Table of Contents
What changed
Revenue rose 3.9% to $175.3m, a modest top-line step-up. The operating read is materially stronger: PBT lifted 191% to $10.5m from $3.6m, and disclosed Underlying EBITDA reached $23.5m, up 20%. NPAT swung to a $7.0m profit from a $(8.5)m loss, but most of that $15.5m swing reflects the FY24 tax line rather than operational improvement — the FY24 effective tax rate was an anomalous 335.8% versus 29.4% in FY25, so PBT is the cleaner operating read.
Cash generation improved sharply, with operating cash flow up 42.2% to $20.1m. Gross borrowings fell 7.3% to $70.3m and net debt dropped to $67.7m from $73.5m, taking net debt/Underlying EBITDA to roughly 2.9x from 3.5x. The final dividend was lifted to 0.8cps from 0.7cps.
What matters
- The earnings turnaround is real but narrower than headline NPAT suggests. PBT growth of 191% (off a low base) is the defensible number; the NPAT swing is amplified by a return to a normal tax rate. Underlying EBITDA +20% and EBITDAR per occupied bed of $27.9k (+13%) are the cleanest indicators of operating traction.
- Balance sheet has genuinely strengthened. Net debt down $5.8m, leverage down roughly 0.6 turns, and equity up to $66.5m. This is consistent with the cash outcome, not just accounting: pre-lease free cash flow rose to about $13.7m from $10.0m even with capex intensity stepping up to 3.6% of revenue from 2.5%.
- Dividend remains comfortably covered. The 0.8cps final represents roughly 30.8% of NPAT and only ~15.8% of pre-lease FCF, leaving significant headroom alongside continued debt paydown.
Expectations
No FY26 guidance, forward-work metric, or quantitative target was disclosed in the supplied materials, so the release cannot be benchmarked against management-set milestones.
Against seasonality, HY25 contributed about 48% of FY25 revenue but only 28% of FY25 NPAT and roughly 45% of Underlying EBITDA — FY25 was second-half weighted on the bottom line. Investors should not simply double the HY25 $2.0m NPAT run-rate; the H2 profit step-up (implied ~$5.1m) is what drove the full-year outcome and raises the question of whether H2 operating leverage persists into FY26.
Quality of result
The result looks predominantly durable rather than timing-driven. Operating cash conversion improved to ~85.3% of Underlying EBITDA from 67.5%, and receivables days tightened modestly to 24 from 25.6, so working capital is not flattering the cash number. Pre-lease FCF at 194.7% of NPAT corroborates the earnings base.
Two quality caveats: (i) Underlying EBITDA is stated to be adjusted for the sale of one care home, and the supplied excerpts do not include a full statutory-to-underlying bridge, so the size of non-recurring adjustments is not transparent; (ii) NPAT growth is partly a reversion to a normal tax rate rather than incremental operating profit, which is why PBT (+191%) is the measure to lean on.
Unresolved
- What is the complete reconciliation from statutory profit to Underlying EBITDA ($23.5m) and EBITDAR, including the care-home sale adjustment?
- What drove the FY24 tax expense to exceed PBT (effective rate 335.8%), and is any element capable of recurring?
- What is H2's exit occupancy and EBITDAR-per-bed run-rate, given the pronounced second-half weighting?
- What is the intended use of incremental FCF — further debt paydown, capex (which rose to $6.4m), or distributions — and is there a stated leverage target below the current ~2.9x?
This briefing cannot assess valuation or per-share book-value metrics because NTA per share and share count were not supplied.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $175.3m | $168.7m | +3.9% ↑ |
| EBITDA | — | $20.9m | — |
| Net profit after tax | $7m | −$8.5m | +182.9% ↑ |
| Net cash inflow from operating activities | $20.1m | $14.1m | +42.2% ↑ |
| Final dividend per share | 0.8c | 0.7c | +14.3% ↑ |
| Profit before tax | $10.5m | $3.6m | +191.0% ↑ |
| Total assets | $339.6m | $334.7m | +1.5% ↑ |
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | +191.0% | — | cleaner earnings measure |
| Effective tax rate | 29.4% | 335.8% | — |
| OCF / EBITDA (cash conversion) | 85.3% | 67.5% | stable |
| FCF pre-lease | $13.7m | $10m | +$3.7m |
| FCF / NPAT | 194.7% | -117.5% | complementary conversion metric |
| Capex % revenue | 3.6% | 2.5% | — |
| Capex | $6.4m | $4.1m | +$2.2m |
| Debtor days | 24.0 | 25.6 | -1.6 days |
| Inventory days | 1.2 | 1.2 | +0.0 days |
| Trade debtors | $11.5m | $11.8m | −$0.3m |
| Net debt | $67.7m | $73.5m | −$5.8m |
| Net debt / EBITDA | 2.88x | 3.52x | Strengthening |
| Gross borrowings | $70.3m | $75.9m | −$5.6m |
| Payout ratio vs NPAT | 30.8% | — | — |
| Payout ratio vs FCF pre-lease | 15.8% | — | covered |
| ROE (annualised) | 10.6% | -13.2% | Strengthening |
| HY25 share of FY25 revenue | 48.0% | — | Other half was 52.0% |
| HY25 share of FY25 EBITDA | 45.1% | — | Other half was 54.9% |
| HY25 share of FY25 NPAT | 28.0% | — | Other half was 72.0% |
| Profit from continuing operations | $7.4m | — | — |
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.