Inghams Group’s long-term lease of the Bolivar primary processing plant in Burton, South Australia, is about to end as the poultry business signals the purchase of its land and buildings. Inghams had leased the site since 2014.
Inghams will acquire 100 per cent of the units in Soilbuild Australia Sub-Trust No.2 (which is the landowner and landlord under the lease) from the Soilbuild Australia Trust for $76million plus acquisition costs.
The acquisition was a strategically important investment and expected to be earnings per share (EPS) neutral, the company said.
“The acquisition aligns with the desire to own property on a freehold basis where commercially and operationally sensible, introduces more flexibility into the primary processing network, removes the future escalation of rental costs in connection with the site and secures the ability to remain at an operationally important and established location over the medium to long term,” Inghams said in a statement to the ASX.
It will fund the deal using the company’s existing debt facility and the final purchase price is subject to working capital adjustments at the date of completion.
The purchase is expected to settle in mid-December 2023, subject to conditions.
Inghams showed a strong recovery in FY23 after a difficult FY22. EBITDA was up 13 per cent to $418,5 million, and NPAT rose 72 per cent to $60.4 million.