Plasson: How much cash really remains after inventory, CAPEX, leases and dividends
In 2025 Plasson generated NIS 260.6 million from operating cash flow, but after NIS 142.3 million of reported CAPEX, NIS 50.3 million of lease-principal payments and NIS 76.4 million of dividends, no cash surplus was left. This is not a liquidity-stress story, but a capital-allocation story inside a business that deliberately carries a heavy inventory base.
What This Follow-up Isolates
The main article already identified the tension: Plasson ended 2025 with stable operations, positive working capital and wide covenant headroom, but that did not automatically turn into surplus cash. This follow-up isolates the cash bridge rather than the accounting profit.
I am using an all-in cash flexibility lens here. That means asking not how much cash the business can generate before investment, but how much is actually left after the period's real cash uses. On that basis, NIS 260.6 million of cash from operations looks strong, but reported CAPEX of NIS 142.3 million, lease-principal payments of NIS 50.3 million and dividends of NIS 76.4 million already take the bridge to a negative NIS 8.4 million.
That is the core point. Plasson does not look like a company under liquidity stress. Working capital still stood at NIS 642.0 million at year-end, group credit facilities were about NIS 838 million near publication with about NIS 442 million utilized, and Plasson's equity ratio was 50.9% versus a 27% minimum. Precisely because the balance sheet is strong, it is worth separating liquidity from truly surplus cash.
Inventory Is Part of the Model, Not a Bug
Plasson largely operates on a produce-to-stock model rather than a made-to-order one. That is not a footnote. It is a structural choice that shapes the cash bridge. Raw-material inventory policy is roughly 60 days of production consumption, finished-goods policy is two to three months of sales, and the marketing subsidiaries also usually carry two to three months of sales in stock. Since October 2023, the company has also chosen to add another four weeks of finished-goods inventory at most foreign subsidiaries in order to protect supply continuity.
That means the right question is not whether inventory "jumped" in a given quarter, but how much cash Plasson chooses to tie up through the model itself. At the end of 2025, inventory stood at NIS 621.2 million, versus NIS 614.7 million at the end of 2024. That is a very heavy cash base, roughly 2.4 times 2025 operating cash flow. Even with good execution, it limits how much cash can actually be left over.
At the same time, 2025 was not a year of working-capital deterioration. Working capital was almost unchanged, NIS 642.0 million versus NIS 643.4 million. Average customer-credit days improved to about 60 from about 68, while average supplier-credit days lengthened to about 37 from about 35. The cash-flow statement also shows inventory contributing NIS 6.9 million, receivables and other debtors consuming NIS 31.8 million, and suppliers and other payables contributing NIS 56.5 million. In other words, Plasson managed working capital well. The issue is not weak discipline. It is a structurally heavy inventory base.
The Cash Bridge: Operating Cash Flow No Longer Covers Everything
The relevant bridge here uses reported numbers only. There is no maintenance-CAPEX estimate, and there is no mixing between total lease cash and lease principal. I am comparing operating cash flow against reported fixed-asset purchases, lease-principal payments and dividends actually paid.
That chart shows why 2025 is different. In 2023, Plasson still had about NIS 172.2 million left after those three items. In 2024, that cushion had already fallen to about NIS 55.2 million. In 2025, it moved into negative territory, roughly NIS 8.4 million below zero. This did not happen because operating cash flow collapsed. On the contrary, operating cash flow improved versus 2024. The change came from cash uses, especially CAPEX, which jumped to NIS 142.3 million from NIS 51.4 million a year earlier, while dividends rose to NIS 76.4 million from NIS 66.8 million.
| Bridge step | 2025 amount | What it means |
|---|---|---|
| Cash from operations | NIS 260.6 million | Starting point |
| Reported CAPEX | (NIS 142.3 million) | Fixed-asset purchases |
| Lease-principal payments | (NIS 50.3 million) | Excludes other lease-related cash items |
| Dividends to shareholders | (NIS 76.4 million) | Two payments, in September and December |
| Cash left after the three items | (NIS 8.4 million) | Surplus cash is gone at this point |
| Interest paid | (NIS 22.7 million) | Classified in financing cash flow |
| Dividend to non-controlling interests | (NIS 2.0 million) | Additional cash use |
| All-in cash left before bank-debt principal | (NIS 33.1 million) | Already a very thin bridge |
The implication is that Plasson still knows how to generate cash, but in 2025 it chose to spend it faster than it generated it across the main cash uses. That is a meaningful distinction between a company with strong operating cash flow and a company with real surplus free cash.
The Bathroom and Kitchen Disposal Helped the Optics, But Did Not Solve the Bridge
The sale of the bathroom and kitchen activity, completed on July 1, 2025, matters here because it highlights the gap between the headline value of a disposal and the cash that actually arrived. The base consideration is NIS 35 million plus VAT, but only NIS 20 million was paid near closing, while the remaining NIS 15 million is spread over 78 equal monthly payments bearing interest. On top of that, there is a potential earn-out of up to NIS 7 million over ten years and a brand-license agreement worth NIS 15 million in aggregate over the same period.
So the disposal helped in 2025, but it did not provide enough immediate cash to erase the tension in the bridge. The cash-flow statement recorded NIS 21.0 million of proceeds from the activity sale, while year-end other debtors included NIS 20.1 million linked to that transaction. That is the key point: part of the deal already exists as a claim, but not yet as cash.
The inventory side was also not fully closed by year-end. As of December 31, 2025, inventory tied to the sold activity had been sold to the buyer for about NIS 17.3 million, while another roughly NIS 4.4 million of inventory was still expected to be sold by the end of the first quarter of 2026. At the same time, the company recorded a one-off capital gain of about NIS 12.8 million before tax. That is exactly why profit or the headline deal value is not enough. For cash flexibility, only what has actually turned into cash matters.
Why Note 16 Still Matters, Even Without Covenant Stress
This continuation does not lead to a conclusion that Plasson has entered financing trouble. On the contrary, Note 16 shows a company with comfortable headroom: equity accounted for 50.9% of Plasson's consolidated balance sheet versus a minimum threshold of 27%, and its debt-coverage ratio was 1.5 versus a ceiling of 4. That is wide room. In addition, close to publication the group had about NIS 838 million of credit facilities, of which about NIS 442 million was utilized.
But cash-flexibility analysis does not end with the word "comfortable." At the end of 2025, short-term bank credit and current maturities exposed in current liabilities stood at NIS 306.6 million, while long-term loans added another NIS 122.2 million. During the year, Plasson repaid NIS 65.4 million of long-term debt, NIS 50.3 million of lease principal, NIS 22.7 million of interest, and a net NIS 48.6 million of short-term bank credit. Against that, it drew NIS 75.8 million of new long-term loans. The balance sheet is not under strain, but it is clearly part of the mechanism that closes the gap between investment, distributions and cash generation.
There is also an important quality point here. The company explains that short-term credit is taken mainly in foreign currency, in line with the currencies in which group companies sell to customers, so it also functions as a hedge against foreign-currency customer credit. In other words, this short-term debt is not just bridge financing in the narrow sense. It is part of the operating structure. Still, from a shareholder perspective the result is the same: cash flexibility depends not only on operating surplus, but also on active management of credit lines.
What Needs To Happen Now
The first thing that needs to happen over the next 2 to 4 quarters is proof that the unusually high 2025 CAPEX is generating an operating return, or at least beginning to normalize back to a more comfortable level. As long as CAPEX stays here, it is hard to argue that Plasson has real surplus cash alongside a full dividend.
The second is actual collection of the deferred consideration from the bathroom and kitchen disposal, together with closure of the remaining inventory tied to the transaction. As long as part of the deal sits in receivables rather than cash, its effect on the bridge remains partial.
The third is a test of whether the overseas safety-stock buffer built since October 2023 remains a permanent part of the model even if logistics pressure eases. If it does, then high inventory should be treated not as a transition phase but as a new baseline.
Bottom line: Plasson is not short of liquidity. What it lacked in 2025 was real surplus cash after the decisions it chose to make. That is an important distinction. A company can have a very strong balance sheet and still show that dividends, CAPEX and leases already consumed the full year's operating cash flow.
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