Company Reports

Inghams reported 2026 underlying EBITDA of AUD 186 million, 21% lower than last year, as higher operating costs offset growing poultry volumes and higher selling prices. The company is guiding to underlying EBITDA of between AUD 190 million to AUD 220 million.

We forecast Inghams' top-line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share and the industry's high concentration, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales coming from five customers, including supermarket giants Woolworths and Coles and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

We forecast Inghams' top-line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share and the industry's duopoly-like structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales coming from five customers, including supermarket giants Woolworths and Coles and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Inghams reported modestly improving core poultry volumes and pricing, up 1%, over fiscal 2026's first nine months. It reiterated underlying EBITDA guidance of AUD 180 million-AUD 200 million, despite flagging a AUD 7 million-AUD 10 million fuel impact from the Middle East conflict. Shares rose 7%.

Inghams reported interim 2026 underlying EBITDA of AUD 81 million, 35% lower than last year, mainly driven by higher operational costs. Management lowered fiscal 2026 underlying EBITDA guidance by about 15% to AUD 180 million-AUD 200 million. The shares fell 14% on the day.

We forecast Inghams' top-line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share and the industry's duopoly-like structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales coming from five customers, including supermarket giants Woolworths and Coles and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Inghams provided a trading update for the first 18 weeks of fiscal 2026. Core poultry volumes are down about 1% compared with last year, while net selling prices are up about 1%. The company provided first-half underlying EBITDA guidance of AUD 80 million. Full-year guidance is unchanged.

We forecast Inghams' top-line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share and the industry's duopoly-like structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales comprising five customers, including supermarket giants Woolworths and Coles, and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Inghams' fiscal 2025 adjusted EBITDA fell 2% to AUD 236 million on the prior year. Poultry volumes declined 1%, offset by a slight increase in prices and feed cost savings of AUD 57 million over the year. Shares fell about 20% on the day.

US President Donald Trump's "liberation day" tariffs have rattled global markets. Tariff rates have been raised to levels not seen in a century, which will likely set in motion a cascade of supply-demand side shocks, all acting to weigh on the rate of economic growth.

Inghams reported interim 2025 underlying EBITDA of AUD 124 million, down 10% on its record half-year result a year ago. On a 2% decline in revenue, and little change to the cost base, Inghams' high operating leverage led to a 70-basis-point decline in margins.

We forecast Inghams' top line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share, and the industry's duopolylike structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales comprising five customers, including supermarket giants Woolworths and Coles, and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Inghams' current CEO, Andrew Reeves, is set to retire in mid-2025. A replacement has already been found internally in Edward Alexander. Alexander has been with the company since 2015, currently heading up Inghams' New Zealand business.

We forecast Inghams' top line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share, and the industry's duopolylike structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with around 60% of sales comprising five customers, including supermarket giants Woolworths and Coles, and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Inghams’ fiscal 2024 result was a considerable improvement on fiscal 2023, with underlying net profit lifting 43% to AUD 102 million—about 6% below our forecast. Net selling prices lifted across all channels, about 5% on average, much of it a consequence of higher costs flowing through. Feed prices remain elevated, albeit moderating from recent record highs. Labor, utilities, ingredients, and maintenance costs have all increased ahead of general inflation. Commensurate price increases—which are notoriously slow to respond—are beginning to flow through.

Avian influenza, or bird flu, has been detected in Australia at a two egg farms, one in western Sydney in New South Wales and one in the Meredith area of Victoria. None of Inghams’ farms has been affected directly, and Inghams has no commercial broiler farms located in either affected region. Consequently, save for increased biosecurity measures in New South Wales and Victoria—including restricting access to livestock and processing operations, Inghams is operating as usual, and its supply chain is unaffected. We maintain our AUD 3.70 fair value estimate. At current prices, shares in Inghams are roughly fairly valued.

No-moat Inghams is enjoying a positive start to fiscal 2024. Conditions are favorable, with core poultry volumes and net selling prices up. Revenue growth is also outpacing input cost inflation, notably feed costs, which appear to have stabilized. First-half underlying EBITDA rose 20% on the previous corresponding period.

We forecast Inghams' top line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share, and the industry's duopolylike structure, competition in poultry is intense. Poultry is largely commoditized, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with the majority of its total sales comprising five customers, including supermarket giants Woolworths and Coles, and quick-service restaurant KFC. In our view, the balance of power lies firmly with these key customers.

Conditions are good for Inghams. At a trading update, the firm noted poultry prices are elevated, demand is strong, and operating performance across farming and processing continues to improve. Pricing momentum enjoyed in fiscal 2023 has continued into fiscal 2024. Average pricing increased quarter on quarter throughout fiscal 2023, with fourth-quarter 2023 average selling prices about 17% above the corresponding quarter in fiscal 2022. Management guided to first-half fiscal 2024 EBITDA of around AUD 247 million—18% higher than the prior corresponding period. While noting a likely weaker second half, due to normal seasonality and inflationary headwinds (particularly in labor), we lift our fiscal 2024 EBTIDA forecast by 19% to AUD 446 million.

We forecast Inghams' top line growth to be driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. Despite Inghams' dominant market share, and the industry's duopolylike structure, competition in poultry is intense. Poultry is largely commoditised, and Inghams possesses limited opportunity to differentiate its products, leading to our view that the firm lacks a long-lasting competitive advantage required to award an economic moat. Further, Inghams' customer base is highly concentrated, with the majority of its total sales comprising five customers, including supermarket giants Woolworths and Coles, and quick-service restaurant KFC. In our view, the balance of power lies with these key customers.