Table of Contents
What changed
Revenue rose 7.2% to NZ$820.1m, and the pre-tax loss narrowed sharply from NZ$21.4m to NZ$8.2m (a 61.6% improvement). NPAT, however, moved the other way, deepening from a NZ$17.7m loss to a NZ$21.4m loss, a 20.9% widening. The divergence is tax-driven: the implied effective tax rate was 126.7% in HY24 versus a 26.7% credit on the prior half's loss.
Segment mix shifted materially. Apples grew from 66.4% of group revenue to 71.8% and delivered a NZ$23.8m segment result (HY23: -NZ$0.6m), while T&G Fresh swung from a NZ$10.6m profit to a NZ$11.3m loss on broadly flat revenue.
Cash and leverage weakened. Operating cash flow dropped from -NZ$8.8m to -NZ$13.1m, gross borrowings rose 21.9% to NZ$293.1m, net debt increased from roughly NZ$189.7m to NZ$239.7m, and total equity fell 11.0% to NZ$493.0m. Capex eased from NZ$36.7m to NZ$11.3m, so pre-lease free cash flow still improved to -NZ$24.5m from -NZ$45.5m despite weaker operating cash.
What matters
- Use PBT as the cleaner read. The 82pp gap between PBT growth (+61.6%) and NPAT growth (-20.9%) reflects an abnormal tax charge, not operating deterioration. On an underlying basis, the operating loss narrowed from NZ$11.6m to NZ$2.6m.
- Apples is now carrying the group. The Apples rebound is the single largest positive driver and masks the T&G Fresh reversal to a loss, which the commentary attributes to plentiful domestic supply. Group earnings quality has become more concentrated in one segment.
- Balance sheet direction is the main concern. Net debt rose roughly NZ$50m year-on-year while equity contracted, and operating cash conversion worsened in the seasonally weaker first half. Inventory days stretched from 32.9 to 36.6, adding working-capital absorption on top of the loss.
Expectations
No quantitative earnings, revenue, or balance-sheet targets were provided, and no forward-work metric was disclosed. Seasonality context is limited to FY23, itself a storm-affected year: HY23 captured 57.4% of FY23 revenue but only 34.7% of its NPAT loss, so the business was not obviously second-half-weighted for earnings in that anchor period. Annualising HY24 revenue gives NZ$1.64b, about 22.9% above FY23's NZ$1.33b, but the Apples-heavy first half makes straight-line annualisation misleading. The release supports the view that operating losses are narrowing, but does not support any specific full-year earnings profile.
Quality of result
The operating improvement looks partly durable and partly mix-driven. Apples delivered a real result swing of roughly NZ$24m, and capex discipline (1.4% of revenue versus 4.8%) drove the improvement in pre-lease free cash flow rather than underlying cash generation, which actually worsened. The FCF-to-NPAT ratio of 114% overstates cash quality given both numerator and denominator are negative.
Working capital consumed more cash: operating working capital (receivables plus inventory) rose about NZ$42.9m year-on-year, with inventory days up 3.7 days. Cash conversion deteriorated. The result therefore reads as an Apples-led operating recovery partially financed by additional borrowings and lower reinvestment, rather than a broad-based earnings-quality improvement.
Unresolved
- What is the cause of the HY24 tax charge that drove an effective rate above 100% on a small pre-tax loss, and is any portion non-recurring?
- Is the T&G Fresh loss cyclical (domestic oversupply) or structural, and what is the path back to the NZ$10m+ segment result it delivered in HY23?
- How is management thinking about the net debt trajectory given equity is declining and the group is still loss-making at the NPAT line?
- With no dividend component disclosed in the supplied data, what is the capital-return stance while net debt is rising?
- No forward-work, order-book, or quantified guidance was provided, so the second-half shape is not anchored.
This briefing cannot assess segment-level margins in detail beyond inferred operating results, covenant headroom on the expanded debt stack, or the durability of the Apples margin given season-specific pricing and volume dynamics.
Key metrics
| Metric | HY24 | HY23 | Change |
|---|---|---|---|
| Revenue | $820.1m | $765.3m | +7.2% ↑ |
| Net profit after tax | −$21.4m | −$17.7m | -20.9% ↓ |
| Net cash inflow from operating activities | −$13.1m | −$8.8m | -49.2% ↓ |
| Operating profit | −$2.6m | −$11.6m | +77.4% ↑ |
| Profit before tax | −$8.2m | −$21.4m | +61.6% ↑ |
| Total assets | $1212.8m | $1218.3m | -0.5% ↓ |
Reference: annolyse.ai/briefings/tgg-hy24
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Apples | $589.0m | $507.8m | $23.8m | +5.5pp |
| T&G Fresh | $218.3m | $208.4m | −$11.3m | -0.6pp |
| VentureFruit® | $4.0m | $5.3m | −$3.4m | -0.2pp |
| Other | $8.8m | $0.0m | −$11.7m | +1.1pp |
Reference: annolyse.ai/briefings/tgg-hy24
Analytical metrics
| Metric | HY24 | HY23 | Context |
|---|---|---|---|
| FCF pre-lease | −$24.5m | −$45.5m | +$21.0m |
| FCF / NPAT | 114.2% | 256.7% | complementary conversion metric |
| Capex % revenue | 1.4% | 4.8% | — |
| Capex | −$11.3m | −$36.7m | +$25.4m |
| Debtor days | 52.6 | 52.5 | +0.1 days |
| Inventory days | 36.6 | 32.9 | +3.7 days |
| Operating working capital | $401.9m | $359.0m | +$42.9m absorbed |
| Trade debtors | $237.0m | $220.5m | +$16.4m |
| Net debt | $239.7m | $189.7m | +$50.0m |
| Gross borrowings | $293.1m | $240.5m | +$52.6m |
| ROE (annualised) | -4.1% | -3.3% | Weakening |
| HY23 share of FY23 revenue | 57.4% | — | Other half was 42.6% |
| HY23 share of FY23 NPAT | 34.7% | — | Other half was 65.3% |
| Profit from continuing operations | — | −$17.7m | — |
Reference: annolyse.ai/briefings/tgg-hy24
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.