Table of Contents
What changed
Revenue rose 11.3% to NZ$140.9m and operating EBITDA rose 13.9% to NZ$16.6m, with gross margin held at 26%. Below EBITDA the picture inverted: PBT fell 37.5% to NZ$6.1m and NPAT fell 43.3% to NZ$4.4m, driven by higher depreciation/financing below the EBITDA line, one-off strategic review costs cited by management, and a step-up in the effective tax rate to 26.4% from 19.3%.
The balance sheet and cash flow moved more sharply than the P&L:
- Operating cash flow swung from +NZ$26.0m to -NZ$7.7m, a NZ$33.7m reversal.
- Capex more than tripled to NZ$5.1m (3.6% of revenue versus 1.2%), giving pre-lease FCF of -NZ$12.8m versus +NZ$24.5m.
- Cash fell to NZ$13.5m from NZ$30.0m; gross borrowings nearly doubled to NZ$34.2m from NZ$17.2m.
- Net cash of NZ$12.8m became net debt of NZ$20.7m, or ~1.25x operating EBITDA.
Geographic mix shifted modestly toward Australia (+4.9pp) and Europe (+2.3pp) at the revenue line, while the three core sectors delivered 85% of group revenue (up 8pp). The interim dividend was lifted to 5.0cps from 4.0cps.
What matters
- PBT is the cleaner read, and it is still down 37.5%. The tax rate step-up widens the NPAT gap but does not create it; operating leverage below EBITDA deteriorated, with strategic review costs flagged but unquantified. PBT growth of -37.5% against EBITDA growth of +13.9% is the key tension in the result.
- Cash conversion collapsed. Operating cash flow of -NZ$7.7m against EBITDA of NZ$16.6m is a cash-to-EBITDA ratio of -47%, versus +179% in HY23. Receivable days actually improved (46.4 from 51.5) and inventory days were flat, so the cash outflow is not explained by the working-capital items disclosed here and points to other movements (payables unwind, contract balances, or one-offs) not broken out in the excerpt.
- Capital allocation looks stretched. The 25% dividend lift, a near doubling of borrowings, and a tripling of capex were all funded while operating cash flow was negative. Dividend payout was 90.9% of NPAT and not covered by FCF in the half.
Expectations
No quantified forward-work, order-book or revenue/earnings target was disclosed in the extracted excerpts; the Scott 2025 strategy has simply been extended to 2027 without numeric anchors. Against FY23 shape, HY23 was close to a 50/50 split on revenue, EBITDA and NPAT, so seasonality alone does not suggest a strong second-half rebound is implicit. Annualising HY24 revenue gives NZ$281.7m, ~5.3% above FY23's NZ$267.5m, which supports the top-line growth story but says nothing about whether PBT margins re-expand once strategic review costs anniversary out. The release does not provide the figures needed to test a full-year earnings trajectory.
Quality of result
Mixed, and skewed toward lower quality than the headline revenue and EBITDA growth imply. The EBITDA result is genuine in that gross margin held at 26% on 11.3% higher revenue, but the step from EBITDA to PBT, and from accounting profit to cash, both widened materially. Strategic review costs are flagged but not quantified, so the "underlying" PBT cannot be reconstructed from the excerpt. The operating cash outflow is not explained by the receivable or inventory movements disclosed, and the combination of higher capex, higher borrowings and a larger dividend means the cash position is being rebuilt via the balance sheet rather than earnings in this half. Segment margin mix is also unfavourable: Americas is now 34.8% of revenue but contributing only ~2% margins, while higher-margin New Zealand and China remain smaller.
Unresolved
- What was the dollar quantum of the one-off strategic review costs, and are further costs expected in H2?
- What drove the NZ$33.7m swing in operating cash flow given that disclosed receivables and inventory days improved or were flat?
- Why did the effective tax rate rise from 19.3% to 26.4%, and is this the new run rate?
- Is the jump in capex tied to a specific multi-period programme, and what is the FY24 capex envelope?
- With a 90.9% NPAT payout, negative FCF and net debt now at 1.25x EBITDA, what is the board's view on dividend sustainability if H2 cash conversion does not normalise?
This briefing cannot assess the order book, customer concentration within the three core sectors, or any quantified H2 or FY24 outlook, as none of those were disclosed in the supplied extracts.
Key metrics
| Metric | HY24 | HY23 | Change |
|---|---|---|---|
| Revenue | $140.9m | $126.5m | +11.3% ↑ |
| EBITDA | $16.6m | $14.6m | +13.9% ↑ |
| Net profit after tax | $4.4m | $7.8m | -43.3% ↓ |
| Net cash inflow from operating activities | −$7.7m | $26.0m | -129.7% ↓ |
| Interim dividend per share | 5.0c | 4.0c | +25.0% ↑ |
| Profit before tax | $6.1m | $9.7m | -37.5% ↓ |
| Cash and cash equivalents | $13.5m | $30.0m | -55.0% ↓ |
| Total assets | $255.8m | $241.6m | +5.9% ↑ |
Reference: annolyse.ai/briefings/sct-hy24
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| New Zealand | $29.3m | $24.6m | $16.4m | +1.3pp |
| Australia | $24.8m | $16.1m | $0.0m | +4.9pp |
| Americas | $49.0m | $41.2m | $1.0m | +2.3pp |
| Europe | $47.8m | $40.1m | $6.2m | +2.3pp |
| China | $7.4m | $4.5m | $1.5m | +1.7pp |
Reference: annolyse.ai/briefings/sct-hy24
Analytical metrics
| Metric | HY24 | HY23 | Context |
|---|---|---|---|
| PBT growth | -37.4% | — | cleaner earnings measure |
| Effective tax rate | 26.4% | 19.3% | — |
| OCF / EBITDA (cash conversion) | -46.5% | 178.7% | deteriorated |
| FCF pre-lease | −$12.8m | $24.5m | −$37.2m |
| FCF / NPAT | -288.1% | 312.5% | complementary conversion metric |
| Capex % revenue | 3.6% | 1.2% | — |
| Capex | −$5.1m | −$1.6m | −$3.5m |
| Debtor days | 46.4 | 51.5 | -5.1 days |
| Inventory days | 46.9 | 47.2 | -0.3 days |
| Operating working capital | $72.2m | $68.6m | +$3.6m absorbed |
| Trade debtors | $35.9m | $35.8m | +$0.1m |
| Net debt | $20.7m | −$12.8m | +$33.4m |
| Net debt / EBITDA | 1.25x | -0.88x | Weakening |
| Gross borrowings | $34.2m | $17.2m | +$17.0m |
| Payout ratio vs NPAT | 90.9% | — | — |
| Payout ratio vs FCF pre-lease | -31.6% | — | not covered |
| ROE (annualised) | 3.9% | 7.4% | Weakening |
| 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 | $4.5m | $7.8m | −$3.4m |
| Discontinued operation after tax | — | $0.0m | — |
Reference: annolyse.ai/briefings/sct-hy24
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.