Table of Contents
What changed
Revenue slipped 1.0% to $645.5m, but operating profit rose 37.8% to $15.0m and profit before tax climbed 53.7% to $7.8m. NPAT attributable to the parent, however, fell 14.3% to $2.9m — despite profit from continuing operations after tax being $5.7m — implying a material non-controlling interest bleed below the PBT line. Operating cash flow swung from a $36.7m inflow in HY21 to a $31.0m outflow, a $67.8m reversal. Capex almost doubled to $31.3m (4.8% of revenue vs 2.4%), driving pre-lease free cash flow from +$20.9m to -$62.3m. Cash fell to $68.3m and net debt rose to $120.6m from $112.3m, even as gross borrowings eased to $188.9m. No interim dividend is recorded in the current period against 6.0 cents prior. Segment mix shifted toward T&G Fresh (28.7% of revenue, up 3.7pp) with Apples still dominant at 62.1% and posting a margin uplift to ~7.0% from ~5.8%.
What matters
- Cash conversion deteriorated sharply. The $67.8m swing in operating cash flow, combined with capex running at roughly twice the prior-period rate, is the single most important read-through. Receivable days lengthened to 62.0 from 54.3, consistent with a working-capital absorption rather than a cost-base issue. This is the reason operating-profit strength did not translate to a stronger balance sheet.
- PBT is the cleaner operating read. Operating profit +37.8% and PBT +53.7% describe the underlying trading better than the -14.3% NPAT print, which is distorted both by a lower effective tax rate (26.3% vs 32.7%) and by the NCI gap between continuing-operations profit of $5.7m and parent NPAT of $2.9m. Apples margin expansion and a narrower International Trading loss ($1.3m vs $5.7m) drove the operating improvement.
- Leverage drifted the wrong way despite lower gross debt. Net debt rose $8.3m because the cash draw ($16.7m) exceeded the reduction in borrowings ($8.4m). Equity is up 9.5% to $563.6m, so gearing remains manageable, but direction is weakening.
Expectations
No quantitative guidance, forward-work disclosure, or stated targets are provided in the supplied excerpts. FY21 was first-half-light — HY21 was only 38.5% of full-year NPAT and 47.8% of revenue — so simple annualisation understates the full-year shape. Annualised HY22 revenue of ~$1.29b sits about 5.5% below the FY21 base of $1.37b, meaning the second half has to rebuild both revenue and cash to match the prior year's trajectory. On the operating line, the uplift in Apples margins and the narrower International Trading loss give some room for PBT improvement year-on-year, but the release supports no specific full-year claim.
Quality of result
Operating-profit quality looks reasonable at the segment level: Apples margin expansion and a materially narrower International Trading loss are durable sources of improvement rather than one-off gains, and no non-recurring items were disclosed. However, the result is not cash-backed in this period. Pre-lease FCF of -$62.3m against NPAT of $2.9m is an extreme disconnect, and the 7.7-day stretch in receivable days indicates the improvement in reported earnings is being partly financed by the balance sheet. Capex intensity of 4.8% of revenue is twice the prior rate, so some of the cash draw is investment-led rather than working-capital-led, but the filing does not separate discretionary growth capex from maintenance. The lower effective tax rate also flattered profit after tax at the continuing-operations level.
Unresolved
- Why did operating cash flow swing by $67.8m when reported earnings improved? How much is seasonal/timing versus a structural lengthening in receivables?
- What is the split between maintenance and growth capex, and does the $31.3m run-rate continue in H2?
- Why is parent NPAT ($2.9m) so much lower than continuing-operations profit after tax ($5.7m) — what NCI or other attribution items are driving the gap?
- Why is no interim dividend recorded, and is this a deferral to the full year or a capital-preservation decision?
- What is management's full-year revenue, earnings and net-debt expectation, given no quantitative guidance was disclosed in the excerpts?
This briefing cannot assess management commentary, forward work in hand, or the split of capex between maintenance and growth, because those items are not present in the supplied extraction data.
Key metrics
| Metric | HY22 | HY21 | Change |
|---|---|---|---|
| Revenue | $645.5m | $652.1m | -1.0% ↓ |
| Net profit after tax | $2.9m | $3.4m | -14.3% ↓ |
| Net cash inflow from operating activities | −$31.0m | $36.7m | -184.5% ↓ |
| Declared dividend per share | — | 6.0c | — |
| Operating profit | $15.0m | $10.9m | +37.8% ↑ |
| Profit before tax | $7.8m | $5.1m | +53.7% ↑ |
| Cash and cash equivalents | $68.3m | $85.0m | -19.6% ↓ |
| Total assets | $1221.8m | $1168.5m | +4.6% ↑ |
Reference: annolyse.ai/briefings/tgg-hy22
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Apples | $400.8m | $425.0m | $28.0m | -3.1pp |
| International Trading | $48.7m | $64.1m | −$1.3m | -2.3pp |
| T&G Fresh | $185.1m | $162.9m | $4.5m | +3.7pp |
| VentureFruit™ | $10.9m | — | $3.6m | n/a |
| Other | $0.1m | $0.1m | −$19.8m | +0.0pp |
Reference: annolyse.ai/briefings/tgg-hy22
Analytical metrics
| Metric | HY22 | HY21 | Context |
|---|---|---|---|
| PBT growth | +53.7% | — | cleaner earnings measure |
| Effective tax rate | 26.3% | 32.7% | — |
| FCF pre-lease | −$62.3m | $20.9m | −$83.3m |
| FCF / NPAT | n/m | 612.8% | complementary conversion metric |
| Capex % revenue | 4.8% | 2.4% | — |
| Capex | −$31.3m | $15.8m | −$47.1m |
| Debtor days | 62.0 | 54.3 | +7.7 days |
| Trade debtors | $219.7m | $194.7m | +$25.0m |
| Net debt | $120.6m | $112.3m | +$8.3m |
| Gross borrowings | $188.9m | $197.3m | −$8.4m |
| ROE (annualised) | 0.5% | 0.7% | 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 | $5.7m | $3.4m | +$2.3m |
Reference: annolyse.ai/briefings/tgg-hy22
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.