Table of Contents
What changed
Revenue rose 5.0% to $1.4b, but the P&L inverted below the top line. EBITDA fell roughly 78% to $37.3m, PBT swung from a $101.9m profit to a $39.2m loss (-138.4%), and NPAT went from $75.2m to a $28.5m loss. Operating cash flow collapsed to $15.9m from $105.5m (-85%), while capex of $116.2m left pre-lease free cash flow at about -$100.3m. Gross borrowings eased to $492.9m (from $529.6m) after an equity raise lifted total equity 26.5% to $767.1m, but net debt of roughly $476.9m against a much smaller EBITDA base pushed net debt/EBITDA from about 3.1x to 12.8x. Trade receivables jumped 82.4% to $101.2m, with receivable days extending from about 15.6 to 27.0. Within segments, Nutritionals/ingredients/fresh milk (83.2% of revenue) posted a segment loss of $28.8m, while Cheese/butter/yoghurt was roughly break-even.
What matters
- Earnings quality deteriorated beyond what NPAT shows. PBT fell $141.1m year-on-year; the NPAT loss was smaller only because a $10.7m tax benefit replaced FY20's $26.7m tax expense. PBT is the cleaner operating read, and it is worse than the headline loss.
- The damage is concentrated in H2. HY21 delivered $47.7m of EBITDA and $6.4m NPAT; the implied second half therefore produced roughly -$10.4m EBITDA and -$34.8m NPAT. The full-year outcome is a second-half event, not a uniformly weak year.
- Leverage is the binding issue. Net debt/EBITDA at 12.8x (vs 3.1x) combined with negative pre-lease FCF and a stretched receivables book means the balance sheet has absorbed the shock that the P&L describes. Management's explicit priorities — releasing cash from inventory and improving working capital — confirm this is where the pressure sits.
Expectations
No quantified guidance or target was disclosed, so there is no stated shape to measure against. The HY21 annualised run-rate of about $1.3b came in below the $1.4b delivered, meaning revenue held up into H2, but profitability did not. Management framing is qualitative: confidence in strategy, a new CEO, structural alignment, and "a plan to return to robust profitability" — none of it underwritten by a number in this release. The filing supports a reset narrative but does not support any specific FY22 earnings or cash recovery path.
Quality of result
Low. The modest 5.0% revenue print masks a materially weaker operating result once tax is normalised, and the cash statement confirms the deterioration rather than offsetting it: OCF/EBITDA fell from ~62% to ~43%, receivable days nearly doubled, and pre-lease FCF was -$100.3m versus -$33.7m prior. The segment detail points to a structural rather than cyclical issue — the dominant nutritionals segment, not a peripheral line, is where the loss sits. Cash conversion deterioration is direct and material and should be flagged as such. The balance sheet improvement in gross debt and cash reflects the equity raise, not operating performance.
Unresolved
- What drove the H2 swing in the nutritionals segment specifically — volume, pricing, cost absorption, or a one-off write-down — is not quantified in the supplied data.
- The $45.7m receivables build is not attributed (customer, timing, or credit), and inventory days cannot be computed because FY21 cost of sales was not separately disclosed, leaving the working-capital diagnosis incomplete.
- Covenant headroom at 12.8x net debt/EBITDA is not disclosed; neither is the extent to which the equity raise has pre-funded the recovery period.
- No FY22 guidance, phasing, or quantified recovery milestones are provided, so the pace of the "return to robust profitability" is unverifiable.
This briefing cannot assess customer concentration, covenant terms, or FY22 trading, as none are disclosed in the supplied data.
Key metrics
| Metric | FY21 | FY20 | Change |
|---|---|---|---|
| Revenue | $1.4b | $1.3b | +5.0% ↑ |
| EBITDA | $37.3b | — | — |
| Net profit after tax | −$28.5m | $75.2m | -137.8% ↓ |
| Net cash inflow from operating activities | $15.9m | $105.5m | -85.0% ↓ |
| Operating profit | −$17.7m | $123.3m | -114.3% ↓ |
| Profit before tax | −$39.2m | $101.9m | -138.4% ↓ |
| Cash and cash equivalents | $16.0m | $5.9m | +172.1% ↑ |
| Total assets | $1.6b | $1.5b | +8.4% ↑ |
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Nutritionals, ingredients, fresh milk | $1.1b | — | −$28.8m | n/a |
| Cheese, butter, yoghurt | $229.0m | — | $0.4m | n/a |
Analytical metrics
| Metric | FY21 | FY20 | Context |
|---|---|---|---|
| Effective tax rate | n/m (loss period) | 26.2% | current loss period |
| OCF / EBITDA (cash conversion) | 42.5% | 62.3% | deteriorated |
| FCF pre-lease | −$100.3m | −$33.7m | −$66.6m |
| FCF / NPAT | 352.6% | -44.8% | complementary conversion metric |
| Capex % revenue | 8.5% | 10.7% | — |
| Capex | $116.2m | −$139.2m | +$255.4m |
| Debtor days | 27.0 | 15.6 | +11.4 days |
| Operating working capital | $372.2m | $324.9m | +$47.3m absorbed |
| Trade debtors | $101.2m | $55.5m | +$45.7m |
| Net debt | $476.9m | $523.7m | −$46.8m |
| Net debt / EBITDA | 12.80x | 3.10x | Weakening |
| Gross borrowings | $492.9m | $529.6m | −$36.7m |
| Payout ratio vs NPAT | 0.0% | — | — |
| Payout ratio vs FCF pre-lease | 0.0% | — | covered |
| ROE (annualised) | -4.1% | 13.7% | Weakening |
| HY21 share of FY21 revenue | 48.6% | — | Other half was 51.4% |
| HY21 share of FY21 EBITDA | 127.9% | — | Other half was -27.9% |
| HY21 share of FY21 NPAT | -22.4% | — | Other half was 122.4% |
| Profit from continuing operations | −$28.5m | $75.2m | −$103.7m |
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.