Revenue up 20.3% but NPAT fell 27.9% on horticulture margin collapse

The top-line growth came almost entirely from Logistics, where segment revenue jumped from NZ$51.7m to NZ$123.3m (a 9.85pp lift in revenue share to 19.9%). Horticulture revenue fell to NZ$228.9m from NZ$243.4m and its segment result dropped to NZ$17.0m from NZ$20.7m on a 7.4% margin, reflecting Chinese lockdowns hitting apple price realisations during critical sales windows.

Operating cash flow lifted 12.6% to NZ$44.9m and the group ended the year in a NZ$27.0m net cash position (versus NZ$2.9m net debt), supported by NZ$68.1m of cash. The final dividend was cut to 3.5cps (the second instalment of the FY22 total) from 9.5cps in the prior year.

Headline revenue growth masks the fact that the higher-margin Horticulture business shrank while lower-margin Logistics (5.3% segment margin) more than doubled. Group PBT margin compressed to 7.4%, which sits at the lower edge of Annolyse's historical baseline (mean 10.0%, range 5.3%–15.0%). This matters because the top-line story is mix-driven, not operationally broad-based.

The PBT-to-NPAT gap is not a tax story. PBT fell 6.0% but NPAT fell 27.9%, a 21.9pp gap. The effective tax rate on group PBT actually declined to 16.2% from 23.9%, which sits within the historical range (mean 18.0%). The driver is non-controlling interest growth from Fern Ridge, Shelby and Fayman, which absorbed a larger share of profit and is not explained quantitatively in the supplied materials.

Balance sheet strengthened into a cyclical downturn. Net debt/EBITDA at -0.39x sits below the supplied historical range (mean 0.11x, prior 0.04x), giving the group meaningful flexibility to absorb the disclosed Cyclone Gabrielle impact in FY23. This matters because trading earnings are visibly under pressure.

The supplied first-half context shows the result was front-loaded: 1H22 carried 82.3% of full-year EBITDA and 134.2% of full-year NPAT, implying a second-half EBITDA of NZ$12.1m and an NPAT loss of NZ$6.6m. The second-half deterioration in apples, combined with cyclone exposure to Hawke's Bay orchards, makes the FY23 starting point materially weaker than the headline FY22 numbers suggest.

Cash conversion of 65.5% improved on the prior 55.6% but remains within Annolyse's recent normal range (mean 85.8%, range 55.6%–120.5%), so the OCF lift is not a structural step-up. A NZ$25.2m operating working-capital build sits within the supplied historical range but is driven by trade debtors +51.1% to NZ$36.2m and inventory +43.9% to NZ$42.6m, which extended debtor days to 21.3 (from 17.0) and inventory days to 25.1 (from 21.0).

Pre-lease FCF of NZ$30.3m comfortably covered the cash dividend (FCF payout 16.4%), but the figure sits at the lower edge of the historical range (mean NZ$47.3m). ROE compressed to 5.0% from 6.9% and is below the historical baseline (mean 9.7%), so the durable read on earnings power is weaker than the cash position implies. The dividend reduction is consistent with managing payout against an under-earning year rather than a defensive cash decision.

This briefing cannot assess the standalone valuation impact of the cyclone or the recoverable amount of any damaged orchard or inventory assets, which are not quantified in the supplied disclosures.