Inghams Group (ASX: ING) reported a 40.5% decline in underlying net profit after tax to $56.6 million for the 2026 fiscal year, even as revenue rose 2.4% to $3.23 billion, reflecting the dual pressures of volume recovery and margin compression.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 21.2% to $186.4 million, while reported net profit dropped 61.5% to $34.6 million. Core poultry volumes increased 1.9% to 470,100 tonnes, with Australian retail excluding Woolworths up 17.2% and quick-service restaurant channels up 4.1%. However, net selling prices rose only 1.4% to $6.40 per kilogram, constrained by softer wholesale pricing that fell to approximately $4.50 per kilogram in the fourth quarter from peaks near $4.91 earlier in the year.
Total costs excluding depreciation climbed 6.2% to $1.70 billion, driven by $116.6 million in underlying cost inflation across labor, packaging, freight and other operating expenses. External headwinds, including the Middle East conflict, added $13.2 million in costs, while inventory rebalancing and production normalization expenses totaled $17.9 million. Offsetting these pressures, feed cost savings delivered $82.3 million in benefits, and continuous improvement initiatives generated $27.6 million in savings.
Capital expenditure for the year totaled $77.4 million, down from $104.1 million in FY25, with $41.7 million directed toward growth and strategic investments. This included $17.4 million for tray pack automation in Queensland and South Australia, $10.7 million for processing line upgrades in Western Australia, and $8.5 million for a new advanced ingredients facility expected to add $5 million in annual EBITDA. Sustaining capital accounted for $28.9 million, while optimization spending reached $6.8 million.
Net debt declined by $27.1 million to $403.3 million, and committed undrawn facilities stood at $149 million as of June 27, 2026. Leverage remained elevated at 2.2 times underlying EBITDA, above the company’s 1.0–2.0 times policy range. Customer service levels improved to 96.3%, and cash conversion strengthened by 8.6 percentage points to 105.5%.
For FY27, Inghams shifted its primary metric to underlying EBIT, guiding a range of $155–$180 million, implying 1–17% growth over FY26’s $153.6 million. Core poultry volume growth is expected between 2.5% and 4.0%, while operating cost inflation excluding feed is projected at 4–5%, including $30 million in ongoing Middle East conflict impacts. Feed costs are anticipated to rise by $40–$50 million, and capital expenditure is expected to remain around $80 million, with sustaining capital accounting for approximately $50 million.
The company maintained its dividend at 10.1 cents per share, fully franked, representing a 70% payout ratio. Shares fell 7.21% to $2.06 following the presentation, leaving the stock 36% below its 52-week high of $3.22 and near its 52-week low of $1.69.
