Free cash flow swings to +NZ$188m as EBITDAF nearly doubles

That capex compression, as much as earnings, explains the FCF milestone. Operating EBITDAF nearly doubled, rising 94.1% to NZ$88.3m, while revenue grew 12.5% to NZ$855.6m. PBT loss narrowed 17.5% to –NZ$177.6m, and the NPAT loss narrowed 60.8% to –NZ$171.3m — though the NPAT improvement is heavily distorted by a tax line swing and is not a clean read of operational progress.

Operating cash flow declined 18.6% to NZ$334.0m despite stronger EBITDAF, reflecting changed settlement timing and ORA cash flows within the retirement-living model. Gross borrowings fell NZ$105.4m to NZ$1.6b.

The swing from –NZ$94.2m to +NZ$188.3m is a genuine inflection in capital discipline following the FY25 equity raise and balance-sheet reset, but NZ$313.5m of the improvement comes from the capex step-down rather than cash earnings. As capex normalises toward a growth programme, the FCF level is unlikely to be sustained at this magnitude without a commensurate EBITDAF uplift.

EBITDAF momentum is credible but leverage remains constraining. EBITDAF growing 94.1% to NZ$88.3m — supported by the cost-out programme and improved DMF pricing on new contracts — is the clearest signal of underlying operating progress. However, net debt to EBITDAF at 17.8x (down from 36.7x in FY25) remains extremely high, meaning even modest shortfalls in unit sales or care revenue could pressure covenant headroom. The leverage ratio improvement is almost entirely denominator-driven.

PBT is the cleaner earnings read; NPAT is distorted. The 60.8% NPAT improvement overstates operating progress because the prior-period tax line reflected an effective rate of –102.8%, while the current period sits at 3.5%. PBT, which narrows 17.5% to a still-material loss of –NZ$177.6m, is the more meaningful comparison — and it confirms that Ryman remains substantially loss-making on a statutory basis despite the transformation progress.

Management has referenced FY29 targets and a refreshed capital management framework, but the specific numeric targets for the forward period are not disclosed in this release. The second-half of FY26 generated NZ$48.2m of EBITDAF against NZ$40.1m in the first half, confirming a modest 2H weighting — consistent with the company's characterisation of improving sales momentum through the year.

What this result does support is a trajectory of narrowing losses and improving cash generation, but the distance to statutory profitability at the PBT line remains large at NZ$177.6m. Achieving breakeven PBT at current EBITDAF run-rates requires substantial further reduction in finance costs and/or revaluation drag, neither of which is mechanical from here.

The 12.5% revenue growth is supported by both the aged-care segment (NZ$563.3m) and the retirement-living segment (NZ$283.9m), though prior-period segment bases are not fully comparable due to reporting reclassification.

The FCF quality is more nuanced. Operating cash flow of NZ$334.0m fell 18.6% despite the EBITDAF uplift — an OCF-to-EBITDAF ratio of 378.2% reflects the ORA and resident-loan cash flows that are structurally included in operating cash flows under the retirement-living model, rather than straightforward earnings conversion. The capex reduction from NZ$535.3m to NZ$221.8m is real and deliberate but also means the development pipeline is running at a reduced pace, which limits future ORA inflows and earnings potential. The balance sheet direction is positive — equity of NZ$4.1b and declining gross debt — but net debt of NZ$1.6b at 17.8x EBITDAF leaves little structural flexibility.

This briefing cannot assess whether the refreshed strategy's FY29 targets are achievable without the underlying unit-sales volume, occupancy, and development-pipeline assumptions that have not been publicly disclosed.