FY22 NPAT $31.3m as operating cash swung to a $43.9m outflow

NPAT rose to $31.3m from $26.9m, PBT to $43.1m from $37.4m, and revenue to $342.0m from $296.5m. Against that, net cash from operating activities swung to an outflow of $43.9m from an inflow of $10.9m — a $54.8m deterioration — and gross borrowings rose $73.2m to $412.8m to fund the gap. Automotive Retail led the mix at $242.5m revenue (70.9% share, up 3.1pp) with segment result of $19.4m; Finance and Insurance results also improved; Credit revenue fell to $9.7m and its segment result roughly halved to $3.0m. The board declared a 7.0 cps final dividend, lifting the full-year dividend to 23.0 cps from 20.0 cps. A reporting-basis change limits clean growth-percentage comparisons at group level.

Free cash flow before leases was -$60.1m versus +$2.2m a year earlier, and FCF to NPAT was -192.0%. Trade debtors and inventories barely moved (operating working-capital change of $0.5m), so trade working capital is not the explanation. The more likely driver is growth in the finance receivables book, which a vertically integrated auto-retail-and-finance group typically funds through wholesale borrowings rather than operating cash. This matters because the reported earnings step-up did not translate into spendable cash this period.

Leverage is rising to fund growth. Gross borrowings grew 21.5% to $412.8m while equity grew 8.1%, so the funding mix tilted further toward debt and net debt rose to $399.4m. For an auto finance group this is structurally explainable but it concentrates a larger share of group risk in the credit and finance book.

Segment mix is narrowing. Auto Retail and Insurance margin expansion (28.7% derived versus 22.3%) carried most of the earnings improvement, while Credit revenue and result fell. The earnings story is concentrated rather than broad-based.

That is a modest ask if Auto Retail volume holds and Credit recovers, but it does not anchor expectations for the next 12 months specifically.

Reliable first-half/second-half shape context for FY22 is not available in the supplied data — the interim record provided draws from a later period — so this briefing cannot judge whether FY22 was front-loaded or back-loaded relative to FY21.

However, cash quality is weak. The full-year dividend of 23.0 cps is being paid from a base where FCF before leases was -$60.1m; the dividend is therefore funded from financing rather than from operating cash this year. For an auto-finance group this is structurally explainable — finance-book growth absorbs cash and is funded by wholesale debt — but the read-through is that current dividend serviceability depends on continued borrowing capacity rather than operating cash conversion.

Capex of $16.1m (4.7% of revenue) was 87.2% higher than the prior year. With no disclosed split between maintenance and growth capex, it is difficult to judge how much is a structural step-up versus catch-up after a lighter FY21.

This briefing cannot assess whether the operating cash outflow reflects normal finance-book expansion or a step-change in working-capital absorption without the cash-flow note detail.