Table of Contents
What changed
Revenue fell 4.4% to $1,304.9m from $1,365.4m. Operating profit rose 20.9% to $20.4m, but below that line the result deteriorated sharply: profit before tax swung from $9.8m to a loss of $3.3m, and NPAT swung from $8.9m to a loss of $5.5m. Operating cash inflow collapsed from $55.4m to effectively nil (‑$0.5m), while capex rose to $100.0m from $49.1m. Cash ended broadly flat at $58.5m only because gross borrowings jumped 241% to $147.5m from $43.2m, moving the group from roughly $15.8m net cash to about $89.0m net debt. Segment mix shifted: Apples shrank to 59.4% of revenue (from 62.3%) with segment result down to $27.8m from $40.6m, T&G Fresh grew to 30.7% of revenue, and VentureFruit™ stepped up materially to $11.0m result from $2.3m.
What matters
- Cash conversion broke down. Operating cash flow fell by $55.8m year on year despite operating profit rising. This is the cleanest signal in the result and is not explained by the reported P&L movement.
- Balance sheet reloaded to fund capex. Gross borrowings more than tripled to fund a doubling of capex (7.7% of revenue vs 3.6%), producing pre-lease free cash flow of roughly ‑$100.4m versus +$6.3m in FY21. Equity rose only 1.1%, so the gearing shift is real rather than cosmetic.
- Earnings quality degraded despite a higher operating profit line. The 20.9% lift in operating profit did not translate to PBT or NPAT, implying finance costs and/or associate/minority effects absorbed the operating gain. On the cleaner PBT measure the swing is ‑$13.1m.
Expectations
No quantified forward work, stated targets, or formal guidance were disclosed in the supplied excerpts, so there is no management benchmark to test the result against. Shape context is available: HY22 delivered 49.5% of full-year revenue but $2.9m of NPAT, implying a second-half NPAT of about ‑$8.4m. The deterioration therefore accelerated into the second half on earnings, even though revenue was close to evenly split. Capex at 7.7% of revenue and the step-up in borrowings suggest an investment phase rather than a maintenance-mode year, but the release does not supply a payback shape or timing.
Quality of result
Low. Three features argue the headline understates the underlying weakening. First, trade receivable days rose to 14.4 from 6.3 and inventories increased 18.4%, so working capital absorbed cash materially. Second, operating profit improved but PBT fell by more than $13m, indicating the improvement at the operating line did not survive finance and non-operating charges — a pattern consistent with higher debt funding costs landing in the current period. Third, the tax line (a $2.5m credit on a $3.3m pre-tax loss, yielding an effective rate of 74.2% that is not meaningful) widened the NPAT loss below PBT, so PBT at ‑$3.3m is the cleaner operating read. VentureFruit™'s step-up from $2.3m to $11.0m is the most positive internal data point, but at 2.2% of revenue it is not yet large enough to anchor group earnings.
Unresolved
- What drove the $55.8m collapse in operating cash flow beyond the visible receivables and inventory build — in particular, the payables movement was not disclosed in the supplied data.
- What the $99.95m capex was spent on, when it is expected to generate returns, and whether the current debt load reflects peak investment or a continuing trajectory.
- Why PBT deteriorated by $13.1m while operating profit rose $3.5m — the finance cost, associate, and non-controlling interest bridge is not provided.
- Whether the "Other" segment loss of ‑$33.6m (vs ‑$31.6m) contains central costs that should be allocated when assessing segment margins.
- No dividend, EBITDA, net debt covenant, or NTA data was supplied.
This briefing cannot assess valuation, covenant headroom, dividend policy, or the return profile of the FY22 capex program, because none of those disclosures were provided in the extraction.
Key metrics
| Metric | FY22 | FY21 | Change |
|---|---|---|---|
| Revenue | $1304.9m | $1365.4m | -4.4% ↓ |
| Net profit after tax | −$5.5m | $8.9m | -161.6% ↓ |
| Net cash inflow from operating activities | −$0.5m | $55.4m | -100.8% ↓ |
| Operating profit | $20.4m | $16.9m | +20.9% ↑ |
| Profit before tax | −$3.3m | $9.8m | -134.1% ↓ |
| Total assets | $1083.4m | $984.3m | +10.1% ↑ |
Reference: annolyse.ai/briefings/tgg-fy22
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Apples | $774.6m | $851.4m | $27.8m | -3.0pp |
| International Trading | $100.7m | $129.2m | −$2.6m | -1.7pp |
| T&G Fresh | $400.5m | $365.5m | $17.8m | +3.9pp |
| VentureFruit™ | $29.1m | $18.9m | $11.0m | +0.8pp |
| Other | $0.1m | $0.3m | −$33.6m | 0.0pp |
Reference: annolyse.ai/briefings/tgg-fy22
Analytical metrics
| Metric | FY22 | FY21 | Context |
|---|---|---|---|
| Effective tax rate | n/m (loss period) | 38.3% | current loss period |
| FCF pre-lease | −$100.4m | $6.3m | −$106.7m |
| FCF / NPAT | n/m | 70.6% | complementary conversion metric |
| Capex % revenue | 7.7% | 3.6% | — |
| Capex | −$100.0m | $49.1m | −$149.0m |
| Debtor days | 14.4 | 6.3 | +8.1 days |
| Trade debtors | $51.3m | $23.4m | +$27.9m |
| Net debt | $89.0m | −$15.8m | +$104.7m |
| Gross borrowings | $147.5m | $43.2m | +$104.3m |
| ROE (annualised) | -0.9% | 1.5% | Weakening |
| HY22 share of FY22 revenue | 49.5% | — | Other half was 50.5% |
| HY22 share of FY22 NPAT | -53.5% | — | Other half was 153.5% |
| Profit from continuing operations | — | $8.9m | — |
Reference: annolyse.ai/briefings/tgg-fy22
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.