Table of Contents
What changed
Revenue fell 3.3% to $1,365.4m and profit before tax collapsed 55.5% to $9.8m from $22.0m, with operating profit down 47.8% to $16.9m. Reported NPAT fell a softer 19.7% to $8.9m because the effective tax rate rose to 38.3% from 24.7%, so PBT is the cleaner operating read. Segment mix explains most of the earnings decline: Apples, still about 62% of revenue, saw segment result drop to $40.6m from $52.1m (margin ~4.8% vs ~6.0%), and International Trading swung to a $12.4m loss from a $2.3m profit on revenue shrinking 27.7%. T&G Fresh was broadly stable. The balance sheet moved in the opposite direction: gross borrowings fell to $43.2m from $101.1m and cash rose to $59.0m, flipping the group from net debt of $56.5m to net cash of ~$15.8m. Operating cash flow was essentially flat at $55.4m.
What matters
- Core earnings quality weakened where it counts. Apples margin compression and a swing to loss in International Trading together account for the bulk of the PBT decline. These are operating outcomes, not one-offs disclosed in the supplied data, so the 55.5% PBT drop is the more meaningful read than the 19.7% NPAT figure distorted by a higher tax rate.
- Leverage direction is clearly positive. Gross borrowings were almost halved and the group is now in net cash, which materially de-risks the balance sheet into a period of stated operating headwinds. Total equity rose 10.4% to $573.6m.
- Free cash flow thinned. Pre-lease FCF fell to $6.3m from $15.1m as capex rose to $49.1m (3.6% of revenue) from $41.2m (2.9%). OCF/NPAT cover remained high at a headline level, but after capex the cash cushion is narrow.
Expectations
No quantified forward work or medium-term targets were disclosed in the supplied excerpts, and no explicit FY22 guidance was provided, so this release cannot be benchmarked against stated ambitions. Seasonality context shows HY21 contributed only 47.8% of full-year revenue and 38.5% of full-year NPAT, consistent with a second-half-weighted shape driven by the apple harvest cycle; the implied H2 NPAT of $5.5m on $713.4m of revenue was thin in absolute terms. Management commentary flags COVID-related labour shortages and sizing/volume pressure in apples plus global supply chain disruption, which frames the result but is not quantified in the supplied data.
Quality of result
The earnings decline looks operationally driven rather than timing-driven: Apples margin and International Trading losses are the mechanical explanations, and no non-recurring adjustments were disclosed. Cash conversion did not deteriorate at the OCF line, but working capital absorbed cash — receivable days rose to ~6.3 from ~1.3 and inventory days to ~12.2 from ~10.3 — which flatters headline OCF less than it first appears given the small absolute receivable base. Note a discrepancy worth flagging: the narrative excerpts cite NPAT of $13.6m (prior $16.6m) while the statutory accounts show $8.9m (prior $11.1m); the briefing uses the statutory figures, but the gap between headline commentary and audited numbers is itself a quality consideration. The balance-sheet improvement is real cash-and-debt movement, not accounting reclassification.
Unresolved
- What drove the apples margin compression beyond labour and sizing — pricing, cost inflation, or mix — and is any of it structural?
- Is the International Trading loss a one-year dislocation or does it require a business-model response?
- What explains the gap between the $13.6m NPAT cited in the narrative bullets and the $8.9m in the statutory income statement?
- With capex running at 3.6% of revenue, what is the forward capex envelope, and does pre-lease FCF of $6.3m constrain capital returns?
- No dividend, payout ratio, NTA per share, customer concentration, or FX sensitivity disclosures were provided in the supplied data.
This briefing cannot assess segment-level forward order books, detailed cost walks, or the durability of the net cash position beyond the balance-sheet date, because the supplied excerpts do not contain that information.
Key metrics
| Metric | FY21 | FY20 | Change |
|---|---|---|---|
| Revenue | $1365.4m | $1412.6m | -3.3% ↓ |
| Net profit after tax | $8.9m | $11.1m | -19.7% ↓ |
| Net cash inflow from operating activities | $55.4m | $56.3m | -1.6% ↓ |
| Operating profit | $16.9m | $32.4m | -47.8% ↓ |
| Profit before tax | $9.8m | $22.0m | -55.5% ↓ |
| Cash and cash equivalents | $59.0m | $44.7m | +32.1% ↑ |
| Total assets | $984.3m | $980.7m | +0.4% ↑ |
Reference: annolyse.ai/briefings/tgg-fy21
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Apples | $851.4m | $875.2m | $40.6m | +0.4pp |
| International Trading | $129.2m | $178.7m | −$12.4m | -3.2pp |
| T&G Fresh | $365.5m | $357.7m | $18.0m | +1.5pp |
| VentureFruit™ | $18.9m | — | $2.3m | n/a |
| Other | $0.3m | $0.9m | −$31.6m | 0.0pp |
Reference: annolyse.ai/briefings/tgg-fy21
Analytical metrics
| Metric | FY21 | FY20 | Context |
|---|---|---|---|
| PBT growth | -55.5% | — | cleaner earnings measure |
| Effective tax rate | 38.3% | 24.7% | — |
| FCF pre-lease | $6.3m | $15.1m | −$8.8m |
| FCF / NPAT | 70.6% | 136.5% | complementary conversion metric |
| Capex % revenue | 3.6% | 2.9% | — |
| Capex | $49.1m | −$41.2m | +$90.3m |
| Debtor days | 6.3 | 1.3 | +5.0 days |
| Inventory days | 12.2 | 10.3 | +1.9 days |
| Trade debtors | $23.4m | $4.9m | +$18.5m |
| Net debt | −$15.8m | $56.5m | −$72.2m |
| Gross borrowings | $43.2m | $101.1m | −$57.9m |
| ROE (annualised) | 1.6% | 2.1% | Weakening |
| HY21 share of FY21 revenue | 47.8% | — | Other half was 52.2% |
| HY21 share of FY21 NPAT | 38.5% | — | Other half was 61.5% |
| Profit from continuing operations | $8.9m | $11.1m | −$2.2m |
Reference: annolyse.ai/briefings/tgg-fy21
This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX company announcements. The underlying data is extracted from official company filings and verified against source documents. 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.