Company Interview / Cost pressures clip Ingham’s wings

Key points:

Net profit at Ingham's (ASX:ING) drops two-thirds to $18.1 million with revenue at $1.6 billionCost pressures stem from inventory challenges and supply chain issues following changes in major contractsFY2026 earnings guidance lowered to $180-$200 millionDiversification of the customer base and improved inventory management seen as key to future stability

Ed Alexander from Ingham's reports a challenging first half for the poultry producer, with net profit falling by two-thirds to $18.1 million due to higher operational costs. Alexander points to excess inventory and supply chain inefficiencies, particularly arising from a recent transition in customer contracts. Revenue edged lower to $1.6 billion as poultry volumes declined. Shareholders will receive an interim dividend of $0.04 per share, fully franked, down from $0.07 previously. The company has lowered its 2026 earnings guidance to $180-$200 million, reflecting continued cost pressures and transitional impacts from inventory and supply chain shifts.

Despite the difficult results, Alexander highlights a return to volume growth in the second quarter and improvements in customer satisfaction and wholesale channel performance. Inventory management has improved, reducing holdings by $24 million and permitting a resumption of normal production settings. Continued focus on cost-cutting initiatives—including operational, procurement, and general administrative savings—is expected to deliver structural cost reductions between $60-$80 million for the full year, with $40 million already achieved.

Alexander maintains that a more diversified customer portfolio, including growth in non-Woolworths retail and QSR channels, should reduce risk and improve long-term earnings resilience. He regards poultry’s core position as a staple food as a buffer against ongoing cost of living pressures and higher interest rates.