1H25 capex estimate Net cash generation should very roughly...

1H25 capex estimate

Net cash generation should very roughly equal NPAT - net increase in working capital + D+A – capex + asset sales (as there were no dividends); although I admit that there are other variables that could also change.

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As a guide this gives $M 14.8 -20 +54.6 – capex + 21.2 from selling Viscount = minus $42.8m, the stated rise in net debt. I accept that this is very crude, but it indicates capex of about $113m in 1H25. I have guessed that PGH absorbed $20m of cash through a net increase in working capital: this is just a guess, based on net working capital rises absorbing $10m cash in FY23 and $30m in FY24. The actual figure in 1H25 could be very different, especially if this is seasonal. The figures could also be distorted by timing of tax payments.

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By comparison capex in continuing operations was $53m in 1H24 and $52m in 2H24. This suggests that this estimate of $113m for 1H25 is too high. However, the fact remains that net debt rose by $42.8m despite Pact being profitable and despite getting $21.2m from selling Viscount (today’s announcement said it “completed” on 31/12/24 which would normally mean Pact got the cash on that day), and depreciation and amortisation was a non-cash expense of $54.4m in arriving at net profit.

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It’s impossible to prove until the full results appear on 28 Feb, but I agree with Borg that the figures disclosed today suggest that Pact’s capex/ investment is still very high, and higher than it was in the last 2 half –years.