Revenue grew to NZ$1.3m but losses persisted as borrowings quadrupled

Operating cash outflow narrowed to NZ$1.5m from NZ$1.9m.

The balance sheet moved sharply. Cash rose to NZ$2.2m from NZ$0.5m, but borrowings stepped up from NZ$0.4m to NZ$1.8m (a 4.5x lift), so the underlying net cash position is only around NZ$0.4m. Total equity fell to NZ$5.8m from NZ$6.3m, and inventories more than doubled to NZ$0.7m. Total assets of NZ$8.7m sit below Annolyse's historical baseline, where the mean across the three prior comparable periods was NZ$22.4m within a range of NZ$10.0m–NZ$29.1m.

The headline cash uplift looks reassuring at face value but is almost entirely a borrowings story: gross debt rose by roughly NZ$1.4m while cash rose by NZ$1.6m. This matters because the operating business is still consuming NZ$1.5m a half and the cushion is now a leveraged one rather than an equity-funded one.

Operating losses continue to erode the equity base. Equity has fallen by NZ$0.4m over the period and the asset base of NZ$8.7m is meaningfully below the supplied historical range. For a medicinal-cannabis issuer still in commercial ramp, this combination – revenue traction without earnings traction – means the runway question is now driven by debt capacity rather than retained capital.

Working capital absorbed cash even as receivables improved. Inventory more than doubled (up NZ$0.4m, with inventory days rising from 84.8 to 93.0), which sits alongside a sharp drop in receivable days from 159.1 to 50.8. The inventory build is consistent with the disclosed product launches and German/UK expansion, but it commits cash ahead of confirmed sell-through.

The release describes continued execution of a "capital-light strategy anchored in genetics and distribution" with product launches and German and UK market activity, but does not put numbers around H2.

The supplied seasonality shape is awkward: in FY25, HY25 represented only 36.5% of full-year revenue but 52.1% of full-year NPAT (because the second-half loss was smaller). Annualising HY26 revenue gives roughly NZ$2.7m, which would imply meaningful further H2 revenue growth, but the FY25 NPAT of -NZ$3.46m means the half-year loss run-rate needs to fall, not just hold, to materially improve the full-year outcome.

Receivable days collapsed from 159.1 to 50.8, releasing cash that had been tied up in HY25, while inventory days drifted up. Strip out the receivables tailwind and the underlying operating burn looks closer to flat than to materially improved, which is consistent with the loss before tax sitting essentially unchanged on a non-comparable basis.

The cash position at NZ$2.2m looks healthier than HY25's NZ$0.5m, but it is a debt-funded cushion. Net cash of approximately NZ$0.4m is only marginally above the NZ$0.15m net cash position a year earlier, and the lift in gross borrowings means future operating cash deployment now competes with debt servicing and repayment. The revenue ramp is the genuinely positive signal here, but the durability of that ramp – and whether the inventory build converts to sales rather than write-down – is not yet evidenced in this result.

This briefing cannot assess product-level demand signals, channel sell-through, regulatory pipeline progress, or the specific terms attached to the new borrowings.