TGI: What cash is really left after dividends, Spain and the adjustments
TGI ended 2025 with NIS 23.7 million of adjusted profit in the presentation and NIS 23.6 million of year-end cash, but the all-in bridge leaves only about NIS 2.6 million after reported CAPEX, the remaining Lordan consideration, dividends and lease payments, before the option-exercise cash enters the picture. Spain is still in the capital-draw phase, not yet in the cash-return phase.
The main article argued that 2025 looked cleaner than it really was. This follow-up isolates that gap more precisely: how much of TGI's 2025 profit really came through the business, and how much of the year-end cash position leaned on one-off compensation, fresh equity from option exercises and a presentation that steers investors toward the adjusted number.
The short answer is that 2025 was not a balance-sheet stress year, but it was also not the clean year implied by the headline. In management's presentation, adjusted net profit attributable to shareholders rises from NIS 21.5 million to NIS 23.7 million. In the annual report itself, profit attributable to shareholders actually falls from NIS 17.3 million to NIS 16.0 million. And on the cash side, if the right lens is all-in cash flexibility, meaning cash left after the year's actual uses, only about NIS 2.6 million remains before option-exercise proceeds.
That is not cosmetic. It is the difference between a year that looks like a clean step up in profit and cash, and a year in which Tmach is carrying the group while Lordan still absorbs capital, Spain still needs proof, and the 2025 residual cash generation is much tighter than the top line suggests.
| Layer | 2025 | Why it matters |
|---|---|---|
| Reported profit attributable to shareholders | NIS 16.0 million | The real listed-shareholder starting point |
| Adjusted profit attributable in the presentation | NIS 23.7 million | The number that turns a reported decline into adjusted growth |
| Iron Swords compensation inside profit | NIS 8.45 million | A material one-off item still left inside the "cleaner" view |
| Cash flow from continuing operating activities | NIS 37.8 million | The year's underlying cash base before uses |
| Cash left after the main actual uses | NIS 2.6 million | That is no longer a wide cushion |
| Equity cash from option exercises | NIS 11.8 million | A key reason the cash balance ends the year looking fuller |
The presentation turns a decline into growth
The first point is that the presentation and the report do not tell the same year. In the presentation, adjusted net profit attributable to shareholders rises 10.2% to NIS 23.7 million. In the report, profit attributable to shareholders falls to NIS 15.956 million from NIS 17.258 million in 2024. In simple terms, the adjusted basis does not just enlarge the number. It changes the direction of the story.
According to the presentation, the adjustment includes two items: discontinued operations and NIS 6.4 million of excess-cost amortization. That is legitimate disclosure. The problem is that those are not the only layers cleaning up the year. Inside reported operating profit of NIS 27.216 million there is also NIS 8.453 million of Iron Swords compensation income. So even after the adjustment management chooses to highlight, the year still benefits from a material one-off item that remains inside the supposedly cleaner number.
That is exactly why the 2024-to-2025 bridge matters. Operating profit rose by only NIS 2.606 million, from NIS 24.610 million to NIS 27.216 million. At the same time, the Iron Swords compensation item rose from NIS 2.350 million to NIS 8.453 million, a NIS 6.103 million gap. In other words, the extra compensation alone was larger than the full increase in operating profit. That is the core earnings-quality issue. It is not necessary to argue that the compensation is unreal. It is enough to see that the improvement in profitability did not come entirely from the regular business.
This chart shows why the first read can mislead. Anyone looking only at the presentation sees growth. Anyone going back to the report sees decline. Once that is combined with the fact that 2025 still carries the one-off compensation benefit, it becomes much clearer why the year looks cleaner than the business itself really generated.
What was actually left after the year's cash uses
At this stage the framing matters. Since the question here is what cash was really left after dividends, Spain and the adjustments, the relevant lens is all-in cash flexibility, not a pre-everything operating-cash number. That means starting with cash flow from continuing operating activities and then deducting the year's real cash uses.
That bridge is fairly simple: NIS 37.772 million of continuing operating cash flow, less NIS 7.558 million of reported CAPEX, less NIS 7.850 million of the remaining consideration for Lordan, less NIS 15.112 million of dividends paid, and less NIS 4.683 million of lease-liability repayments. After all of that, only about NIS 2.569 million remains.
That is the number that matters most. It does not say TGI is short of cash. It does say that the cushion left after the actual uses is far narrower than the impression created by NIS 23.555 million of year-end cash or a 62% equity ratio in the presentation. Those balance-sheet numbers are real, but they are not the same question as how much cash was truly left free after the year had already paid for itself.
This is where the option exercises enter the picture. The cash-flow statement includes NIS 11.841 million of equity issuance. Net cash rose by NIS 14.837 million in 2025. Put differently, most of the increase in the cash balance that year was explained by fresh equity cash, not just by surplus cash still left after all the uses had been funded.
The stricter read matters too. In November 2025 the company received the remaining Iron Swords compensation payment of about NIS 12.4 million. If that one-off receipt is also removed in order to get a cleaner recurring-cash lens, the same bridge flips from about NIS 2.6 million left to roughly NIS 9.8 million negative even before option-exercise proceeds. That means 2025 leaned on a one-off layer on both sides of the story, in earnings and in cash.
Spain is still pulling capital forward
Spain matters here not because it is already the biggest reason cash is pressured, but because it is still not at the stage where it returns cash to the group. Lordan UK committed to lend LIC up to EUR 1.275 million for machinery, and by December 31, 2025 it had already advanced about EUR 540 thousand, roughly NIS 2 million. The production line itself is only expected to begin operating in the second quarter of 2026.
The implication is straightforward: part of the year-end cash balance is not truly surplus. It sits against a move that is still drawing capital before it proves output, sales or cash generation. That is even more relevant once it is remembered that Lordan UK also holds a Call option to buy additional Sereva shares until the end of 2026 for EUR 512.5 thousand. That is an option rather than an obligation, but it underlines the point that Spain is still a project that may request more capital before it starts returning any.
This is also why the pace of distributions matters. During 2025 the company paid NIS 15.112 million of dividends, almost the full level of reported profit attributable to shareholders, and in March 2026 another NIS 4 million dividend was declared. That can be read as management confidence in the balance sheet. It can also be read as a choice to keep distributing cash at a stage when Spain is still building a line, not when Spain has already begun funding itself.
Bottom line
The clean way to read 2025 starts with four simple numbers: NIS 15.956 million of reported profit attributable to shareholders, NIS 23.7 million of adjusted profit in the presentation, NIS 2.569 million of cash left after the actual uses, and NIS 11.841 million of fresh equity cash from option exercises. Put side by side, they show a year that was weaker than the presentation framing implies, but still not balance-sheet weak.
It is important to say that directly: this is not a liquidity-stress thesis. At the end of 2025 TGI had NIS 23.555 million of cash, NIS 72 million of unused banking lines and a 62% equity ratio. The strongest counter-case is real. Anyone arguing that this read is too harsh can point to a comfortable balance sheet, compliance with the financial covenants and a genuine ability to fund Spain without immediate strain.
But the debate here is not whether the company can finance 2026. The debate is what 2025 really produced once the cleaning layers are separated. And the answer is that the year looked better after adjustments, after Iron Swords compensation and after fresh equity cash. That is why the real 2026 test will not be whether the cash balance still looks respectable. It will be whether the business itself, especially Lordan and the Spanish build-out, can fund both dividends and investment without leaning again on one-offs.
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