UPDATE: Inghams Ltd (ASX: ING) shares have plummeted to a 12-month low this week, triggering urgent discussions about potential takeover interest. Chair Helen Nash described the company’s performance as “deeply disappointing” during her speech at the annual general meeting on October 26, 2023.
Inghams, a leading food producer in Australia, reported significant operational cost increases, particularly in farming and processing, which emerged late in the financial year FY25. This has led to a staggering 33% drop in share price as the company navigates “challenging market conditions,” according to Nash.
The company’s latest trading update revealed that while market fundamentals remain strong, they face heightened operational costs and inventory management challenges. Nash assured shareholders that the board is implementing urgent measures aimed at improving performance for the second half of FY26 and beyond.
“I acknowledge that these issues, and the performance of our share price, are deeply disappointing for all shareholders,” said Nash. “Your Board and management are responding with urgency and discipline.”
Amid this turmoil, speculation about a potential takeover is intensifying. The Australian Shareholders Association noted that Inghams’ weakened share price might attract suitors looking for acquisition opportunities. Concerns remain for FY26, with predictions suggesting that EBITDA could fall by up to 10%. However, there is hope for recovery as the company aims to reduce excess inventory and recalibrate production.
Investment firm Jarden has analyzed Inghams’ recent performance and sees potential for profit at current share prices. Although their outlook remains neutral, they maintain a positive bias due to new management initiatives aimed at cost reduction and operational improvements. Jarden has set a price target of $2.80 per share, projecting a total shareholder return of 19.3% based on the closing price of $2.43 on October 25, 2023.
As of today, Inghams shares are showing signs of recovery, rising 3.1% to $2.50, but investors are urged to remain cautious amid ongoing market instability.
What happens next for Inghams will be crucial. With management promising strategic changes, stakeholders will be watching closely for signs of improvement. The potential for a takeover could also reshape the company’s future, making it a key focus for both investors and industry analysts alike.
For those considering investment, this situation presents both risks and opportunities. The urgency of the current circumstances underscores the need for immediate action as the market evolves. Stay tuned for further updates on this developing story.
