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On 28th February 2019, Inghams Group Limited (ASX:ING) which is In the business of poultry, has announced its 1HFY19 results. The reported revenue for 1HFY19 stood at $1,257 million which was a modest rise of 4.2% from the previously reported number of $1,206.1 million in 1HFY18. The growth was attributed by an increase in core poultry volumes which grew from 201.4 kt in 1HFY18 to 207.5 kt in 1HFY19, an increase of 3%.
EBITDA for 1HFY19 was reported at $152 million which was an impressive rise of 30.8% from the previously reported number of $116.2 million in 1HFY18. It also includes $53.9 million profit related to the sale and $13.7 million of restructuring related costs for Further Processing network optimisation and other costs. The underlying EBITDA rose marginally from $105.8 million in 1HFY18 to $109.6 million in 1HFY19, an increase of 3.6% whereas the EBITDA margin remained intact at 8.8% in the same period.
Region wise, Australia contributed majorly, with the revenue and EBITDA which stood at $1,064.3 million and $137.8 million, respectively. Solid growth in wholesale volume reflects improved coverage in this channel.
New Zealand business posted the revenue of $32.1 million and EBITDA of $14.2 million.
The net profit after tax (NPAT) was reported to be 28.5% higher at $84.4 million in 1HFY19 from $65.7 million in 1HFY18. This has also ramped up the earnings per share (EPS) figures. The EPS stood at 17.7 cents per share in 1HFY18 which increased by 27.7% to 22.6 cents per share in 1HFY19. However, a moderate decline of 5.3% is seen in the underlying NPAT which declined from $58.4 million in 1HFY18 to $55.4 million in 1HFY19, which is primarily due to change in tax legislation on hybrid mismatch structures which relates to the New Zealand royalty charge.
After an increase in the NPAT, the company also declared an interim fully franked dividend of 9 cents per share which is in line with the companyâs dividend policy of distributing dividend of around 70% of the NPAT for FY19 and is unchanged. The interim dividend for 1HFY19 will be payable on 9th April 2019 with ex-date and record date being 13th March 2019 and 14th March 2019 respectively. For FY20 the dividend policy is under review.
The company also provided an outlook and guidance for future operations. Is has stated that the demand for its poultry products is continuously growing at historically high levels. But also expects the feed cost to remain high through to the start of the next domestic grain harvest in December. The management will try to offset this impact wherever possible or may pass on to the market if necessary.
After the result announcement, the stock price fell sharply by more than 9% but gained from the lower levels and closed the trading session at A$4.050, down by 8% as on 28th February 2019, compared to the previous closing of A$4.4. The YTD return of the stock is noted at 10.83% as on 27 February 2019.
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