Chairman’s report
On behalf of the Board of Directors and management, I am pleased to present the Inghams Group Limited Annual Report for the financial year ended 27 June 2020.
I would like to commend the Ingham’s team for delivering resilient results during this difficult time. While our results fell slightly short of our targets, our five‑year strategy positions us well for long‑term growth, underpinned by our robust organisation and bench strength.
During the first half, the team turned around underperformance in our further processing operations to regain positive operating momentum. Regrettably, we have not been immune to the impact of COVID‑19 as Government restrictions to keep our communities safe impacted our customers’ trading activities, which led to changes in consumer purchasing behaviours and volatile sales. New Zealand was especially hit hard with a five‑week lockdown that closed all quick service restaurants, cafes and other out‑of‑home channels.
The company’s financial results for the year have been impacted by challenges including adverse weather, bushfires and the global pandemic. During the tragic Australian bushfires, our logistics team found alternative solutions when usual delivery routes were blocked. To meet COVID‑19 requirements, we embraced our responsibility as an essential food supplier and moved quickly to keep our people safe and our operations compliant. Our collaboration with governments, unions and other stakeholders was critical to ensuring continuity of supply to our customers and consumers.
In the face of all of this, I believe it was the tenacity of our people that enabled the company to achieve these solid financial results. We delivered a Statutory Net Profit After Tax of $40.1 million, and $78.8 million on an Underlying* basis, which excludes the $23.7 million impact of the adoption of AASB 16 and other non-recurring items. This, combined with strong cash generation, has enabled us to provide shareholders with a fully franked dividend of 14 cents per share, reflecting a payout ratio of 66 per cent of Underlying Net Profit After Tax pre AASB 16 consistent with our dividend policy.
I would like to commend the Ingham’s team for delivering resilient results during this difficult time
Ongoing financial discipline has been overseen by our new Chief Financial Officer, Gary Mallett, who joined the team in October. Gary brings with him more than 30 years of experience in a range of senior financial roles with companies including Brambles, Origin Energy and Senex Energy.
Michael Ihlein was appointed to the Board in April. Mike complements our Board skills with fast moving consumer goods and supply chain logistics experience, including at Brambles and Coca‑Cola Amatil. He is Chairman of our Finance and Audit Committee.
Ricky Lau retired from our Board on 30 June 2020. He joined the Board in 2013 and continued through the IPO as a representative of TPG. I would like to thank Ricky for his contribution.
Our Business Sustainability report and Corporate Governance Statement details our commitment to animal welfare and operating sustainably in the best interests of the company and the communities in which we work.
While the impact of COVID‑19 continues for the foreseeable future, I am confident we have the right leadership, team and business model to continue to steer our business with continued agility and a bias for action to keep us always headed in the right direction to deliver against our strategic plan.
Managing Director and Chief Executive Officer, Jim Leighton, has led our business strategy since joining us 18 months ago. Our five‑year strategic plan is well underway, and the team is focused and energised to sustainably grow our business to deliver more consistent, predictable and reliable returns for our stakeholders.
Thank you to my Board colleagues, the leadership team and our people across Australia and New Zealand for continuing to work safely and with determination to support our company to provide Ingham’s customers with our trusted products.
On behalf of the Board and management team, I would also like to thank our shareholders for your ongoing support.
* Underlying excludes any profit or loss on sale of assets, restructuring expenses, impairments, trading results for business sold as a going concern and AASB 16 leasing impacts. Further, underlying NPAT excludes tax on the abovementioned exclusions.
