How Did Inghams Offset Australian Challenges with Strong NZ Growth in FY25?

FY25 Performance Overview

Inghams Group Limited has delivered a resilient financial performance for the fiscal year ending June 2025, reporting an underlying EBITDA pre AASB 16 of $236.4 million, effectively flat compared to the prior corresponding period despite a 1.4% decline in core poultry volume. This stability was achieved through a combination of disciplined cost management, significant feed cost savings, and a strong performance in its New Zealand operations.

The Australian market presented headwinds, notably due to changes in the Woolworths supply agreement and softer demand in the fourth quarter, which saw a shift to a lower-margin customer mix and significant wholesale pricing pressure. Conversely, the New Zealand segment experienced robust growth, with EBITDA increasing by 14.3%, buoyed by the successful integration of the Bostock Brothers Limited acquisition and favourable market dynamics.

Segment Dynamics and Market Conditions

Australia’s core poultry volume declined by 2.5%, reflecting weaker retail and wholesale volumes, while New Zealand’s volume grew by 5.2%, largely driven by retail channel expansion and the Bostock Brothers acquisition contributing 3 percentage points to growth. The group’s net selling price per kilogram increased modestly by 0.5% overall, with New Zealand showing stronger price growth of 2.9% in local currency terms.

Feed costs, a significant input for Inghams, declined by $57.2 million, aided by lower global wheat and soymeal prices, which helped offset inflationary pressures elsewhere in the supply chain. Tight cost control measures limited total cost growth (excluding feed and lease impacts) to just 0.3%, underscoring management’s focus on operational efficiency.

Capital Management and Balance Sheet

Inghams increased its net debt by $82.5 million during FY25, reflecting capital expenditure of $104.1 million and the settlement of the Bostock Brothers acquisition for $31.3 million. Despite this, leverage remains within the company’s target range at 1.8 times underlying EBITDA pre AASB 16. The company also refinanced its syndicated finance agreement, extending maturities and increasing facility size to support ongoing strategic investments.

Strategic Investments and Sustainability Initiatives

Looking ahead, Inghams is investing heavily in automation and operational upgrades, with projects such as the Osborne Park “One Touch” automated cut-up line and the Murarrie productivity enhancement expected to drive efficiency gains and reduce labour costs. These initiatives align with the company’s strategy to strengthen its market position and improve resilience.

On the sustainability front, Inghams continues to lead in safety, animal welfare, and environmental stewardship. Notably, its New Zealand operations have transitioned to 100% renewable electricity, and the Marion Bay brand in Tasmania has achieved carbon-neutral certification. The company also exceeded its packaging recycled content targets and reduced waste intensity significantly.

FY26 Outlook and Guidance

For FY26, Inghams projects underlying EBITDA pre AASB 16 between $215 million and $230 million, anticipating a challenging first half due to inventory adjustments and production realignment. However, the company expects stronger second-half performance supported by $60–80 million in annualised cost reductions designed to offset inflationary pressures.

Volume growth is expected to be modest, with gains in quick service restaurant and non-Woolworths retail channels balanced by a targeted reduction in wholesale volumes. New Zealand is forecast to maintain strong momentum, underpinned by brand strength and market conditions. Capital expenditure will remain elevated, focusing on efficiency, automation, and growth initiatives.