That first 7 weeks number sounded bad, but their outlook recovering quickly from that sounds good to me. I would have expected more of that in the HY result. However this is a great stock to buy for omicron exit - so back in on the dip. I have copied what I thought has spooked the market below, but perceive it as a one off and not indicative of expected company performance. See what happens!
"While the widely reported emergence of the Omicron variant in late December had minimal impact on
the Company’s 1H FY22 results, operating conditions have been significantly affected by Omicron since
the start of the new calendar year. Omicron has impacted the Company more severely than previous
COVID-19 variants, with extensive staff shortages experienced at all major locations. This has severely
limited our ability to process both the volumes and formats required to meet customer demand,
increased our unit costs and has required adjustments to volume and product mix, resulting in the
temporary suspension of some products and a loss of sales. Excess supply across the market is being
directed to Wholesale, resulting in significant oversupply in this channel with pricing impacted
accordingly. As a result of this disruption, Underlying (unaudited) EBITDA and NPAT for the first 7
weeks of 2H FY22 are approximately $35 million and $24 million respectively lower than PCP.
The Inghams business is capable of recovering and adapting relatively quickly. In recent weeks, there
has been some improvement in workforce availability, and thus profitability, and the Company is
working to promote confidence for its people when returning to work, supporting health and well-
being to drive increased attendance levels.
Some pandemic-related adjustments to operational practices will be retained for an extended period
to ensure a safe work environment. There will be some adjustment to agricultural operations to bring
farms back into balance, the timing of which will depend on operating and demand conditions, while
inventory levels are expected to be returned to desired levels and mix systematically over the coming
months."
ING Price at posting:
$3.36 Sentiment: Buy Disclosure: Held
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