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- Inghams Group (ING) tops the gainers on the ASX in early afternoon trade as its FY23 report pleased investors
- Net profits are up 72 per cent year-on-year to $60.4 million
- Total earnings are up 13 per cent to $418.5 million
- The company held $136 million in cash at the end of June
- Ingham’s management noted further inflationary price increases may be necessitated
- ING shares are up 15.3 per cent, trading at $3.20 at 2:37 pm AEST
Inghams Group’s (ING) share price shot more than 15 per cent in early afternoon trade, following the company’s announcement of a 72 per cent year-on-year (YoY) increase in net profits after tax, totalling $60.4 million.
The significant rise in share price suggests that the market may not have anticipated such a robust outcome and is now eager to capitalise on the positive development.
As of year-to-date, Inghams’ share price has advanced by 10.49 per cent.
The poultry wholesaler’s earnings before interest, tax, depreciation and amortisation (EBITDA) were also up, 13 per cent YoY, to $418.5 million.
At the close of FY23, the company held $136 million in cash, reflecting a YoY increase of $4.5 million.
Despite this, core poultry sales volumes experienced a slight YoY decline of 0.4 percent, resulting in a relatively flat reading.
Inghams will distribute a fully franked final dividend of 10 cents per share, culminating in total FY2023 declared dividends of 14.5 cents. This represents a notable 107 per cent increase compared to the prior corresponding period.
The market seemed unperturbed by the company’s net debt of $262.5 million and the extension of $345 million in debt facilities for an additional 2 years, extending into November 2025.
“Overall, the poultry sector remains attractive, underpinned by robust demand with key long-term trends intact. Our underlying business is in good shape, and our diverse network and integrated operating model provides a strong platform for earnings growth,” ING CEO Andrew Reeves said.
“During the course of FY23 we productively engaged with our customers to implement price increases across all channels.
“The price increases were necessitated by the significant increase in feed costs, and growth in other key input costs, with market demand for poultry that continues to outpace supply.”
The company did acknowledge the likelihood of further price increases, a factor that could potentially impact Ingham’s business, as it supplies numerous retailers and establishments, including fast-food giant KFC.
In terms of expansions, Inghams has received approval from the Overseas Investment Office for its planned acquisition of Bromley Park Hatcheries in New Zealand. This transaction remains subject to several conditions before final execution.
Inghams’ shares were up 15.1 per cent, trading at $3.20 at 2:37 pm AEST.
