15 Dec 2016

Tegel's profit doubles, but share price still falls sharply

4:35 pm on 15 December 2016

Poultry producer Tegel has seen its half-year net profit more than double, but its share price has fallen sharply as the full-year forecast misses expectations.

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Photo: 123 RF

The chicken company's net profit was $15.1 million in the six months ended in October, an increase of $9.1m over the year earlier.

Revenue rose 4 percent to $296.3m, driven up by a 7 percent increase in the volume of poultry sold in the period.

But chief executive Phil Hand said a 4 percent fall in underlying profit to $35.2m reflected a fall in profit margins, which had been impacted by lower domestic pricing for poultry.

"This has been due to excess volume in the local market. We are however expecting some recovery of prices in the second half," he said.

While revenue and sales growth were expected to continue, the full-year net profit was expected to be between $33m and $41m, compared with a prospectus forecast of $43.4m.

The share price was down 16 percent this afternoon - falling 25 cents to $1.30