Strong volumes characterised the maiden first half for chicken producer, Ingham’s ((ING)). Brokers suspect, given the split in the first half:second half in the prospectus that the company is on track to exceed FY17 forecasts.
Inghams Group's profit was largely in line with consensus and guidance was reiterated. Strong momentum in New Zealand offset weakness in Australia. The broker remains concerned over poor cash flow conversion.
As reported yesterday, the FY19 report missed consensus forecasts, and it was accompanied by guidance for a decline in profits for FY20. Following on from the share price shellacking that ensued post the release, Citi has upgraded to Neutral from Sell.
Inghams has provided an update as part of a conference, with a key message of a fall in the wheat price and a recovery in New Zealand. Citi suspects there still could be downside to FY20 estimates for earnings, given the run rate over the second half. Moreover, retail prices for poultry continue to fluctuate.