I would now like to hand the conference over to Mr. Paul Millward, CEO. Please go ahead.
Morning, everyone. Thanks for joining us today. Before we start, I just want to acknowledge the tragic loss of one of our drivers in an incident two weeks ago. Whilst the findings haven't been formally released, the family has shared that it was a medical event, and our thoughts and condolences are with his family at this very difficult time. Today, we will go through this year's results, the progress we've been making under our Accelerate Transformation program, and the outlook going forward. Lee Banks, our CFO, is with me, and we'll talk to MOVE's financial results. We will be happy to take your questions at the end. A brief reminder of who we are and the scale of our business. We have an extensive nationwide network with strong connections into key centers in the regions. We provide end-to-end supply chain solutions.
This covers freight, warehousing, trans-Tasman shipping, and specialized haulage services. At the center of it all are our customers and a team that's passionate, experienced, with strong capability. We have a brand that's recognizable and a strong market position, and the steps we're continuing to take to streamline the business will ensure we're ready to capture growth when demand returns. We delivered on our financial targets for the year with normalized earnings before tax improving significantly year- on- year, alongside positive net adjusted operating cash flow. While there is more work to do, good progress has been made, and we have a clear plan in place to continue the momentum. Our results reinforce the progress of the Transformation program. We retained revenue despite low demand in a highly competitive market.
Earnings did improve significantly, up 61% year- on year, and the fourth quarter of FY 2025 was our strongest in two years, which is a great sign. We also lifted gross margin thanks to our broad cost out and efficiency program. Gross margin percentage increased by 4.1% points, and in absolute dollars, we were up 13.4%, which is a material step change. The Accelerate plan was launched this time last year and identified three main streams of activity. Firstly, to recalibrate our business, secondly, to drive profitable revenue growth, and lastly, to ensure balance sheet resilience. The plan has been well executed by the team, and we are now a far stronger organization with most legacy issues resolved. A significant amount of effort has been put into the transformation of MOVE over the last year.
We've strengthened the organization with a refreshed leadership team, divested surplus or aged assets, and right-sized our network. Operationally, we have retained key customers. Costs have been reduced to approximately $27 million, and we have delivered a turnaround in the freight and fuel business. There is one year of the Accelerate program left to go, and our focus is now moving from cost out to value creation. This snapshot highlights our progress over the last two years and the positive momentum we've seen under the program. Earnings and gross margin have improved strongly, while revenue has remained reasonably flat despite the weak market. We did need to structurally fix our gross margin position, and the progress here is significant and is ongoing. Looking now at our individual business units, three of MOVE's four businesses delivered significantly improved normalized earnings year- on- year.
It was a very challenging trading environment in FY 2025. Ongoing economic headwinds, low business and consumer confidence, and cost of living pressures all weighed on demand against the backdrop of several years of recession in New Zealand. Lower demand led to increased competitor activity and aggressive and unsustainable pricing by some market participants. Activity was further affected by the disruption to the inter-island ferry service, as well as extreme weather events. While New Zealand's long-awaited recovery seems to keep stretching out, we can see from talking with our partners that sentiment is starting to lift slightly. We are strategically expanding the diversity of our customer base, which will reduce inflation risk and ensure greater balance and resilience through the cycles. We are confident that our level of transformation and cost, culture, and capability will mean that we are positioned well when the economy has recovered.
A real highlight of the year has been the turnaround in MOVE's freight and fuel business, which delivered increased revenue and improving gross margins despite a competitive market. The division's normalized earning loss improved by 90% year- on- year and did move to a positive result in Q4 FY 2025. It is worth noting that we restructured our freight and warehousing divisions this year and moved the fuel service into freight. Our fuel business continues to perform strongly, underpinned by a long-term partnership with Z Energy. Warehousing has been an ongoing challenge. There are limited barriers to entry in warehousing. Almost anyone can open up a shed and offer storage, however, not everyone can deliver quality, cost-effective solutions with access to an integrated national network like MOVE. We saw a significant expansion of industry capacity during and post-COVID. However, as customers have returned to just-in-time models, this turned into a glut.
Aggressive pricing tactics are being used, and storage costs have now dropped below pre-COVID levels. A reset of the business is underway with new leadership, and the past few months have involved significant work to stabilize the operation and lay the groundwork for a sustainable turnaround. The priority focus has been on retaining and building our customer base, with a big step up in service and delivery metrics. We've improved our processes and systems across the business, with stronger disciplines now in place. We've also right-sized our teams and our sites to match workflow demand, including the exit of two properties which were surplus to needs. This will provide material upside in FY 2026. A strong commitment to customer partnerships and service excellence has seen retention of key customers, as well as new business wins, which are commencing in the first half of this financial year. Specialists is a great business.
It's very project-focused, particularly infrastructure projects, roading, energy plus movement of large difficult items. It had a good year despite a number of projects which were deferred into the second half of FY 2026. Energy generation projects such as wind farms are picking up, and we are considered experts in this space, so we're well positioned. We're also doing more work up in the Pacific Islands, where they have limited local resources for specialist haulage, and the pipeline for work for specialists for the next two years is looking very healthy. Finally, our international business. This is a smaller division. There has been a softer year for freight forwarding, particularly in Australia. Our Trans-Hasman shipping service is going very well. We moved to a time charter model with a new vessel in September last year and have recently renewed contracts with foundational customers who utilize the majority of the capacity.
The result this year did include costs of $1.1 million related to the disposal of the previous vessel. I'll now hand over to Lee to talk to our results in more detail.
Thanks, Paul. This year's result reflects a year-on-year improvement in earnings, margin, and operating cash flow, despite the impact of adverse trading conditions on customer demand and revenue. We delivered our financial targets, and structural benefits and value from the Transformation plan are now being realized. Net loss after tax reduced by $32.5 million- $15.6 million, with consistent improvement across the year. A big focus this year was on cost out, and we achieved a $27 million reduction in operating expenses. This comprises labor saving of approximately $15 million and a further $12 million in cost out and efficiency improvements. Transport costs as a percentage of freight revenue were down 5.1% points year- on- year. Gross margin improved strongly despite the flat revenue result, highlighting the effectiveness of the cost out and efficiency program.
Gross margin percentage was up 4.1% points year- on- year, with gross margin dollars up 13.4%. This provides us with stronger operating leverage, and when volumes return increased activity will drive further gross margin expansion. Normalized earnings growth was seen across all divisions except warehousing. Normalized earnings were up 61% on the prior year, with four consecutive quarters of improving normalized EBT. In Q4 FY 2025, we saw our strongest quarterly normalized EBT result in two years. Funding and capital remains an important focus for the Board and management. We established a new funding partnership in August last year, and in February this year, we extended our bank facility through to August 2026. We have a prudent approach to capital expenditure, and the sale of surplus equipment remains a focus. Operating cash flow benefited from improved operating results and disciplined working capital management.
This was up 35% to $25.3 million, with adjusted net operating cash flow of $0.3 million. Thank you. I'll now hand you back to Paul.
Thanks, Lee. We are very clear about the work we still need to do to deliver the value and performance that our shareholders expect from us. Our goals can be summarized as the following. A strong team that delivers, delight in our customers, effective use of our assets, and finally, financial strength and value creation. Our four-year New Horizons roadmap clearly sets out our pathway to FY 2028 as we reset and step up. Our focus is firmly on achieving our goal to become the preferred logistics provider in New Zealand. Now, with one year of the Accelerate program left to run, we are moving from cost out to value creation as we continue to build on the strong foundational platform that has been established over the last year.
Our priorities this year are clear. To continue building value in our freight business, which is our largest business unit and our largest opportunity. In warehousing, we need to step change our performance. Work is already underway on this, and we are seeing momentum with customer retention and new business wins. Auckland capacity and customer mix is improving coming into summer, and we're very focused on filling capacity in the South Island. Productivity initiatives are underway, and we will see the benefits of the site exits this year. We will continue to invest in our people and capabilities, including technology to enable data-driven business decisions and the right systems to win in market. At the heart of it all are our customers and simply delivering excellent customer service and solutions that create value.
Whilst the timing and speed of an economic recovery still remain uncertain, MOVE is positioned well with a right-sized business providing broad and relevant propositions across the freight and logistics sector. Underpinned now by a low-cost base, our national network, a great team, and strong partnerships, we are starting to move from cost out to value creation. The focus on gross margin has created a stronger foundation with the full benefits of the cost out program to be realized in the current year. A lift in market activity and customer demand, combined with improvements from the Transformation plan, will enable earnings growth. We do remain on track, seeing a positive normalized earnings before tax in FY 2026. Now, before we turn to your questions, I just want to recognize and thank our people.
In a tough environment, they have stepped up, and their energy, adaptability, and drive continue to be our greatest assets. Thank you. We're now happy to take any questions, and I'll hand back over to the Operator to manage these.
Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box. I will now hand over to Jackie for webcast questions.
Thank you. Our first question is from Paul Grant. He says, do you think there will be any month in FY 2026 when you achieve a positive net profit after tax?
I can't put an exact month on it. We've got a clear plan and a clear forecast. At the moment, we're in the slower months, you know, in the freight and logistics sector. July and August are slower months, and then it starts to ramp up.
Next question is from John Raiden. With equity in the company eroding and net profit after tax not ensured to be positive in this financial year, are we likely to see a capital raise coming up?
As per our announcement today, we are looking, our outlook is that we're expecting a positive EBT. However, we continue to be focused on our structure and our capital to ensure we have adequate capital to run both the business and support our growth.
Next question is from Stacy Goldsworthy. What is your EBT range guidance for the coming year?
We're not sharing the guidance at this point. There's still uncertainty in the economy. What we are confirming is that we will return to positive EBT in FY 2026.
Next question is from Chris Dunfee. The realignment of fuel from warehousing to freight needs a bridge so that shareholders can see what the meaningful changes in the core freight revenue imagine. Without providing the usual responses to fuel's revenue imagine, management should speak to the core freight result.
Hey Chris, given fuel is one customer, yeah, there's no way you'd share that.
We have no more online questions.
There are no further questions at this time. I'll now hand back to Mr. Millward for closing remarks.
I thank you for your support this year. I think we've made tremendous progress, although we're very clear that we still have work to do, and we look forward to delivering that for you, our shareholders. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.