Poultry business Ingham’s has reported a net profit after tax of $35.3 million, up 37 per cent in its FY2021 half year results. The company has invested in new hatcheries, reduced inventory accumulated due to COVID-19 and recorded 4.6 per cent revenue growth.
- group core poultry volume growth of 4.0% on the prior corresponding period (pcp) and 5.6% on the second half of FY20, reflecting strengthened demand across most channels and the return of;
- overall trading volumes to pre COVID-19 levels;
- solid total revenue growth of 4.6% despite declining external feed revenue, with total poultry revenue growth of 6.1%, ahead of volume growth;
- good progress achieved in the reduction of frozen poultry inventory arising in FY20 due to COVID-19, down $42.3million during the half year and now close to normal levels;
- statutory and Underlying EBITDA growth of 5.0% and 4.3% respectively driven by volume growth and improvements in operational efficiencies, Underlying EBITDA pre AASB 16 up $9.0 million or 9.8%;
- statutory NPAT of $35.3 million up 34.7% and Underlying NPAT of $37.5 million up 28.4%, with Underlying NPAT pre AASB 16 up 10.7%;
- leverage1 of 1.7x down from 1.8x at June 2020 with Net Debt of $327.5 million at December 2020; and
- interim dividend of 7.5 cps (fully franked), up 0.2 cps on pcp, reflecting a payout ratio of 74.3% of Underlying NPAT post AASB 16, in line with the revised dividend policy.
Ingham’s CEO and managing director Jim Leighton said the company was pleased with the results in like of ongoing COVID-19 impacts, high feed prices and the closure of export channels due to biosecurity issues in Victoria.
The construction of new HatchTech hatcheries in Victoria and Western Australia as well as seasonal working capital were the main causes of Ingham’s net debt increasing by $12.8 million to $327.5 million. Victoria will be commissioned mid-2021 and Western Australia in the second half of the year.
The bumper wheat crop last year (more than 30 million tonnes) hasn’t delivered price easing as expected due to strong international demand and competitive pricing of Australian wheat against international commodity prices. Soymeal prices also rallied in 1H21. Leighton said the company expects the net impact of lower prices to be modest.
Working capital benefited from reducing poultry inventory by $42.3 million, but was more than offset by the typical increase in debtors associated with Christmas trading and 26 December 2020 financial close, the company said.
Operational cash flow in 1H21 was 12 per cent higher than the previous corresponding period (pcp) at $181.9 million ($58.9 million pre AASB 16).