South Port PBT up 10% but capex doubling cut FCF to NZD4.7m

What changed

Revenue rose 6.1% to NZD47.3m and profit before tax lifted 10.0% to NZD14.7m, with NPAT up 13.6% to NZD10.7m. Gross profit was NZD18.8m, leaving gross margin essentially flat at 39.9% (down 28bps). Operating cash flow grew 25.6% to NZD15.8m, but capex almost doubled to NZD11.1m (23.5% of revenue versus 12.3% prior), cutting pre-lease free cash flow to NZD4.7m from NZD7.1m. Gross borrowings increased to NZD9.0m from NZD6.5m and net debt rose to NZD7.4m from NZD5.3m. Trade receivables climbed to NZD9.0m from NZD6.5m, stretching receivable days to roughly 70 from 53. The declared final dividend is 19.5c per share (up from 18.5c); note this is the final component only, not the full-year payout.

What matters

• PBT is the cleaner read. NPAT growth of 13.6% outpaced PBT growth of 10.0% because the effective tax rate eased to 27.0% from 29.4%. The 10% PBT lift better reflects underlying operating momentum.
• Capital intensity stepped up sharply. Capex at NZD11.1m consumed 70% of operating cash flow versus 44% prior. This is the single biggest change in the cash profile and drove the NZD2.4m decline in pre-lease FCF despite stronger OCF.
• Dividend no longer covered by pre-lease FCF. Payout versus pre-lease FCF ran at 108.7% (prior: 68.3%), while payout versus NPAT is still comfortable at 47.8%. The funding gap is visible in the NZD2.5m rise in gross borrowings.

Expectations

No quantitative guidance, forward-work book, or stated targets were provided in the excerpts, so the release cannot be benchmarked against management's own bar. The interim shape shows HY21 delivered 49.4% of full-year revenue but 56.6% of full-year NPAT, implying the second half was softer on the bottom line (NZD4.6m versus NZD6.1m in 1H) despite slightly higher revenue. The release supports a read of revenue resilience and PBT progression, but does not support any claim about a future step-up — the forward capex cycle and its payback are not quantified.

Quality of result

The earnings gain looks operationally sourced rather than one-off: no discontinued operations or non-recurring items were disclosed, and gross margin held within ~30bps. However, two quality caveats apply. First, receivable days extended by roughly 17 days, meaning a meaningful share of revenue sat in debtors at balance date rather than cash — a drag that did not prevent OCF from rising, but is worth monitoring. Second, NPAT flattered by a 230bp drop in the effective tax rate; strip that out and the operational story is PBT +10%, not +14%. EBITDA was disclosed for FY20 (NZD17.8m) but not reconciled for FY21, so the non-GAAP trend cannot be verified from the extracts.

Unresolved

• What drove the doubling in capex, and over what horizon is revenue/EBITDA payback expected?
• Why did receivable days jump ~17 days — a specific large customer, timing at year-end, or a mix shift?
• Is the FY21 dividend increase sustainable given pre-lease FCF no longer covers it, and is management comfortable funding the gap from debt headroom?
• What was FY21 EBITDA, and why was no reconciliation provided when the prior year disclosed it?

This briefing cannot assess volume mix (log, bulk, container), segment-level profitability, or the economics of the step-up in capital expenditure because none of that detail was included in the supplied extracts.

Key metrics

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.