Chicken wars a boon to Inghams

THE raging supermarket war over roast chickens has proved a winner for listed poultry producer Inghams Group, which has posted a better-than-expected annual profit of $59 million.

Inghams forecast a net profit of $52.7 million for the year to June when it listed on the share market in November. It said yesterday that better than expected growth in poultry volumes in the second half had contributed to annual volume growth of 8.8 per cent.

That was partly driven by price cuts on roast chickens by Woolworths and Coles, plus greater demand from fast food chains.

Chief executive Mick McMahon said volume growth would continue, but at levels closer to historical averages of about 3.5-4 per cent.

“I’m just making sure that no one thinks that 8.8 per cent is normal,” he said.

Mr McMahon also joined the parade of executives to highlight the impact of rising power costs, though he said Inghams was covered until partway through this financial year, so price hikes wouldn’t bite until the second half.

The company’s annual electricity bill is about $30 million and is expected to rise by about $20 million over the next two financial years, he said.

“That’s the challenge facing industries like ourselves; I’m not entirely sure that everyone’s aware of the extent of the market failure here,” Mr McMahon said.

Inghams shares closed 4 per cent lower at $3.36.