Seeka swings to $29.7m PBT; net debt/EBITDA resets from 6.6x to 1.8x

What changed

FY24 was a clean operational snap-back from the FY23 kiwifruit volume shock. Revenue rose 36.7% to $411.4m, EBITDA rose to $76.1m from $26.0m, and PBT swung to a $29.7m profit from a $21.0m loss. NPAT also turned positive at $8.8m versus a $14.5m loss, though the NPAT improvement (+160.5%) materially lagged PBT growth (+241.6%).

Cash generation re-rated even more sharply. Operating cash flow rose to $66.0m from $2.7m, and with capex lower at $18.3m, pre-lease free cash flow of $47.7m reversed an $20.1m outflow last year. Gross borrowings fell $37.3m to $140.3m, taking net debt to roughly $137.3m and net debt/EBITDA from 6.6x to 1.8x. Post-harvest operations delivered the bulk of the uplift: segment revenue of $246.6m (60% of group) with EBIT margin expanding to about 26.6% from 13.7%. A 5c final dividend was declared, on top of the 10c already paid in January 2025 (15c in full-year distributions, versus nil prior year).

What matters

• Operating recovery is real, but tax distorted the headline NPAT. The effective tax rate was 70.6% versus 31.1% in FY23, which is why NPAT growth fell well short of PBT growth. On a PBT basis the result is cleanly inside management's stated $27.5m–$31.5m range; the NPAT print understates underlying earnings power.
• Deleveraging is the standout balance-sheet move. Gross borrowings fell 21.0% and the net debt/EBITDA reset to 1.8x gives Seeka materially more capital-allocation flexibility than it had entering FY24, when leverage was over 6x.
• Earnings concentration risk in post-harvest is now more visible. Post-harvest EBIT of $65.6m effectively carries the group; orchard operations only modestly turned positive ($2.8m) and "all other segments" remained a $23.9m drag. The group result depends heavily on one segment's margin cycle staying near current levels.

Expectations

Management disclosed a PBT guidance range of $27.5m–$31.5m, and the $29.7m outcome is near the midpoint. No other quantified forward-work or revenue target was provided in the extracted materials, so forward visibility rests on kiwifruit volume assumptions rather than a disclosed order book. HY24 already contained $10.5m of NPAT, implying the second half delivered only around a $1.7m loss despite being the higher-revenue half — consistent with post-harvest cost recovery concentrated in the first half and indicating that FY25 comparisons will be against a high first-half base.

Quality of result

The result looks predominantly durable rather than cosmetic. The cash conversion ratio (OCF/EBITDA) was 86.8% versus 10.3% prior, and pre-lease FCF at $47.7m was 5.5x NPAT — unusually high partly because NPAT is suppressed by the elevated tax charge. Working capital tightened genuinely: receivable days fell to about 15.6 from 27.1 and inventory days to 9.1 from 12.9, so the cash result is partly working-capital-assisted but from healthier operating rhythm rather than stretching payables (payables were not disclosed). Capex intensity dropped to 4.4% of revenue from 7.6%, which helps FCF now but bears watching if sustained underinvestment starts affecting bearer plant development. No non-recurring items were flagged.

Unresolved

• Why was the effective tax rate 70.6%, and is this a one-off (deferred tax recognition, non-deductible items) or a structural feature that will continue to suppress NPAT?
• What is driving the persistent ~$24m loss in the "all other segments" bucket, and is that loss stabilising or structural?
• With leverage reset to 1.8x, what is management's stated capital-allocation framework — further debt paydown, dividend step-up beyond the current 15c, or investment in the loss-making segments?
• Post-harvest margins expanded to ~26.6%; the release does not break out how much reflects volume recovery versus pricing or cost absorption, so the margin sustainability is unclear.

This briefing cannot assess valuation, per-share economics (no NTA disclosed), or how FY25 kiwifruit volume expectations compare to the FY24 base.

Key metrics

Segment breakdown

Analytical metrics

This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. 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.