27 Jun 2017

Tegel triples profit, but misses forecasted figures

12:49 pm on 27 June 2017

Tegel has tripled its full-year profit, but cheap chicken prices squeezed its profit margins.

The poultry company said it was disappointing it did not hit all the numbers it forecast in its investment prospectus ahead of its listing on the NZX last year.

Tegel made an after-tax profit for the 53 weeks that ended 30 April of $34.2 million.

That was $22.9m higher than the previous year, but below the $44m it forecast in its prospectus.

Record poultry volumes resulted in a 5 percent increase in revenue to $614m, while domestic and export sales rose 7.2 and 6.7 percent, respectively.

But cheaper chicken prices eroded profits margins, with gross profit falling 1.6 percent to $145m.

Tegel chief executive Phil Hand said it had been a "challenging" first year as a listed company and it was disappointing not to achieve its original numbers forecast in its prospectus.

"Despite this, we have achieved a lot this year. We raised and processed more birds that ever before ... we exceeded $600m in revenue and increased our leading domestic market position by 2 percent."

The company launched 29 new products and had saved $12m through cost-saving initiatives, Mr Hand said.

A final dividend of $4.10 cents per share will be paid, bringing the total dividend for the 2017 financial year to $7.55.

Based on growing local consumption and exports, Tegel said it expected its underlying earnings next year to increase on this year's earnings.

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