Table of Contents
What changed
Revenue rose 20.6% to NZD 267.5m and EBITDA rose 24.1% to NZD 29.7m, with operating leverage pushing profit before tax up 28.7% to NZD 19.2m. Reported NPAT of NZD 15.4m is up from NZD 0.1m, but that comparison is entirely distorted by a NZD 12.6m FY22 discontinued-operation loss that did not recur; profit from continuing operations grew a more modest 22.0% (NZD 15.4m vs NZD 12.7m).
Operating cash flow more than tripled to NZD 20.2m from NZD 6.3m, and cash balances rose to NZD 21.4m against gross borrowings of NZD 12.5m. Net debt therefore swung from NZD 3.5m to a net cash position of about NZD 9.0m. Segment mix shifted materially: Europe (+NZD 31.1m) and the Americas (+NZD 29.8m) drove the revenue step-up, while Australia fell NZD 15.1m and New Zealand was roughly flat. The Americas segment returned to profit (NZD 4.0m vs a NZD 1.3m loss). The final dividend is unchanged at 4.0 cps.
What matters
- PBT is the cleaner read on operations. The eye-catching NPAT change reflects the absence of the FY22 discontinued-operation loss, not an underlying earnings step-change. PBT +28.7% on revenue +20.6% is the real operating story, and the effective tax rate lifted to 19.6% from 15.2%, which is a modest drag on reported continuing NPAT growth.
- Balance sheet direction is genuinely stronger. Moving to net cash of ~NZD 9.0m, with EBITDA up 24.1% and equity up 13.4% to NZD 113.9m, materially improves capital flexibility. ROE rebuilt to 13.5% from ~0.1% (the latter distorted by the discontinued-operation loss).
- Mix is rotating toward lower-margin geographies. Europe is now the largest revenue segment at 33.3% but converts at ~9.6%, while the two highest-margin businesses – New Zealand (~47.4%) and China (~41.4%) – together shrank as a share of revenue. Group EBITDA margin only expanded modestly (11.1% from 10.8%), consistent with volume-led rather than mix-led earnings growth.
Expectations
No quantitative guidance, forward-work backlog, or FY24 targets were provided in the excerpts, and no Scott 2025 strategic numerical milestones are disclosed here. The release notes this is the third year of the Scott 2025 strategy but does not re-state measurable targets against which this result can be benchmarked.
On shape, H1 delivered 47.3% of full-year revenue and 49.0% of full-year EBITDA, so the business ran slightly second-half weighted on profit – a fairly benign pattern. There is no anchor period against which to judge run-rate, so the release supports a read that FY23 execution was broad-based across halves, but it does not underwrite any particular FY24 trajectory.
Quality of result
Earnings quality is mixed. The EBITDA-to-PBT bridge and continuing-operations growth look durable and broadly consistent with revenue growth. OCF-to-EBITDA of 68.1% (vs 26.4% in FY22) is a clean improvement, and pre-lease free cash flow of ~NZD 14.7m against continuing NPAT of NZD 15.4m implies ~95% cash conversion on that measure.
Two caveats temper this. First, the second-half operating cash flow was materially negative at roughly –NZD 5.8m (HY23 OCF of NZD 26.0m versus full-year NZD 20.2m), meaning the full-year cash result was front-end loaded and working capital absorbed cash in H2. Inventories grew 22.1% to NZD 38.3m, faster than revenue, while trade debtors grew 9.1%; receivable days improved to 59.5 from 66.0, but operating working capital on a debtors-plus-inventory proxy rose NZD 10.6m. Second, capex stepped up to NZD 5.6m from NZD 2.3m (2.1% of revenue vs 1.0%), so the FCF uplift is partly pre-investment and that base is now higher.
Unresolved
- Why did H2 operating cash flow turn negative despite continued profit delivery, and how much of the inventory build is structural (forward workload) versus a timing mismatch?
- What is order book or forward-work coverage entering FY24? The release as excerpted does not provide one, which limits visibility on whether the 20.6% growth rate is repeatable.
- How durable is the Americas turnaround to a 4.9% margin, given Europe (the largest segment) still earns only ~9.6%, well below New Zealand and China?
- What portion of the higher effective tax rate (19.6% vs 15.2%) is structural, given the geographic mix shift toward Europe and the Americas?
- Is the flat 4.0 cps final dividend a deliberate capital-retention signal alongside stepped-up capex and the NZD 1.2m development-asset spend, or simply policy continuity?
This briefing cannot assess management commentary on pipeline, margin outlook, or any Scott 2025 strategic milestones beyond what the extracted release text contains.
Key metrics
| Metric | FY23 | FY22 | Change |
|---|---|---|---|
| Revenue | $267.5m | $221.8m | +20.6% ↑ |
| EBITDA | $29.7m | $23.9m | +24.1% ↑ |
| Net profit after tax | $15.4m | $0.1m | +17051.1% ↑ |
| Net cash inflow from operating activities | $20.2m | $6.3m | +220.5% ↑ |
| Final dividend per share | 4.0c | 4.0c | flat |
| Profit before tax | $19.2m | $14.9m | +28.7% ↑ |
| Cash and cash equivalents | $21.4m | $8.5m | +152.8% ↑ |
| Total assets | $253.1m | $206.9m | +22.3% ↑ |
Reference: annolyse.ai/briefings/sct-fy23
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| New Zealand | $49.9m | $50.9m | $23.6m | -4.4pp |
| Australia | $41.5m | $56.7m | $5.1m | -10.1pp |
| Americas | $82.3m | $52.5m | $4.0m | +7.0pp |
| Europe | $89.0m | $57.9m | $8.5m | +7.2pp |
| China | $4.9m | $3.8m | $2.0m | +0.1pp |
Reference: annolyse.ai/briefings/sct-fy23
Analytical metrics
| Metric | FY23 | FY22 | Context |
|---|---|---|---|
| PBT growth | +28.7% | — | cleaner earnings measure |
| Effective tax rate | 19.6% | 15.2% | — |
| OCF / EBITDA (cash conversion) | 68.1% | 26.4% | stable |
| FCF pre-lease | $14.7m | $4.0m | +$10.7m |
| FCF / NPAT | 95.0% | n/m | complementary conversion metric |
| Capex % revenue | 2.1% | 1.0% | — |
| Capex | $5.6m | −$2.3m | +$7.9m |
| Debtor days | 59.5 | 66.0 | -6.5 days |
| Inventory days | 52.2 | 51.6 | +0.6 days |
| Operating working capital | $81.9m | $71.3m | +$10.6m absorbed |
| Trade debtors | $43.6m | $40.0m | +$3.6m |
| Net debt | −$9.0m | $3.5m | −$12.4m |
| Net debt / EBITDA | -0.30x | 0.10x | Strengthening |
| Gross borrowings | $12.5m | $12.0m | +$0.5m |
| Payout ratio vs NPAT | 20.7% | — | — |
| Payout ratio vs FCF pre-lease | 21.8% | — | covered |
| ROE (annualised) | 13.5% | 0.1% | Strengthening |
| HY23 share of FY23 revenue | 47.3% | — | Other half was 52.7% |
| HY23 share of FY23 EBITDA | 49.0% | — | Other half was 51.0% |
| HY23 share of FY23 NPAT | 50.7% | — | Other half was 49.3% |
| Profit from continuing operations | $15.4m | $12.7m | +$2.8m |
| Discontinued operation after tax | $0.0m | −$12.6m | +$12.6m |
Reference: annolyse.ai/briefings/sct-fy23
This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX company announcements. The underlying data is extracted from official company filings and verified against source documents. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.