PBT up 59.9% on margin expansion; NPAT growth of 264% flattered by tax

Despite the slower top-line, EBITDA grew 25.9% to NZ$95.9m and PBT grew 59.9% to NZ$47.5m, both reflecting genuine margin expansion. Headline NPAT of NZ$32.0m was up 263.6%, but that comparison is amplified by a prior-period effective tax rate near 70% versus 32.7% in FY25, making PBT the cleaner operating read. Net debt fell to NZ$100.3m from NZ$137.3m, dropping net debt/EBITDA to 1.05x from 1.8x. The final dividend was lifted to 25cps (from 5cps), with total FY25 dividends of 30cps.

1. Post-harvest operations — 62.9% of revenue — saw derived gross margin lift from 26.6% to 37.9%, and Australian operations from 3.8% to 21.7%. This matters because the EBITDA and PBT uplift came from operational and mix gains rather than a revenue surge, which makes the result harder to repeat without a similar margin step-up in FY26.

2. NPAT growth of 263.6% overstates the underlying improvement. The prior-year effective tax burden was unusually heavy (around 70%) and FY25's 32.7% sits within the company's normal historical range. The 59.9% PBT lift is the more honest operating signal; the 263.7-percentage-point gap between PBT and NPAT growth is essentially a tax-base normalisation effect.

3. Balance sheet strengthened materially alongside the dividend lift. Gross borrowings fell 14.7% to NZ$119.6m and net debt/EBITDA halved to 1.05x. ROE rose to 10.7% from 3.3%, above the historical 3-year mean of 0.0%. The payout ratio versus NPAT lifted to 32.9%, above the historical 7.9% mean, but remained well-covered by pre-lease FCF (18.2% FCF payout ratio).

Operational disclosures (47m NZ kiwifruit trays packed, up 10%; Australian volumes up 25%) provide volume context but no quantified forward-work indicator. HY25 contributed 48.4% of full-year revenue but only 38.0% of EBITDA and 32.8% of NPAT, confirming a heavily second-half-weighted earnings shape consistent with the harvest cycle. The central uncertainty is whether the step-up in post-harvest gross margin to 37.9% holds in a year that may not benefit from the same volume and mix conditions.

Working capital was a tailwind: trade debtors fell 22.8% to NZ$13.6m and debtor days compressed to 11.2 from 15.6, below the historical range of 15.6-27.1 days. That favourable balance-sheet movement contributed to FCF and warrants a sustainability question.

The underlying earnings quality looks reasonable. The PBT improvement is anchored in segment gross-margin expansion rather than tax, working-capital release, or one-off items (none disclosed). Capex rose 15.4% to NZ$21.1m (4.8% of revenue), suggesting continued reinvestment behind operational gains. The principal durability question is segment-mix-driven rather than accounting-driven: how much of post-harvest's 11.3-percentage-point gross-margin lift reflects structural automation and efficiency gains versus a favourable harvest year.

This briefing cannot assess whether the post-harvest margin expansion reflects durable structural gains or favourable harvest-year economics that will not repeat.