EBITDA margin hit an unprecedented -4.5% with FCF at -NZ$195.0m

Reported EBITDA swung to a NZ$34.7m loss from a NZ$63.1m profit, with management quoting underlying EBITDA of NZ$4.1m after non-recurring items.

Pre-lease free cash flow of -NZ$195.0m sits below the historical range (mean -NZ$71.4m, prior range -NZ$158.1m to NZ$71.3m). Operating cash outflow widened to NZ$183.4m from -NZ$12.0m. Working capital absorbed NZ$76.6m, at the upper edge of the historical range (mean -NZ$5.5m), and debtor days reached 46.6, above the historical baseline of 17.5 days.

Continuing-operations revenue was NZ$777.6m; the company's announcement quotes NZ$949m including the North Island assets now classified as discontinued (NZ$8.8m after-tax loss).

Segment result fell from NZ$58.8m to NZ$7.4m on broadly flat revenue (NZ$265m vs NZ$274m), with derived gross margin compressing from 21.5% to 2.8%. Consumer grew (NZ$247m from NZ$164m, result NZ$22.8m from NZ$18.7m) and Foodservice turned positive, but neither offset the high-margin Advanced Nutrition reversal; Ingredients result also fell to NZ$1.5m from NZ$14.3m.

The cash drain is being absorbed by debt. Gross borrowings rose to NZ$504.4m from NZ$440.9m, and the company's announcement quotes net debt of NZ$472.1m, an 88% increase. Equity fell to NZ$717.6m from NZ$796.7m, so balance sheet capacity is materially tighter entering the recovery roadmap.

Working capital pressure is the cleaner read than headline cash conversion. Inventory grew 22.1% to NZ$423.7m, debtor days are 29.1 days above the historical baseline, and the cash conversion ratio carries denominator-distortion and basis-discontinuity flags due to negative EBITDA. The NZ$76.6m operating working-capital absorption itself is the more analytically reliable signal of pressure.

Second-half shape context from FY25 is not analytically useful because that year included an exceptional loss event that drove full-year NPAT to -NZ$182.1m, so HY25's positive contribution does not establish a normalised pattern for HY26.

The release supports a recovery framework ("Stabilise, Simplify, Grow") anchored on the North Island asset sale, but none of those steps is sized in the supplied materials. It does not support any read on the cadence at which underlying EBITDA returns toward the historical 6.5% mean margin. The implied NZ$38.8m gap between reported and underlying EBITDA suggests management views that amount as non-recurring, but the bridge is not itemised here.

PBT growth and NPAT growth percentages are not analytically meaningful given the basis discontinuity and small prior-period denominators, and the current effective tax rate of -8.7% sits within the historical range, so the tax line is not distorting the read; the operating result itself drove the loss.

The cash story is harder to flatter. With operating outflow of NZ$183.4m against an EBITDA loss of NZ$34.7m, conversion ratios are denominator-distorted, but the absolute NZ$76.6m working-capital movement sits at the upper edge of the supplied historical range. Inventory build and debtor stretch look more consistent with weaker trading conditions through the half than with timing items that would reverse mechanically in 2H absent volume or pricing recovery.

This briefing cannot assess customer concentration, contracted forward volumes, or covenant headroom from the materials supplied.