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More than just Poultry: Inghams Group Ltd’s (ASX:ING) recipe for success in tough economic times

The demand for chicken/poultry is strong! Ron Shamgar of Tamim Asset Management reveals Inghams Group Ltd‘s (ASX: ING) recipe for success in the Australian share market. Is Inghams Group share price a buy today?

In an era where cost of living pressures are mounting, Inghams Group stands out as a beacon of strength and resilience.

Originating as a family business in 1918, Inghams has grown into the leading integrated poultry producer in Australia and New Zealand.

Despite the economic challenges posed by rising feed and fuel costs, plus consumers facing tightening budgets, Inghams proves its worth is far from chicken feed.

Inghams Group share price

The History

In 1918, Walter Ingham established Ingham’s Group Limited as a family business in Liverpool, New South Wales.

Following Walter’s passing in 1953, his sons, Bob Ingham and Jack Ingham, propelled the company to its current status as the leading integrated poultry producer in Australia and New Zealand.

Inghams Group’s expansion, initiated in the 1960s, involved strategic organic growth and acquisitions.

The diversification of Inghams’ led it to include the production of both Turkey and stockfeed while also enhancing its processing capabilities to meet evolving consumer preferences for value-added poultry products.

At present, Ingham employs over 8,000 people, sells more than 440 million kilos of chicken each year, and produces over 320 million eggs and 1.2 million tonnes of grain each year.

Inghams Group serves as a key supplier to major retailers, quick service restaurant (QSR) operators, food service distributors, and wholesalers.

Its mission is simple to provide deliciously good food in the best way by providing the best quality products and services to their customers and consumers.

The Business

Inghams Group’s vision is to be Australia and New Zealand’s first choice for poultry.

Inghams Group listed on the ASX in November of 2016 raising a touch under $600 million.

It’s currently trading at close to 52-week highs with the business valued at over $1.4 billion following an impressive run in the share price.

Ingham’s Australian poultry division is the main driver of revenue with $2.4 billion recorded in FY23.

This makes up 80% of the group’s revenue with two customers generating in excess of 10% of total revenue. Outside of poultry, feed represents a much smaller 7% of total group revenue.

Inghams has a number of high profile customers that the business has built long standing relationships with.

This includes 40 year plus partnerships with brands such as Woolworths Group Ltd (ASX: WOW), KFC Ltd (TYO: 3420) and McDonald’s Corp (NYSE: MCD).

Financial Performance

In 2023 Ingham’s grew revenue by 12.2% to $3.04 billion driven by improved net selling prices in poultry (12.2%) and external feed (26.2%).

These price increases aimed to recover ongoing escalations in feed and fuel commodities and address broader inflationary pressures. Cost of sales saw a 10.1% increase, largely influenced by higher input prices for internal feed ($122.6 million) and other costs, including fuel, freight, ingredients, cooking oil, and repairs and maintenance, all surpassing general inflation rates.

Earnings per share jumped 72% to 16.2 cents per share on the back of an improved gross margin and controlled costs.

There was a slight move in the current asset mix with an increase in biological assets as a result of cycling higher feed costs; and an increase in trade and other receivables of $46.4 million relating to the impact of higher prices flowing through trade debtors.

Ingham’s cash position is strong with $136 million in cash on hand at the end of 30 June 2023.

The business generated operating cash flows of $359 million for 2023 up 5% from the prior year.

Total cash inflows for 2023 were $4.5 million up from an outflow of $26 million in 2022 following a decrease in financing activities and in particular the timing of the payment of dividends.

Inghams increased its interim dividend and as a result the full-year dividend declared has increased from 7.0 cents per share to 14.5 cents per share, a 107% increase providing investors with a dividend yield of 3.7% and a grossed up yield of 5.3%.

1H24 Trading Update

At the end of October Ingham provided the market with updated expectations for the first half of 2024.

Inghams Group’s operational performance has experienced a strong start to the half driven by advancements in farming and processing metrics, heightened demand for poultry, positive developments in wholesale pricing, and an accelerated recovery in New Zealand.

Statutory EBITDA Post AASB16 ​​Approximately $247M
Statutory NPAT Post AASB16 ​Approximately $65M
Underlying EBITDA Pre AASB16 ​Approximately $138M
Underlying NPAT Pre AASB16 Approximately $71M

The continued improvement hinges on maintaining current wholesale pricing and operational improvements.

Seasonality and inflation factors are expected to impact the second half with the cost of labour, feed, fuel, electricity and CO2 expected to provide a lower contribution.

The TAMIM Takeaway

The growing demand for chicken is strong.

The Australian consumer is expected to spend a greater amount on chicken driven by trends in convenience and product innovation which are responding to consumer needs.

Retailers are adding more space for poultry and items are becoming more prominent on permanent menus.

Post the strong trading update at the end of October ING is no longer a holding in the TAMIM portfolios.

Based on trailing FY23 numbers, Ingham’s is currently valued at 24 times earnings. We see Ingham’s as an attractive proposition positioned well for increased consumer demand.

We continue to look for a re-entry into the stock given its decent dividend yield and the fact that it is a well-placed business in a defensive consumer industry.

Get Instant Access to TAMIM’s top three takeover targets

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​The Takeover White Paper will share our strategies and insights in recognising potential takeovers and provide you with a list of companies currently on our watchlist.

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General Advice Disclaimer


Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.


At the time of publishing, the author or their clients may have a financial interest in some of companies or securities mentioned.

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