Continuing EBITDA up 14% to $365.2m but leverage stretched to 5.7x post-metering

What changed

FY24 is the first clean year after the 50% Vector Metering divestment, so the headline compare is misleading. On a like-for-like continuing basis, revenue slipped 4.3% to $1.1b while adjusted EBITDA rose 14% to $365.2m (from ~$335.1m continuing in FY23, versus a group prior of $523.3m that included metering). PBT grew 12.8% to $180.1m, but continuing-operations NPAT fell 21.8% to $77.5m and group NPAT collapsed to $88.6m from $1.7b – the prior year was inflated by a ~$1.60bn gain on the metering sale. Capex eased to $510.1m from $700.4m. Cash fell to $77.4m from $89.9m, gross borrowings reduced to $2.2b, and net debt of $2.1b against lower EBITDA drove net debt/EBITDA from 4.2x to 5.7x. The final dividend was cut to 13.0c from 14.0c, with a smaller 1.75c special (versus 5.5c prior).

What matters

• Mix has hardened around the regulated asset. Regulated Networks contributed about 83% of revenue and roughly 97% of segment profit at an estimated ~39% margin, while lower-quality Gas Trading revenue halved to $128.2m. The earnings base is narrower but higher quality.
• Leverage direction is the main negative. Debt reduction has not kept pace with the EBITDA base shrinking post-metering; net debt/EBITDA moved from 4.2x to 5.7x. Combined with capex still at 44.7% of revenue, this constrains the balance sheet.
• The dividend signal is mixed. A cut in the final dividend alongside a materially smaller special dividend is consistent with management prioritising balance-sheet repair over distribution, even though the headline payout ratio versus NPAT (14.7%) looks comfortable.

Expectations

No numeric earnings target, forward-work backlog, or formal guidance was supplied. The HY24 interim contributed about 50.0% of FY24 revenue but only 27.8% of FY24 NPAT, so the result was second-half weighted on profit; investors reading off the interim would have underestimated the full year. Against the stated "Symphony" strategy references to AWS and Google X, the release does not quantify any associated revenue or cost impact. The filing supports a read that FY24 delivered continuing-ops EBITDA growth in line with the 14% claim, but does not support any view on a trajectory for FY25.

Quality of result

The growth in continuing adjusted EBITDA and PBT looks operationally driven via the Regulated Networks segment, which is the durable element. Several factors reduce the quality of the reported result, however. Receivable days rose to 29.3 from 18.6 and operating working capital increased by $35.9m, flagging a working-capital-assisted P&L where cash conversion is not disclosed – operating cash flow and free cash flow are not provided in the supplied materials, so FCF cover of the dividend cannot be verified. Adjusted EBITDA is a non-GAAP measure with no full reconciliation supplied. Finally, NPAT includes $11.1m from a discontinued operation and PBT-to-NPAT bridges a $91.5m tax line (implied effective tax rate ~50.8%) that is not decomposed in the excerpts, so PBT growth of 12.8% is the cleaner operating read.

Unresolved

• Operating cash flow, free cash flow and therefore cash conversion and dividend cover are not disclosed.
• The drivers of the elevated effective tax rate and the composition of the $11.1m discontinued-operation contribution are not detailed.
• The reconciliation between statutory EBIT/PBT and the $365.2m adjusted EBITDA is not provided.
• There is no quantified forward work, capex plan, or regulatory reset guidance to anchor FY25 expectations, and no customer concentration or refinancing schedule is disclosed.

This briefing cannot assess cash generation, FCF-based dividend cover, or forward earnings trajectory because operating cash flow and guidance were not provided in the supplied materials.

Key metrics

Segment breakdown

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.