PBT loss narrowed 49.5% while NPAT swung to a loss on tax normalisation

PBT actually improved 49.5%, with the pre-tax loss narrowing from $2.9m to $1.4m, because below-EBITDA charges (depreciation, amortisation and finance costs) fell by roughly $3.0m. The prior-period effective tax rate of 122.8% reflected a large tax credit that flipped a PBT loss into a reported NPAT profit; this year's 16.1% rate produced only a small benefit, so the cleaner operating read is PBT.

Revenue fell 8.4% to $56.6m and EBITDA fell 17.2% to $7.3m, compressing EBITDA margin to 12.8% from 14.2%. Operating cash flow rose 10.9% to $7.1m, the group ended with $1.8m of cash (versus zero), gross borrowings were broadly flat at $9.0m, and net debt/EBITDA held at 1.0x.

Reading PBT rather than NPAT, the loss almost halved despite an 8% revenue decline, driven by lower D&A and finance costs. The 336.0pp gap between PBT growth and NPAT growth comes entirely from the tax line normalising; investors who anchor on the headline NPAT swing will miss that operating economics moved in the right direction at the pre-tax line.

EBITDA margin compressed about 140bps but remains historically strong. At 12.8%, EBITDA margin sits at the upper edge of the company's historical range (Annolyse's four-period baseline averages -29.4% with a -147.8% to 14.2% range). The business has run loss-making at EBITDA in earlier periods, so although margin contracted year-on-year, the absolute level continues to validate the cost-control and venue-mix work management has been doing.

Leverage continued to strengthen. Net debt/EBITDA of 1.0x sits below the historical baseline (three-period mean 2.28x), and the move from zero cash to $1.8m alongside flat gross debt means the balance sheet absorbed the EBITDA decline without leverage stress. This matters because the 8% revenue decline did not force defensive financing or working-capital release.

The shape of the year is, however, distinctive: HY25 revenue was up over 40% on a depressed HY24 base, yet full-year revenue fell 8.4%, which implies H2 revenue of roughly $27.6m against an unusually strong H2 FY24. EBITDA was second-half weighted at the group level (H1 contributed only 43.2% of full-year EBITDA), so second-half profitability held up better than second-half revenue.

The gap that matters is the second-half revenue decline against last year's stronger comparable. The release attributes this to "reduced [activity per] head" but does not quantify volume, mix or pricing components, leaving the underlying demand trajectory into FY26 unclear.

OCF/EBITDA of 97.7% is within Annolyse's historical normal range (four-period mean 74.7%, range 1.2%–116.2%) and improved from 73.0% in the prior period. Pre-lease free cash flow of $5.8m is essentially flat on the prior $5.9m despite EBITDA falling, helped by minimal working-capital movement (debtor days 0.5, inventory days 5.6, both near prior levels) and a low capex base.

The caveats sit on the income statement, not the cash flow. Capex jumped 174.7% to $1.3m (2.3% of revenue versus 0.8%), so the cash-conversion comparison was assisted by an unusually low prior-year reinvestment level. Reported NPAT carries a clear tax-line distortion versus the prior comparable, which is why the briefing leans on PBT and EBITDA for the operating read. ROE of -7.0% sits at the upper edge of the historical range but has weakened from a positive 3.5%, and the worsening reflects the same tax-driven NPAT swing rather than a deterioration in capital productivity.

This briefing cannot assess the underlying volume, pricing and venue-level economics behind the second-half revenue decline because the release does not disclose them.