matters because dividend cover from cash earnings is thinning even as the Board lifted FY26 dividend guidance.

Annualising current half revenue gives roughly NZ$147.2m, materially above FY25's NZ$127.5m, but the FY outcome will again hinge on H2 valuation movements rather than rents.

The Board has increased FY26 dividend guidance and lifted the declared interim cash dividend to 4.40 cps for the period (the 2.2 cps current-announcement component compares with 2.0 cps in HY25, +10%). No specific dollar earnings target is supplied, so guidance follow-through will need to be judged against H2 rent-review momentum and any further valuation marks.

That is the part of the print investors can compound.

Payout ratio versus pre-lease FCF is suppressed because the source-backed cash-dividend bridge is unavailable.

This briefing cannot assess WALT, occupancy, NTA per share, or gearing-covenant headroom because those disclosures were not present in the supplied extraction.