Inghams Group Ltd (ASX:ING) profits as Australians turn to chicken

Inghams Group Ltd (ASX:ING) has increased profits amid growth of core chicken and turkey business

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Leading chicken producer Inghams Group Ltd (ASX: ING) has posted an underlying net profit after tax of $112.5 million for FY 2018, representing a gain of 10.3% on the company's results for the prior corresponding period.

Inghams, with operations centred in Australia and New Zealand where the company supplies markets with a range of poultry products and feed for livestock, stated that its core chicken and turkey business had grown by 3.2%.

The increase in sales of the company's chicken and turkey business helped drive up profits as Inghams' EBITDA for FY 2018 increased by 7.1% on the previous year's result to come in at $208.9 million while revenue dropped 2.2% to $2.37 billion.

The group was able to reduce net debt by $154.2 million to $145.4 million and will pay shareholders a final dividend of 11.6 cents per share, bringing the company's total dividend payable for FY 2018 to 21.1 cents per share.

The Inghams share price has gained about 10% in the past year and is currently trading at around $3.77 after hitting an all-high on 1 June of $3.99 before embarking on a sharp descent.

The chicken producer's share price copped a battering amid news that managing director Mick McMahan was planning to step down.

Key management shakeups are not the only concerns weighing on investors' minds.

As a supplier for supermarkets including Woolworths Group Ltd (ASX: WOW) and Coles, owned by Wesfarmers Ltd (ASX: WES), changes in the competitive landscape could impact Inghams' sales.

It is also possible that the drought could hit the company's livestock feed business as well as having an impact on the company's core chicken and turkey business.

But Inghams, which started with a rooster and six hens in a piece of bushland outside Sydney in 1918 before eventually listing on the ASX in 2016, has proved it is a resilient company.

Besides, as Inghams managing director Mick McMahan recently told News Corp (ASX: NWS): when times are tough, Australians turn to chicken.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »