$14.5m loss and 6.63x leverage trigger dividend suspension

Operating working capital released NZ$-24.5m of cash, materially below the supplied historical average of approximately NZ$-0.1m and the 3-period range of NZ$-5.1m to NZ$+7.9m. That release alone propped up reported operating cash flow of NZ$2.7m. Net debt / EBITDA rose to 6.63x against a historical mean of 2.02x. EBITDA margin compressed to 8.6%, less than half the 17.8% historical mean.

Per the release commentary, revenue was NZ$301m versus NZ$348m in FY22; EBITDA was NZ$26m, down 44% on FY22's NZ$46.1m; gross profit was NZ$48.7m, down 29%. Capex stayed elevated at NZ$22.7m (7.6% of revenue), so free cash flow pre-lease was NZ$-20.1m. Dividends remain suspended.

Net debt / EBITDA at 6.63x is more than three times the historical mean of 2.02x, which means covenant headroom and refinancing terms become first-order questions for the equity. Management has suspended dividends, restructured to lower costs, reduced capex from prior plans, established a captive insurer, and explicitly secured banking support — all consistent with a balance sheet under negotiated pressure rather than business-as-usual.

Cash quality is weak even after a large working-capital tailwind. OCF / EBITDA was 10.3%, below the historical range of 26.3%-86.8% and a fraction of the 65.2% historical mean. The NZ$-24.5m release flatters this measure; without it, operating cash flow would have been deeply negative. Capex of NZ$22.7m drove FCF pre-lease to NZ$-20.1m, so the business is funding itself through the balance sheet rather than earnings.

Underlying earnings turned negative across multiple measures. EBITDA margin was 8.6% (historical mean 17.8%), PBT margin -7.0% (historical mean +6.7%), and NPAT margin -4.8% (historical mean +3.8%). Management attributes the driver to an industry-wide kiwifruit yield collapse, which means recovery depends on grower volumes Seeka does not directly control.

Reported PBT of NZ$-21.0m sits at the better end of that range, so operationally the result met the warning the market was given. There is no explicit forward target for FY24 in the supplied excerpts; the stated strategy emphasises lower cost structure, targeted capex, lower debt, and adequate returns on capital.

HY23 EBITDA was NZ$36.4m, which implies second-half EBITDA of NZ$-10.4m on the FY23 NZ$26.0m total. That gives no comfort the trajectory had stabilised by year-end; the bulk of operating damage hit in H2. Without an FY24 EBITDA or volume target, the release does not support a view that earnings or leverage normalise on a defined timeline — recovery is implicitly tied to crop outcomes management does not control.

Trade debtors fell from NZ$42.7m to NZ$22.3m and inventories from NZ$14.7m to NZ$10.6m — both consistent with lower trading volumes rather than improved collections discipline. Receivable days at 27.1 are above the historical mean of 16.0 days, so the absolute receivables decline is volume-driven, not days-driven, which means the working capital tailwind is largely non-repeatable when volumes recover.

Beneath the working-capital noise, FCF pre-lease of NZ$-20.1m, capex intensity of 7.6% of revenue, and a balance sheet that is NZ$33.9m smaller than a year earlier all point to a business contracting rather than re-investing. The 17.8% historical EBITDA margin baseline implies operating leverage to recover when volumes return, but this result on its own is durable only in the sense that the deterioration is real; the cash inflow papering over it is not.

This briefing cannot assess the FY24 kiwifruit crop outlook, the specific covenant terms with lenders, or the refinancing maturity profile, all of which are central to the equity story.