EBITDAF tripled to $45.5m but NPAT loss widened to -$436.8m

Free cash flow finished at -$94.2m, worse than -$52.5m in FY24.

Operating EBITDAF improved to $45.5m from $14.8m as cost actions ($23m of annualised reductions removed in 2H25 per the release) and pricing model changes flowed through. But the reported loss expanded materially: PBT deepened to -$215.4m from -$144.9m, and NPAT swung to -$436.8m from a slim $4.8m profit, driven by $172.9m of impairment losses partly offset by a $169.2m positive fair-value movement on investment properties. Comparability between periods is affected by basis changes referenced in the supporting disclosures, so growth percentages on revenue, PBT, and NPAT are not analytically clean.

Gross borrowings fell $860.5m (-33.8%) to $1.7b. Cash dropped to $17.7m from $41.8m. ORA sales were 1,523, broadly flat against the FY24 record of 1,574.

Capital raise adds balance-sheet context, with NZ$721m capital raised, but borrowings and gearing are the direct leverage evidence.

EBITDAF tripled in absolute terms to $45.5m, but with capex at 70.4% of revenue and OCF down 37.7%, the business consumed cash. The economic test is whether EBITDAF can scale fast enough to fund development internally, not whether the cost base has stabilised.

The NPAT loss reflects non-cash items rather than operating collapse. PBT loss deepened to -$215.4m but EBITDAF rose to $45.5m, so the gap is depreciation, imputed interest on resident deposits, impairments, and fair-value movements. The reported effective tax rates (-102.8% current, 103.3% prior) are themselves distorted by the loss position, so the tax line is not a useful signal. Tracking EBITDAF and PBT together is the cleanest way to read the operating arc.

Working capital and cash position weakened sharply. Trade debtors built to $22.1m from negligible levels (receivable days lifted to 10.6 from zero), and the cash balance fell to $17.7m. With FCF at -$94.2m and capex still elevated, operational liquidity remains tight even after the deleveraging visible on the balance sheet.

The second-half shape was heavily skewed: H1 revenue of $366.3m versus implied H2 of $394.4m (close to balanced), but H1 NPAT of +$94.4m flipped to an implied H2 loss of -$531.2m as impairments concentrated in 2H. H1 OCF of $282.8m fell to implied H2 OCF of $127.5m.

Per release commentary, sales contracting improved through 4Q25 and pricing model changes are intended to deliver a step change in DMF on new contracts. The release supports an improving operating direction into FY26 but does not specify what EBITDAF level is sustainable or when FCF is expected to turn positive.

The EBITDAF improvement is partly durable - the $23m of annualised cost reductions disclosed for 2H25 should carry into FY26 - but several drags continue. Capex remained elevated through year-end, receivables built materially, and the 21.6% FCF/NPAT ratio reflects how heavily NPAT is shaped by non-cash impairments and fair-value movements rather than recurring earnings power.

The deleveraging visible on the balance sheet (gross borrowings down $860.5m) reflects external capital action rather than operating cash generation; OCF alone could not have produced this paydown. Net debt at $1.7b against $45.5m of EBITDAF leaves the business highly capital-dependent, and conventional leverage ratios are too distorted by the depressed earnings base to present as a clean signal. ORA sales steady at 1,523 versus the FY24 record of 1,574 indicate demand is intact but not yet growing into the cost base.

This briefing cannot assess management's underlying assumptions for occupancy ramp, pricing realisation under the changed DMF model, or the timing of land monetisation against disclosed valuations.