NPAT up 57.5% but operating cash flow reversed $85m to -$78.8m

Revenue grew 72.1% to $449.2m, EBITDA reached $119.7m, PBT rose 53.8% to $56.0m and NPAT rose 57.5% to $39.7m. Against that, net cash flow from operating activities swung from +$6.4m in HY23 to -$78.8m in HY24, a roughly $85m reversal.

The balance sheet absorbed the pressure. Gross borrowings climbed $145.6m to $453.6m, total assets rose 21.6% to $1.4b, and cash fell $8.5m to $50.3m. Net debt is approximately $403.3m, near 3.4x annualised EBITDA versus $249.3m a year earlier.

Segment mix shifted materially. Australian Rentals, Sales & Manufacturing revenue more than tripled to $185.4m (41.3% of group from 22.1%), while USA Rentals & Sales revenue fell to $80.0m (17.8% from 36.3%). An interim dividend of 4.5cps was declared.

Operating cash flow at -$78.8m equates to OCF/EBITDA of -65.9%, and FCF pre-lease of -$83.0m is roughly -209.0% of NPAT. Reported profit growth was therefore funded on the balance sheet, not by cash from the business, which weakens the read on the headline 57.5% NPAT growth.

• Leverage rose meaningfully. Borrowings stepped up 47.3% while equity rose only 8.3%, lifting net debt to roughly 3.4x EBITDA. This matters because further fleet build, currency moves, or a softer second half would compound debt-service pressure rather than be absorbed by retained cash.

• The comparison is not clean. Australian segment revenue went from $57.6m to $185.4m and USA share roughly halved; group totals therefore reflect a structurally larger and differently weighted business, so the 72.1% revenue and 57.5% NPAT growth rates overstate underlying organic momentum that the release does not separately quantify.

The supplied second-half shape shows HY23 generated 39.3% of FY23 revenue but 50.5% of FY23 NPAT, indicating an historically second-half-weighted earnings pattern. On that pattern, achieving an FY24 NPAT step-up consistent with the first-half delivery requires the second half to convert higher revenue into proportionally stronger profit, while also reversing the working-capital outflow.

The release does not provide commentary on H2 fleet utilisation, booking pace, or pricing, so the durability of the H1 margin uplift cannot be tested here. What the release supports is a larger, more Australian-weighted business; what it does not support is confidence that H2 cash generation will offset the $79m H1 operating outflow.

The current effective tax rate of 29.1% is a more normal charge than the prior -30.9% (which reflected a tax credit), so PBT growth of 53.8% is the cleaner operating read versus NPAT growth of 57.5%, a gap of -3.7 percentage points. No non-recurring items are disclosed, but the segment-mix change and the absence of a like-for-like Australian comparison limit how much of the uplift can be called organic.

Payout ratio versus pre-lease FCF is suppressed because the source-backed cash-dividend bridge is unavailable.

This briefing cannot assess management's organic-versus-acquired growth split, covenant headroom, or H2 trading conditions, because the supplied release does not disclose those items.