Revenue down 45%; $8m working-capital release flatters cash

Group EBITDA roughly doubled to NZ$0.7m from NZ$0.3m and the NPAT loss narrowed 74.1% to NZ$0.4m from NZ$1.6m.

The cash-flow story is dominated by a NZ$8.0m operating working-capital release. Annolyse's historical baseline shows a mean working-capital movement of NZ$-0.3m across the supplied range, so the release sits well outside the company's normal pattern. Trade debtors collapsed from NZ$4.1m to NZ$0.2m and inventory fell from NZ$4.0m to NZ$1.5m — consistent with the business shrinking rather than collecting faster or destocking by design.

Total equity strengthened to NZ$18.6m, cash rose to NZ$3.7m from NZ$0.4m, and the interim dividend was cut 48.4% to 16c per share.

Both reporting period definitions sit inside corporate events: HY20 included the Hospitality acquisition partway through, and HY21 reflects the issuer transition from Moa to Savor alongside COVID disruption. The headline -45.0% revenue movement therefore overstates underlying decline and the -3 percentage-point shift in NPAT margin (now -4.0%, within the historical -10.1% to -1.4% range) is the cleaner read on the operating result.

The working-capital release is contraction, not efficiency. Inventory days reached 28.1 versus a historical mean of 6.4 days — flagged above the company's normal range — but the days ratio is inflated by the revenue collapse rather than a balance-sheet build. Trade debtors falling 94.7% is the dominant driver, which means most of the NZ$8.0m release is mechanically reversible as trading normalises.

Operating cash conversion was negative despite the release. Net operating cash flow was NZ$-0.1m and OCF/EBITDA of -20.8% sits below the supplied historical 53.5%–117.3% range. Pre-lease FCF of NZ$-0.6m landed at the lower edge of the historical range, and the 48.4% dividend cut to 16c per share is consistent with management protecting cash rather than a signal of earnings quality.

The supplied second-half shape from FY20 shows HY20 contributed 47.1% of FY20 revenue but -17.0% of FY20 EBITDA, implying an H2 EBITDA loss of NZ$2.3m last year as summer trading deepened the result. Management commentary that "trading has continued to improve heading into the Christmas period, with sales above expectations" supports near-term recovery, but the prior H2 EBITDA swing is a useful benchmark for how much hospitality-driven volatility the second half can absorb. The release does not support a quantified FY21 expectation.

None of that translated into operating cash: OCF/EBITDA of -20.8% sits below the company's supplied historical range, and the NZ$8.0m working-capital release was contraction-driven liquidity rather than earnings-quality validation. Capex of NZ$0.4m (4.2% of revenue) was scaled back from the prior period, helping the cash position but reinforcing that the business is conserving rather than investing.

Capital structure is the more durable element. Equity at NZ$18.6m and cash at NZ$3.7m, against gross borrowings of NZ$8.9m, leave net debt/EBITDA at 7.55x — within the supplied historical 4.40x–9.80x range. Leverage is high in absolute terms but the cash buffer looks adequate to absorb the working-capital reversal that the elevated inventory-days reading implies as trade recovers.

This briefing cannot assess the underlying like-for-like operating trajectory because the prior-period Hospitality acquisition, current-period COVID disruption, and Moa-to-Savor issuer transition all sit inside the comparison window.