Inghams Group (ING) H1 2025 earnings summary

Executive summary

• First half FY25 EBITDA (pre-AASB 16) reached AUD 124 million, the second highest since listing, despite a 1.9% revenue decline and lower volumes, reflecting strong cost management and moderated feed costs.

• New business wins in retail and QSR channels replaced about 75% of the Woolworths volume reduction.

• Retail volumes grew 3.1% and New Zealand volumes rose 5.0% year-over-year, with the Bostock Brothers acquisition contributing 2.9 percentage points to NZ growth.

• Integration of Bostock Brothers is on track, supporting NZ growth and premium positioning.

• Disciplined pricing and operational efficiency maintained amid customer portfolio changes.

Financial highlights

• Revenue declined 1.9% year-over-year to AUD 1.61 billion, mainly due to a 2.7% drop in core poultry volume.

• Underlying EBITDA (pre-AASB 16) fell 10.4% year-over-year to AUD 124 million; reported EBITDA was AUD 210.4 million, down 17.1%.

• Gross profit margin decreased to 24.1% from 26.7% year-over-year.

• Cash conversion improved to 94.5% on better working capital management.

• Net debt increased by AUD 49.4 million to AUD 397.3 million, mainly due to the Bostock acquisition.

• Interim fully franked dividend of AUD 0.11 per share declared, payout ratio 72.4%.

Outlook and guidance

• FY25 guidance reaffirmed: core poultry volumes expected to decline 1%-3% versus normalized FY24, with underlying EBITDA (pre-AASB 16) forecast at AUD 236–250 million, representing flat to 6% growth.

• Modest growth in core poultry NSP expected; net benefit from lower feed costs anticipated.

• Annualised cost savings from procurement and operational initiatives expected to offset inflation.

• Total capital expenditure and acquisitions forecast at AUD 100–120 million for FY25.

• Consumer conditions in Australia remain subdued but may improve with expected interest rate cuts; New Zealand shows signs of recovery after rate reductions.