Truscreen loss widens 126% to NZ$7.9m as gross margin halves and H2...

What changed

Revenue rose 48.2% to NZ$1.7m (FY21: NZ$1.1m), with Single Use Sensor volumes and revenues up 42% and China cited as the principal contributor. Despite that top-line growth, the statutory loss widened from NZ$3.5m to NZ$7.9m, a 126.2% deterioration. Because income tax was nil in both years, PBT and NPAT are identical and move together.

Gross margin compressed materially, from 35.3% to 20.3% (-1,497bps), driven by a higher cost-of-inventory base (NZ$1.156m) and a new NZ$181.2k obsolete inventory write-off with no FY21 comparator. Operating cash outflow widened to NZ$2.5m (FY21: NZ$2.2m), capex was effectively nil at NZ$2.7k, and cash on hand fell 46.8% to NZ$2.8m. Equity dropped 70% to NZ$3.4m. No borrowings are disclosed on either balance sheet.

What matters

• Margin quality has deteriorated, not just scale. A 48% revenue uplift producing a larger absolute loss points to a cost base growing faster than gross profit, compounded by the inventory write-off. Gross margin falling nearly 1,500bps is the most important signal in this release.
• The H2 shape is materially worse than H1. HY22 contributed 44.4% of full-year revenue but only 16% of the full-year loss, implying roughly NZ$0.9m of H2 revenue against an implied H2 loss near NZ$6.6m. The release does not reconcile this divergence, and it is not explained by tax or a disclosed discontinued operation.
• Cash runway is the binding constraint. Cash of NZ$2.8m against a current-year operating outflow of NZ$2.5m implies roughly one year of burn at this rate, before any step-up in working capital or receivables build. Trade receivables emerged at NZ$0.3m (approximately 60 days) from a zero base, which further locks up cash.

Expectations

No quantitative targets, forward work balance, or guidance were disclosed in the supplied materials, so the result cannot be measured against company commitments. Seasonality is not established from a single prior year, but the FY22 shape is clearly second-half weighted on revenue and sharply second-half weighted on losses. The release flags deferred Vietnam and Eastern Europe sales and lockdown impacts in Beijing and Shanghai on China sales, which qualifies the outlook rather than quantifying it.

Quality of result

Earnings quality is weak on the metrics available. The NZ$181.2k inventory write-off is the only explicitly identified non-recurring item, but it does not explain the bulk of the loss widening from NZ$3.5m to NZ$7.9m — most of the deterioration sits in underlying gross margin and operating costs. Cash conversion deteriorated: operating cash burn rose even as revenue grew 48%, and the emergence of NZ$0.3m in trade debtors from nil is a working-capital headwind rather than a tailwind. Free cash flow pre-lease (-NZ$2.5m) is marginally worse than FY21 (-NZ$2.3m) despite capex falling from NZ$97.5k to NZ$2.7k, meaning the improvement in capex is masking a deterioration in operating cash. Inventory days fell from ~365 to ~136, which aids cash in isolation but is partly a function of the write-off and higher revenue denominator.

Unresolved

• What drove the H2 loss of approximately NZ$6.6m against H1 of NZ$1.3m? The release does not disclose a discontinued operation, impairment, or one-off beyond the NZ$181.2k write-off.
• How does equity fall by NZ$7.9m when the loss is NZ$7.9m, given prior equity of NZ$11.3m — does this imply a prior capital raise that is now substantially consumed, and is another raise required?
• What is the expected monthly cash burn into FY23, and what is the funding plan against the NZ$2.8m cash balance?
• What proportion of revenue and receivables is concentrated in China, Russia, and deferred Eastern European markets? The release names these geographies qualitatively but provides no quantified split.
• Were the FY21 receivables genuinely nil, and if so, what changed in FY22 customer terms to produce 60-day debtor days?

This briefing cannot assess liquidity adequacy, going-concern status, or share-count-based valuation metrics, as cash runway assumptions, any post-balance-date capital actions, and share data are not provided in the supplied materials.

Key metrics

Analytical metrics

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.