Revenue up 10.3% but NPAT fell 8.6% as tax rate jumped to 29.1%

The underlying step is materially smaller than that headline implies: profit before tax only declined 4.1% to NZ$16.5m, with the additional drop concentrated in tax. The effective tax rate rose from 25.2% to 29.1%, a 4.5 percentage-point gap between PBT growth and NPAT growth.

Operating cash flow rose 20.1% to NZ$16.4m, and capex more than halved versus the heavy prior-year build, falling 38.5% to NZ$14.4m. That swung free cash flow pre-lease from –NZ$9.7m to +NZ$2.1m.

Gross borrowings rose from NZ$25.5m to NZ$30.0m, lifting net debt to roughly NZ$29.0m. The board declared a 19.5c final dividend, taking the full-year payout to 27.0c — unchanged versus the prior full year.

PBT fell only 4.1% while NPAT fell 8.6%, with the gap entirely explained by the higher effective tax rate. Management's own normalised profit figure of NZ$11.50m is up 3.1% on NZ$11.16m, consistent with the cleaner PBT read. For an investor, this means the reported earnings drop overstates operating deterioration; the trading result is roughly flat to modestly better.

Free cash flow is positive again, but still does not cover the dividend. Higher OCF and a lighter capex year produced positive pre-lease FCF, a sharp reversal from last year's deficit. Even so, the 27.0c full-year dividend equates to roughly 340.9% of pre-lease FCF and 60.5% of NPAT. The shortfall has been funded with debt — gross borrowings rose NZ$4.5m year-on-year — so distribution funding remains structurally dependent on either lower capex or new earnings, not current cash generation.

Leverage and returns are softening together. Net debt rose roughly NZ$4.8m, while ROE eased from 23.2% to 19.6% as equity grew faster than earnings. Neither move is alarming in isolation, but combined with the FCF gap they point to a balance sheet doing more of the work than last year.

Within the year, the first half delivered 46.5% of revenue and 44% of NPAT, implying a stronger second half (NZ$28.7m revenue, NZ$6.6m NPAT). That shape matters because the headline cargo commentary — container volumes down 18.5%, log volumes down — was a first-half story; the second half evidently recovered enough to lift the full-year revenue print into double-digit growth despite that drag.

PBT held up better than NPAT, working capital eased (receivable days fell from 52.3 to 44.3, trade debtors down NZ$0.5m), and operating cash flow grew faster than either revenue or PBT. That is consistent with a genuine underlying performance, not an accruals-driven one.

Quality weakens at the capital-allocation step. The improvement in FCF this year reflects a much lighter capex year (capex/revenue fell from 48.1% to 26.8%) rather than structurally higher cash generation, which means the FCF/NPAT conversion of 17.8% will move with the capex cycle rather than settle. Holding the full-year dividend at 27.0c while FCF remains a fraction of distributions has been bridged with additional borrowings, so the dividend is currently balance-sheet-assisted rather than cash-funded.

This briefing cannot assess forward earnings trajectory, container and log volume outlook, or the durability of the lower capex year because no guidance, forward-work, or forward dividend indicators were supplied with the release.