Golf: What the New Logistics Center Really Does to Cash After Leases and Debt Service
Golf's end-2025 balance-sheet slide shows a net financial surplus of NIS 37.7 million, but that is too narrow a lens. After lease principal, lease interest, debt repayment, CAPEX, and dividends, 2025 did not create a new cash cushion. It showed how quickly the new logistics center now has to start saving money.
The main article framed 2026 at Golf as a test of the new logistics center and cash discipline. This follow-up isolates the more precise friction point: how the same logistics move allows management to present a net financial surplus in the March 2026 deck, while leaving a much tighter cash cushion for shareholders once leases, debt service, and dividends are pulled back into the picture.
This is not an accounting mistake. It is a choice of lens. On slide 13, the company shows NIS 94.6 million of cash and short-term investments against NIS 56.9 million of bank and other loans, which produces a net financial surplus of NIS 37.7 million. That is a legitimate read if the question is narrow financial debt. It is an incomplete read if the question is how much cash really remains after a retail and logistics footprint that sits on heavy lease obligations.
The full balance sheet already tells a different story. Alongside the same NIS 94.6 million of cash and short-term investments, the company ends 2025 with NIS 729.7 million of lease liabilities and NIS 647.9 million of right-of-use assets. That does not mean a lease liability is identical to a bank loan. It does mean that, in a capital-flexibility discussion, the NIS 37.7 million surplus cannot be treated as if it were the group's freely available cash.
| Lens | What it includes | What it shows at the end of 2025 |
|---|---|---|
| Presentation lens | Cash and short-term investments versus bank and other loans | NIS 37.7m net financial surplus |
| Balance-sheet lens | The same cash, but also lease liabilities of NIS 729.7m | A capital structure with a much heavier long-duration obligation layer |
| Covenant lens | Financial tests, some of them measured excluding IFRS 16 | Comfort for lenders, not necessarily wide cash slack for shareholders |
Where leases really sit in the cash bridge
The definition matters here. This continuation uses an all-in cash flexibility frame because the issue is not what the business could theoretically generate before selected uses. The issue is what actually remained after the cash uses that were recorded in the year. The company also does not disclose a maintenance CAPEX number, so there is no clean basis here for a narrower maintenance-cash lens.
Note 12 provides the exact breakdown that the deck does not. In 2025, total negative cash flow for leases was NIS 172.0 million. Out of that, NIS 134.9 million came from fixed lease payments and NIS 37.1 million came from variable lease payments. The cash flow statement shows that the NIS 134.9 million fixed component was made up of NIS 99.8 million of lease liability repayment and NIS 35.1 million of lease interest paid.
That distinction is critical. Variable lease payments are already embedded inside operating cash flow, so they cannot be subtracted a second time from a bridge that starts with operating cash flow. Lease principal and lease interest sit outside operating cash flow, and that is exactly why they need to be added back into the real cash-burden discussion.
| Lease component | 2025 | Where it hits cash flow |
|---|---|---|
| Lease liability repayment | NIS 99.8m | Financing cash flow |
| Lease interest paid | NIS 35.1m | Financing cash flow |
| Variable lease payments | NIS 37.1m | Already inside operating cash flow |
| Total negative cash flow for leases | NIS 172.0m | The full lease burden |
The conclusion is sharp. Cash flow from operating activities was NIS 233.6 million in 2025, but NIS 63.9 million of that came from inventory reduction. In other words, even the starting point already leaned partly on working-capital release. From there, the uses that the narrow balance-sheet slide does not really capture need to be pulled back in.
That bridge says something very simple: after lease principal, lease interest, reported CAPEX, repayment of long-term loans and credit, cash interest, and the NIS 50 million dividend, 2025 ends with an all-in deficit of about NIS 40.6 million before fresh funding. If the view is widened to total lease cash, including the variable piece that is already counted inside operating cash flow, the lease burden reaches NIS 172.0 million, equal to 73.6% of operating cash flow.
That is the center of the issue. Golf did generate a lot of cash in 2025, but it did not generate a cushion that is nearly as wide as the narrow financial-surplus slide suggests. The gap comes exactly from the point where IFRS 16, lease principal, lease interest, and dividends meet.
The new logistics center eases the banking story more than the cash story
Section 13.6 explains why that gap exists. The new Caesarea logistics center replaces the Yekum site, the Ga'ash site, and the outsourced logistics activity near Migdal HaEmek. It covers about 29,000 square meters, carries monthly rent and management fees of about NIS 1.2 million, runs until January 15, 2040, and includes an extension option through February 15, 2047. In the presentation, management marks the end of 2025 as the start of sorter installation and early 2026 as the point where the new sorting process is already operating.
The problem is that the savings still do not show up in the cash result. In 2025, total expense for the new logistics center was NIS 53.6 million, versus NIS 47.7 million for the old logistics footprint in 2024. So at the end of the transition year, Golf is already carrying a logistics structure that costs NIS 5.9 million more than the prior year, while the expected efficiency benefit still sits in management's forward-looking framing rather than in a proven reported result.
At the same time, the covenant picture looks much calmer. The company discloses a minimum tangible equity covenant of NIS 150 million and a net financial debt to net working capital ratio that may not exceed 0.8. At the end of 2025, tangible equity stood at about NIS 229 million and the ratio of financial debt to operating working capital stood at minus 18%. The company also had NIS 61 million of unused credit lines. At banks B and C, the company explicitly says the financial tests are measured on the accounts excluding IFRS 16.
That is exactly the point the market can miss. The covenant and the cash cushion are not the same thing. At least for part of the banking system, the lease layer is not being read in the same way that an equity holder needs to read it when asking what remains after all cash uses. So the company can be comfortably inside covenant limits and still not be especially wide in real discretionary cash.
Dividend policy sharpens that tension even more. The company says it aims to distribute at least half of annual net profit, subject to the distribution tests, liquidity, and board discretion. During 2025 it paid NIS 50 million of dividends, and on March 10, 2026 it approved another NIS 10 million dividend for payment on March 26, 2026. At December 31, 2025, distributable profits stood at about NIS 59 million. In formal terms, that means the company still had room to approve another distribution. In cash terms, every dividend payment competes with the same cushion that the new logistics center has not yet rebuilt.
The bottom line of this follow-up is straightforward: the new logistics center does not yet prove excess cash. It mainly explains why the presentation, the covenant package, and the balance sheet can tell three different stories at the same year-end date. If automation and logistics consolidation do start to save real money in 2026, that tension can fade quickly. If they do not, the NIS 37.7 million net financial surplus will remain mostly a presentation number that is too narrow relative to the lease burden, debt service, and shareholder distributions drawing on the same pool of cash.
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