TasFoods Q4 Revenue Falls 9.6% to $9.8 Million Amid Oversupply
TasFoods reported a 9.6% revenue decline in Q4 2025 amid oversupply and discounted mainland poultry impacting Tasmanian markets, while completing the sale of Pyengana Dairy.
- 9.6% revenue decline to $9.8 million in Q4 2025
- Poultry sales down 9% due to mainland oversupply and discounting
- Gross margins fell 3.6%, offset by cost reductions and direct management of poultry sheds
- Sale of Pyengana Dairy completed in December 2025
- Cash flow impacted with $0.7 million net operating outflow and $1.5 million investing inflow
Challenging Market Conditions
TasFoods Limited (ASX, TFL) has revealed a tough quarter ending December 2025, with total consolidated revenue falling 9.6% to $9.8 million. The decline was largely driven by a 9% drop in poultry sales, reflecting an oversupplied Tasmanian market flooded with discounted poultry from mainland Australia. This influx has intensified competition, particularly in wholesale and food service channels, squeezing margins and sales volumes.
Despite these headwinds, TasFoods has taken strategic steps to mitigate losses. Gross margins in its Nichols Poultry division declined by 3.6%, but this was partly offset by reductions in input costs such as feed and contract grower fees. A notable operational shift saw Nichols Poultry take direct control of 70% of its chicken growing sheds, moving away from contract arrangements to strengthen its supply chain and cost base.
Cost Management and Asset Sales
Cost discipline has been a clear focus, with indirect costs across the company down 10.6% compared to the prior year period. Corporate office expenses were also trimmed by 3%, reflecting a lean approach prioritising essential services only. These measures have helped cushion the financial impact of the challenging poultry market.
In a significant portfolio move, TasFoods completed the sale of its Pyengana Dairy business in late December 2025 following an Extraordinary General Meeting. This divestment contributed to a $1.5 million net investing cash inflow for the quarter, providing some liquidity relief amid operational pressures.
Cash Flow and Financial Stability
The company ended the quarter with a modest cash overdraft of $0.3 million but retains access to a $1.5 million working capital facility through NAB. Net operating cash outflows were $0.7 million, a deterioration from a slight inflow in the previous year’s quarter. TasFoods continues to emphasise strict working capital management to maintain financial stability in a competitive environment.
Outlook and Strategic Focus
Looking ahead, TasFoods notes some late-quarter signs of improvement in poultry pricing and demand, particularly through the festive season. However, it expects competitive pressures to persist throughout 2026 as consumers remain cautious amid ongoing economic uncertainty. The company is actively reviewing its poultry operations and asset portfolio under its Capital Management Framework, exploring opportunities to enhance shareholder returns, including potential realisation of Nichols Poultry’s brand equity.
CEO Joshua Fletcher highlighted the company’s commitment to navigating these challenges with a focus on operational efficiency and strategic asset management, signalling a cautious but proactive approach to the year ahead.
Bottom Line?
TasFoods’ next moves on poultry operations and asset strategy will be critical as it navigates a fiercely competitive market in 2026.
Questions in the middle?
- Will TasFoods pursue further asset sales or restructuring in its poultry division?
- How quickly can Nichols Poultry’s direct management strategy improve margins and volumes?
- What impact will ongoing economic uncertainty have on Tasmanian consumer demand for poultry?
