Inghams’ shares have fallen by as much as 20 per cent after the poultry giant’s attempt to streamline processing facilities failed to keep up with an unexpected spike in demand.
Inghams increased its net profit by 10.1 per cent to $126 million as revenue rose 4.9 per cent to $2.5 billion, while $49.7 million in other income included the sale of the Mitavite horse feed business in August last year.
But expenses rose roughly 5.0 per cent to $2.34 billion as efforts to optimise the company’s processing network faltered in the face of higher customer demand.
Inghams said poultry demand would continue to grow on account of the protein’s relative affordability but feed costs remained close to historic highs due to ongoing drought, while processing costs would also continue to mount.
Shares in Inghams fell as much as 20.3 per cent to $3.225 in the first 20 minutes of trade on Tuesday and were still 18.32 per cent lower at $3.30 by 1040 AEST.
Managing director Jim Leighton, who joined the company in November, said Inghams’ refreshed leadership team would unveil a new strategic and operational plan to the market in October.
Tim Singleton started as Inghams’ chief operations officer in May, Chris Croese became chief customer officer in June and Gary Mallett is due to begin as chief financial officer in October.
“Poultry is a dynamic business that requires deep expertise and experience to unlock potential,” Mr Leighton said.
“Our newly assembled leadership team brings world-class experience and expertise from companies such as Tyson, Pilgrim’s and Perdue … this new team knows what great looks like and how to achieve it!”
Inghams cut its final dividend to a fully franked 10.5 cents per share, down from 11.6 cents a year ago.
The full-year dividend of 19.5 cents per share is, down from 21.1 cents in FY18 but Inghams also made a $125 million capital return to shareholders in December, the equivalent of 33 cents per share.