Horticulture surge lifts EBITDA margin to 23.6%, above historical range

PBT grew 49.0% to NZ$72.7m and NPAT grew 73.0% to NZ$48.6m, a 24.0pp gap explained by an effective tax rate of 20.8% versus 22.0% in the prior comparable period.

Horticulture drove the result, with segment revenue up 44% to NZ$193.8m and segment result up 82% to NZ$40.6m. Logistics revenue nearly doubled to NZ$73.3m. Global Proteins revenue fell 10.8% to NZ$126.4m, though its segment result still edged up to NZ$31.1m.

Net debt fell to NZ$67.5m and net debt/EBITDA improved to 0.77x from 1.33x. Operating cash outflow widened to NZ$9.2m from NZ$2.6m, but capex dropped 78% to NZ$9.7m, so pre-lease free cash flow improved to NZ$-18.9m from NZ$-47.1m.

EBITDA margin of 23.6% and PBT margin of 19.5% both sit clearly above their HY22–HY24 ranges (9.8%–19.3% and 5.9%–15.3% respectively). This is the substance of the result: operating leverage, particularly from Horticulture, has produced a different earnings profile, and management has lifted FY25 guidance on the back of it. The question is whether this represents a new operating level or an unusually favourable apple season.

Mix has tilted further toward Horticulture. Horticulture's revenue share rose to 49.2% from 42.3% as Global Proteins shrank by NZ$15.3m. This concentrates earnings exposure on a single seasonal segment — amplifying upside in strong seasons and downside in weak ones.

Tax-rate tailwind, modest. The effective tax rate of 20.8% sits below the historical 22.0%–22.6% band and contributes to the 24.0pp gap between NPAT growth (73.0%) and PBT growth (49.0%). PBT growth is the cleaner read on operating progress.

The historical second-half shape is critical context: in FY24, HY24 represented 67.1% of full-year EBITDA and 91.6% of full-year NPAT, with implied 2H24 NPAT of just NZ$2.6m. Horticulture is structurally first-half weighted because of the apple harvest, so even a strong 1H25 does not annualise.

The economic question is therefore how much of the 1H25 margin uplift survives into a much smaller 2H25 base. The result clearly sets up FY25 above prior-year run rate, but the magnitude of the lift depends on second-half settings that this release does not quantify.

Operating cash outflow of NZ$9.2m versus NZ$2.6m is the standard 1H working-capital build, and inventory days actually fell to 15.0 from 22.8 — below the historical 22.8–27.5 range — so cash absorption was lighter than usual. Cash conversion of OCF/EBITDA of -10.5% is at the upper edge of the historical -78.5% to -4.2% range and above the -45.6% mean, so the period is not abnormally cash-light despite the YoY decline from -4.2%.

The bigger question is capex. It collapsed 78% to NZ$9.7m (2.6% of revenue versus 14.0% prior), which flatters pre-lease FCF to NZ$-18.9m. Net debt/EBITDA at 0.77x is within Annolyse's historical baseline (0.06x–1.33x). PBT growth of 49.0% on revenue up 16.9% does imply genuine operating leverage, but durability depends on Horticulture pricing and yield dynamics, and on whether capex stays low or simply lapped a HY24 investment peak.

This briefing cannot assess the FY25 guidance figure, the apple-season pricing dynamics behind Horticulture, or the detailed underlying-versus-reported earnings reconciliation.