NEC New Zealand loss widens as revenue falls to NZD $13m

NEC New Zealand reported revenue of NZD $12.946 million for the year ended 31 March 2026, down from NZD $19.013 million a year earlier.

The company recorded a loss before tax of NZD $3.6 million, compared with a loss of NZD $0.7 million in 2025, according to its Directors' Report.

Revenue from continuing operations was NZD $12.598 million, compared with NZD $18.397 million in 2025.

The largest revenue categories were biometrics, hardware and software, and support and maintenance services.

Biometrics revenue fell to NZD $4.396 million from NZD $9.272 million. Support and maintenance revenue declined to NZD $3.367 million from NZD $4.570 million.

Hardware and software revenue increased to NZD $4.173 million from NZD $3.696 million.

Project revenue also rose to NZD $617,000 from NZD $271,000. Platform service revenue, which was NZD $491,000 in 2025, was not recorded in 2026.

Loss widens

NEC New Zealand's total expenses fell to NZD $16.521 million from NZD $19.711 million.

Employee benefits expenses declined to NZD $5.928 million from NZD $7.248 million. Depreciation and amortisation fell to NZD $780,000 from NZD $889,000.

Other expenses declined to NZD $2.177 million from NZD $2.654 million.

Despite the reduction in expenses, the company recorded a loss before tax of NZD $3.575 million. The previous year's loss was NZD $698,000.

After income tax, the loss for the year was NZD $3.680 million, compared with NZD $507,000 in 2025.

The company recorded NZD $15,000 of other comprehensive loss, taking total comprehensive loss to NZD $3.695 million.

Asset charge

NEC New Zealand recorded a NZD $1.318 million impairment loss on right-of-use assets relating to its Auckland and Wellington office premises.

The Auckland office had remained vacant and unused for more than 18 months. Management was unable to secure a sublease despite marketing efforts.

The Board also resolved to cease using the Wellington office and move employees to a permanent work-from-home model.

The company said the changes represented significant changes in the use of the premises and were impairment indicators. It determined that the recoverable amount of both right-of-use assets was nil.

Cash declines

Cash and cash equivalents stood at NZD $6.459 million at 31 March 2026. That compared with NZD $18.810 million a year earlier.

The company had held NZD $12.583 million in short-term deposits at the end of March 2025. No short-term deposits were reported in 2026.

Net cash from operating activities fell to NZD $834,000 from NZD $7.356 million.

The company spent NZD $185,000 on property, plant and equipment during the year, compared with NZD $137,000 previously.

Net cash used in investing activities was NZD $184,000.

Dividend paid

NEC New Zealand declared and paid a NZD $12 million dividend for the year ended 31 March 2026.

The cash-flow statement records dividends paid of NZD $12.300 million.

The dividend reduced retained earnings from NZD $19.344 million at 31 March 2025 to NZD $3.349 million at the end of the 2026 financial year.

The company's total equity fell to NZD $5.849 million from NZD $21.844 million.

Share capital remained unchanged at NZD $2.5 million, with 2.5 million ordinary shares on issue.

Balance sheet

Total assets declined to NZD $10.656 million from NZD $27.590 million.

Current assets fell to NZD $9.391 million from NZD $24.555 million. Trade and other receivables declined to NZD $2.908 million from NZD $4.730 million.

Total liabilities were NZD $4.807 million, down from NZD $5.746 million.

Trade and other payables fell to NZD $3.191 million from NZD $3.524 million.

Related parties

NEC New Zealand recorded NZD $1.335 million in sales to related parties during the year.

Purchases from related parties were NZD $2.188 million.

The company reported NZD $135,000 owed by related parties and NZD $385,000 owed to related parties at year-end.

Related parties included NEC Australia Pty Limited, NEC Asia Pacific Pty Limited, NEC Corporation of America and NEC India Pty Limited.

Going concern

The financial statements state that NEC New Zealand recorded a loss after tax of NZD $3.7 million for 2026.

The company said its current assets exceeded current liabilities by NZD $5.7 million, primarily due to NZD $6.5 million in cash.

The Directors said they had assessed the company's ability to continue as a going concern and considered the assumption valid. They said the company had sufficient funds to meet its obligations for at least 12 months from the date the financial statements were signed.

Post-year event

After 31 March 2026, NEC New Zealand entered into a settlement agreement with a customer concerning disputed outstanding unbilled revenue relating to a contract that had ended before the reporting date.

The company said the amount recoverable remained uncertain at 31 March 2026. The settlement reached after year-end resulted in partial recovery of the outstanding unbilled revenue.

The agreed amount will be recognised in the subsequent reporting period. The report said no other matters arose after year-end that significantly affected the company's operations or financial position.