Table of Contents
What changed
Revenue rose 4.1% to NZ$477.3m, with management attributing the mix shift to an 11% lift in sale of services (primarily rentals) against a 4% decline in sale of goods. PBT grew 15.5% to NZ$40.7m and NPAT grew 17.0% to NZ$29.6m, with the effective tax rate broadly stable (27.3% vs 28.2%). Operating cash flow jumped 66.9% to NZ$40.5m while capex fell from NZ$17.4m to NZ$5.8m, producing pre-lease free cash flow of NZ$34.8m against NZ$6.9m in HY25. Inventories fell 33.0% (NZ$78.4m), consistent with the previously flagged Australian retail RV stock reduction. Gross borrowings eased NZ$9.8m to NZ$516.2m, but cash dropped from NZ$48.7m to NZ$22.8m, so net debt actually lifted modestly to NZ$493.5m. The interim dividend rose 20% to 3.0 cps.
What matters
- Earnings recovery is real but off a very low base. HY25 itself was described by THL as down 36% on the prior comparable period, and H2 FY25 was loss-making (implied NPAT of roughly -NZ$51.0m, driving the full-year NZ$25.8m statutory loss). A 17% NPAT recovery against that depressed comparable is the key read.
- Cash conversion stepped up, but is partly balance-sheet-assisted. OCF of NZ$40.5m sits alongside a NZ$78.4m inventory release — a one-time working-capital unwind that cannot repeat at the same scale. Capex also halved, which management links to "timing impacts from fleet investment in ANZ… expected to normalise in H2."
- Leverage direction is mildly adverse. Equity fell 3.7% to NZ$623.0m and net debt rose despite the headline reduction in gross borrowings, because cash was drawn down by NZ$25.9m. ROFE (TTM) slipped to 7.5% from 8.1%.
Expectations
No quantitative revenue, earnings, or leverage target was disclosed. Annualised HY26 revenue of NZ$954.6m runs about 1.9% above the FY25 anchor of NZ$937.2m, but FY25's H2 shape was a severe negative, so any H2 FY26 print that avoids losses will deliver large reported FY growth mechanically. Management's only directional comment is that H2 fleet-investment timing normalises, implying capex will rise and the pre-lease FCF tailwind compresses. On the information supplied, the result supports an inflection narrative but does not evidence a return to the NZ$51.8m underlying NPAT base of FY24.
Quality of result
Mixed. The underlying operating step-up is visible in PBT (+15.5%) and the service-revenue mix shift is favourable. However, the most eye-catching line — NZ$34.8m of pre-lease FCF versus NZ$6.9m — is driven by two items with limited durability: an inventory unwind of NZ$78.4m targeting the Australian retail RV overhang, and capex running at 1.2% of revenue versus 3.8% last year. Dividend cover on pre-lease FCF (19% payout) looks comfortable only so long as both of those reverse gently; on post-lease economics, which were not disclosed, the picture is less clear. Underlying EBITDA and underlying NPAT are referenced without a full statutory-to-underlying bridge in the supplied materials.
Unresolved
- Group EBITDA for HY26 is not supplied, preventing a direct like-for-like leverage ratio (HY25 ran at roughly 4.2x net debt to EBITDA).
- No segment revenue or margin split is provided, so the relative health of the NZ, Australia, and North America rental businesses cannot be separated.
- H2 capex and fleet investment quantum is flagged qualitatively only; the scale of the normalisation swing is undisclosed.
- The statutory-to-underlying reconciliation is not in the extract, and no customer, geographic, or concentration data is provided.
- FX had a NZ$1.6m cash impact but broader translation sensitivity is not quantified.
This briefing cannot assess forward rental pricing, fleet utilisation, or the pace at which H2 fleet capex and inventory restocking will compress the cash-flow improvement seen in HY26.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $477.3m | $458.4m | +4.1% ↑ |
| EBITDA | — | $113.3m | — |
| Net profit after tax | $29.6m | $25.3m | +17.0% ↑ |
| Net cash inflow from operating activities | $40.5m | $24.3m | +66.9% ↑ |
| Interim dividend per share | 3.0c | 2.5c | +20.0% ↑ |
| Operating profit | $64.1m | $57.8m | +10.8% ↑ |
| Profit before tax | $40.7m | $35.2m | +15.5% ↑ |
| Cash and cash equivalents | $22.8m | $48.7m | -53.2% ↓ |
| Total assets | $1.6b | $1.6b | -0.6% ↓ |
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| PBT growth | +15.5% | — | — |
| Effective tax rate | 27.3% | 28.2% | — |
| FCF pre-lease | $34.8m | $6.9m | +$27.9m |
| FCF / NPAT | 117.6% | 27.3% | complementary conversion metric |
| Capex % revenue | 1.2% | 3.8% | — |
| Capex | −$5.8m | −$17.4m | +$11.6m |
| Debtor days | 17.7 | 19.9 | -2.2 days |
| Inventory days | 60.6 | 66.0 | -5.4 days |
| Operating working capital | $205.3m | $216.1m | −$10.7m absorbed |
| Trade debtors | $46.5m | $50.1m | −$3.6m |
| Net debt | $493.5m | $477.3m | +$16.2m |
| Gross borrowings | $516.2m | $526m | −$9.8m |
| Payout ratio vs NPAT | 22.4% | — | — |
| Payout ratio vs FCF pre-lease | 19.1% | — | covered |
| ROE (annualised) | 4.7% | 3.9% | Strengthening |
| HY25 share of FY25 revenue | 48.9% | — | Other half was 51.1% |
| HY25 share of FY25 NPAT | -98.0% | — | Other half was 198.0% |
| Profit from continuing operations | $29.6m | $25.3m | +$4.3m |
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. 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.