Revenue +21.9% but attributable NPAT fell 7.8% as minorities doubled

PBT grew 5.1% to NZ$45.3m while attributable NPAT fell 7.8% to NZ$26.1m because minority interests roughly doubled to about NZ$9.0m from NZ$4.3m. Tax was not the driver: the effective rate eased to 22.5% from 24.4%. Global Proteins (the renamed Food Ingredients division) drove the revenue lift, with segment revenue up 52% and result almost doubling to NZ$30.5m on a derived margin of 20.1% (15.5% prior). Horticulture revenue fell to NZ$117.3m, lowering its share from 50.2% to 37.9%. Net debt collapsed to NZ$3.2m from NZ$22.3m, taking net debt/EBITDA to 0.06x — below the supplied historical range of 0.77x to 1.33x.

1. Revenue share moved from 39.3% to 49.0% and segment result nearly doubled to NZ$30.5m, lifting derived margin to 20.1%. This matters because growth is materially above the historical pattern, but the doubling in minority interests indicates a meaningful share of the incremental profit is accruing outside the parent.

2. The PBT/NPAT gap is structural, not tax-driven. PBT growth of 5.1% and continuing-operations profit growth of 7.5% (NZ$32.6m to NZ$35.1m) is the cleaner operating read; the 12.9pp gap to attributable NPAT growth is minority interests. For someone valuing the equity claim, headline operational momentum overstates what the parent earned.

3. Balance sheet is materially stronger. Net debt of NZ$3.2m and 0.06x EBITDA leverage — below the supplied historical range — combined with light capex at 1.7% of revenue, provides clear capital headroom to fund the stated Global Proteins growth strategy. ROE of 13.4% remains at the upper edge of the historical range despite easing from 14.7%.

The supplied second-half shape from HY21/FY21 shows the first half captured 49.3% of full-year revenue but 76.1% of EBITDA and 105.2% of NPAT — the second half is materially weaker for earnings. Mechanically annualising current revenue at NZ$618.6m therefore over-states the likely full-year outturn for earnings rather than revenue. Management describes results as "in line with expectations" but the release supports no specific FY22 number. The gap matters because, on the prior-year shape, second-half NPAT can approach breakeven absent operational change, and consensus modelling needs to handle that seasonality rather than extrapolating the first half.

PBT growth (5.1%) reflects underlying performance unaffected by tax distortion; the effective rate moved favourably. The NPAT decline is driven by ownership economics rather than operating deterioration or one-offs — no non-recurring items are flagged in the supplied data.

Cash conversion of -54.2% (OCF/EBITDA) sits at the lower edge of the supplied historical range (-78.4% to -4.2%) but actually improved from -64.7% in HY21, so first-half cash absorption is consistent with the seasonal pattern rather than a deterioration. Inventory days of 22.8 are within the historical range, and debtor days of 0.3 remain below the historical baseline. Pre-lease free cash flow of -NZ$35.8m is in line with the historical first-half shape (mean -NZ$31.6m).

The strengthened balance sheet (0.06x leverage) is not flattering reported earnings — interest costs are not artificially compressing or supporting the result, and the deleveraging itself looks structural given borrowings fell to NZ$39.4m from NZ$53.3m. ROE remains near the top of the historical range despite the attributable NPAT decline.

This briefing cannot assess the durability of Global Proteins margin expansion or the operational drivers of the Horticulture revenue decline without segment commentary or production data beyond what is supplied.