Acquisition lifted revenue 73.3% and tripled EBITDA, but loss widened 81.4%

Revenue rose 73.3% to NZ$17.2m, above the company's historical range (Annolyse's three-period revenue-growth baseline averages 5.4%, with a –45.0% to 40.4% spread). EBITDA jumped 207.6% to NZ$2.1m and the EBITDA margin expanded to 12.3%, again above the historical 6.8%–10.7% range.

The bottom line moved the other way. PBT and NPAT both deepened to a NZ$0.8m loss from a NZ$0.4m loss, an 81.4% widening. Operating cash flow swung positive to NZ$1.1m from an outflow of NZ$0.1m, while gross borrowings rose 60.1% to NZ$14.2m and total liabilities rose 73.3% to NZ$40.8m to fund the deal.

Both revenue growth and EBITDA margin sit above Annolyse's historical baseline, but the step-up reflects added hospitality assets rather than organic improvement. The release notes "trading results exceeded initial expectations" and roughly NZ$1.0m of costs taken out, which means the durability test is integration follow-through across the second half rather than the headline growth rate.

EBITDA tripled, yet the loss widened. With the effective tax rate at 0.0% in both periods and no tax distortion, the gap between a NZ$1.4m EBITDA uplift and a NZ$0.3m deeper loss is consumed below the EBITDA line — depreciation and finance costs on the larger asset and debt base. This matters because the operating economics look better while the post-finance-cost shareholder return has not yet improved.

Leverage looks better as a ratio than in absolute terms. Net debt/EBITDA fell to 5.45x, the lower edge of the historical 4.40x–9.80x range (mean 7.23x), but absolute net debt more than doubled to NZ$11.5m on the back of acquisition borrowings. The ratio improvement depends on the new EBITDA run-rate holding.

The FY21 anchor is distorted by a NZ$3.5m loss from discontinued operations, so simple half-of-full-year shape ratios are not informative — second-half-shape implied EBITDA and NPAT figures are not usable signals.

What the release supports is that the acquired hospitality assets, on an early-trading view, are running ahead of management's pre-deal expectations and that operating cash flow has turned. What it does not support is any view on whether the 12.3% EBITDA margin survives a full COVID-affected trading cycle or whether finance costs decline as borrowings amortise.

Cash conversion of 53.5% (OCF/EBITDA) sits inside the historical range (mean 59.4%) and represents a genuine improvement from –20.8% in HY21, when COVID restrictions weighed on trading. Working-capital movement of –NZ$1.0m is within normal historical range, so the OCF improvement is not a working-capital release flattering the result.

However, pre-lease free cash flow was essentially nil (–NZ$0.0m) because capex rose 177% to NZ$1.2m, taking capex intensity to 6.8% of revenue from 4.2%. ROE remains negative at –4.0% (versus –2.2% prior). The economic implication is that the acquisition has delivered EBITDA scale but has not yet produced cash returns to equity holders, and the higher capex run-rate needs to be assessed against whether it is integration spend or a structurally higher reinvestment requirement.

This briefing cannot assess management's internal integration plan, segment-level trading momentum within the half, or any unsupplied forward guidance on margins, capex, or distributions.