Apples-led recovery cut T&G's PBT loss 89%, but debtors ran 51.3 days

The pre-tax loss narrowed 89.4% to NZ$6.8m (from NZ$64.2m), and the after-tax loss narrowed 68.7% to NZ$16.0m. The Apples segment did the heavy lifting: revenue grew 7.5% to NZ$859.1m and segment operating profit jumped to NZ$43.7m from NZ$10.6m as Hawke's Bay volumes recovered from Cyclone Gabrielle. T&G Fresh moved the other way, with segment profit falling to NZ$3.6m from NZ$11.1m.

Operating cash flow more than doubled to NZ$60.7m and capex stepped down 33% to NZ$45.7m, lifting pre-lease free cash flow to NZ$15.0m from a NZ$42.9m outflow.

Against that, trade debtors rose 14.2% to NZ$191.2m on only 2% revenue growth, gross borrowings rose 8.9% to NZ$215.0m, and equity fell 6% to NZ$490.7m.

Debtor days reached 51.3 versus Annolyse's historical baseline mean of 28.8 days (range 6.3–48.7), so the current value sits above that range. Trade receivables grew NZ$23.8m while revenue grew only NZ$26.6m, meaning collections — not sales — absorbed most of the cash that the income statement recovery should have generated. That is why equity still fell despite the loss narrowing.

The recovery is concentrated in one segment. Apples now contributes 63.1% of revenue (up from 59.9%) and effectively all of the segment-level profit. T&G Fresh, the second-largest business at 33.5% of revenue, saw operating profit fall by roughly two-thirds. Investors are buying a sharper Apples-cycle exposure than the headline 2% revenue growth suggests, and the durability of the result hinges on a single weather-sensitive crop.

Tax distorted the read on NPAT. PBT grew 89.4% but NPAT grew only 68.7% — a 20.7-percentage-point gap. The effective tax rate of −44.8% is an unprecedented low against a historical mean of 41.7%, meaning the group recognised a tax expense on a loss. PBT is the cleaner operating measure here.

HY24 NPAT was −NZ$21.4m and full-year NPAT was −NZ$16.0m, implying a small H2 profit of roughly NZ$5.4m — a more meaningful turn than the full-year number alone shows, but consistent with the Apples seasonality that drove the year.

What the release does not support is a clean line to sustainable profitability. The group still posted a PBT margin of −0.5% (within the historical range of −4.8% to 1.4%) and an ROE of −3.2%. Two consecutive H1 losses mean the company remains structurally reliant on the Apples second-half cycle to keep the full-year result close to breakeven.

Capex fell NZ$22.8m year-on-year and was the largest single contributor to the swing in pre-lease FCF to NZ$15.0m; that reduction is a deliberate choice, not a structural cash-generation improvement. Receivables growth of NZ$23.8m offset a meaningful share of the operating cash gain, so cash quality is weaker than the OCF headline implies.

On the earnings side, the Apples segment recovery is real but cyclical. T&G Fresh's profit decline, the disappearance of the International Trading segment (NZ$91.8m of prior-year revenue), and a NZ$30.3m loss in the Other segment all point to ongoing portfolio reshaping rather than a clean operating recovery. With ROE at −3.2% (improved from −10.1% but still in the lower edge of the historical range) and equity down NZ$31.2m, the balance sheet absorbed the cost of the year despite the income-statement recovery.

This briefing cannot assess orchard productivity, channel pricing, or post-balance-date trading without management commentary on those drivers.