Inghams Group has delivered on its earnings guidance despite significant headwinds, with underlying EBITDA pre AASB 16 of $186.4 million falling within the $180-200 million range. More importantly, the company returned to core poultry volume growth of 1.9 percent, marking a turnaround from the prior year decline and signaling that management’s operational initiatives are beginning to take hold in a challenging market.
The volume growth came as the company raised net selling prices 1.4 percent to $6.40 per kilogram, a meaningful achievement in a competitive commodity sector. The combination of higher volumes and prices reflects Inghams’ success in customer diversification and reducing the heavy discounting that plagued the previous year. The broader revenue growth of 2.4 percent to $3.23 billion supports this narrative, showing the top line is stabilizing even as earnings decline year-on-year reflects the tough operating environment.
Underneath the headline earnings figures lie genuinely strong operational achievements. The company delivered $82.3 million in cost savings at the upper end of its guidance range through continuous improvement and procurement initiatives. Even after accounting for a $4.7 million net impact from Middle East geopolitical disruptions to logistics costs, this demonstrates disciplined execution by management. The strength of cash generation at 105.5 percent conversion allowed Inghams to reduce net debt by $27.1 million, bringing leverage to 2.2 times, a range the market would consider sustainable.
The reported net profit after tax decline of 61.5 percent to $34.6 million carries an important qualifier. A $12.7 million tax provision related to an ATO objection regarding R&D tax offset claims from 2019-2021 materially impacts the reported figure. The company has lodged an objection and intends to defend its position, but the outcome remains unresolved and represents a potential earnings headwind or tailwind depending on the tax office’s determination.
Management has emphasized that second-half earnings were materially above the first half, suggesting improved underlying momentum into FY27. Inventories have normalized, new customer volumes were successfully delivered, and the Australian market returned to growth. The company enters the new financial year with a refreshed management team, a more balanced network, and a stronger customer portfolio. Investors should watch whether the operational improvements demonstrated in the second half can be sustained, whether cost savings continue flowing through to earnings, and how customer diversification efforts progress. This announcement is price sensitive and has been flagged as material by the ASX.
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About Inghams Group Limited (ASX: ING)
Inghams Group Limited is the largest vertically integrated poultry producer in Australia and New Zealand, producing and selling chicken and turkey products under the Ingham’s brand. The company holds approximately 40% market share in Australia and 35% market share in New Zealand, and also produces stockfeed for poultry and pig industries. It is headquartered in North Ryde, Australia and has been operating since 1918.
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