Australian (ASX) Stock Market Forum

ING - Inghams Group

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Value Collector said:
I am not sure, I haven't seen the leases, but unless their is some sort of option to renew or option to purchase built into it I guess the new lease on certain strategic properties could have a bit of competitive bidding for it, Hell if I was the competition I might bid for the new lease just to increase my competitions rent ;)
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Ingham’s owns the majority of its operating plant and equipment, while its land and buildings are managed either through leasehold or freehold arrangements. Ingham’s operates 79 leasehold properties, the majority of which are secured with 20 year terms with options to extend (five further terms, with each term for 10 years).
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Took less time to search lease in the prospectus than to write this post.
 
This is a bit of an extract of something I posted a couple of months ago...... I am still peeved about those chicken tenders!

Extract:

Tonight when I went to cook my Inghams chicken tender I discovered that they had changed into that mushy chicken nugget centre instead of crumbed chicken breast fillet as they were a few weeks ago. This got me thinking, wasn’t Inghams to be floated? Upon further investigation I discovered that Inghams which had been a family run business for almost 100 years and was sold to TPG in 2013 for 880M. After selling most of their hard assets for 650M and loading the balance sheet with debt (620M - depending on which report) TPG should come away with a tidy profit. It is slated to list in September/October this year for 1.3B plus according to The Australian.

These are my calculations for TPG’s profit assuming a 1.5B listing price and assuming TPG is able to sell down their remaining shares near the list price:
Profit = list price + asset sales – (equity to purchase)
Profit = 1500M + 650M – (880M-620M)
Profit = 1890M
Not bad for an initial investment of 260M, which gives a return of over 7000% in 3 years for their efforts.

Assuming a listing price of 1500M, 620M in debt and EBITDA of 225M* (The Australian) the EV/EBITDA of Inghams post float will be 10. My question is simple – Why would you buy the Inghams float? After my experience tonight I feel that 225M will be over earning as they have lowered quality and customers will catch on and stop purchasing their product.

* I notice now they are saying and EBITDA of 190M or so.

This looks so much like spotless to me. Maybe better than Dick Smith though?
 
andy777 said:
This is a bit of an extract of something I posted a couple of months ago...... I am still peeved about those chicken tenders!

Extract:

Tonight when I went to cook my Inghams chicken tender I discovered that they had changed into that mushy chicken nugget centre instead of crumbed chicken breast fillet as they were a few weeks ago. This got me thinking, wasn’t Inghams to be floated? Upon further investigation I discovered that Inghams which had been a family run business for almost 100 years and was sold to TPG in 2013 for 880M. After selling most of their hard assets for 650M and loading the balance sheet with debt (620M - depending on which report) TPG should come away with a tidy profit. It is slated to list in September/October this year for 1.3B plus according to The Australian.

These are my calculations for TPG’s profit assuming a 1.5B listing price and assuming TPG is able to sell down their remaining shares near the list price:
Profit = list price + asset sales – (equity to purchase)
Profit = 1500M + 650M – (880M-620M)
Profit = 1890M
Not bad for an initial investment of 260M, which gives a return of over 7000% in 3 years for their efforts.

Assuming a listing price of 1500M, 620M in debt and EBITDA of 225M* (The Australian) the EV/EBITDA of Inghams post float will be 10. My question is simple – Why would you buy the Inghams float? After my experience tonight I feel that 225M will be over earning as they have lowered quality and customers will catch on and stop purchasing their product.

* I notice now they are saying and EBITDA of 190M or so.

This looks so much like spotless to me. Maybe better than Dick Smith though?
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So glad to see that there are people who think like you Andy.
 
andy777 said:
This is a bit of an extract of something I posted a couple of months ago...... I am still peeved about those chicken tenders!

Extract:

Tonight when I went to cook my Inghams chicken tender I discovered that they had changed into that mushy chicken nugget centre instead of crumbed chicken breast fillet as they were a few weeks ago. This got me thinking, wasn’t Inghams to be floated? Upon further investigation I discovered that Inghams which had been a family run business for almost 100 years and was sold to TPG in 2013 for 880M. After selling most of their hard assets for 650M and loading the balance sheet with debt (620M - depending on which report) TPG should come away with a tidy profit. It is slated to list in September/October this year for 1.3B plus according to The Australian.

These are my calculations for TPG’s profit assuming a 1.5B listing price and assuming TPG is able to sell down their remaining shares near the list price:
Profit = list price + asset sales – (equity to purchase)
Profit = 1500M + 650M – (880M-620M)
Profit = 1890M
Not bad for an initial investment of 260M, which gives a return of over 7000% in 3 years for their efforts.

Assuming a listing price of 1500M, 620M in debt and EBITDA of 225M* (The Australian) the EV/EBITDA of Inghams post float will be 10. My question is simple – Why would you buy the Inghams float? After my experience tonight I feel that 225M will be over earning as they have lowered quality and customers will catch on and stop purchasing their product.

* I notice now they are saying and EBITDA of 190M or so.

This looks so much like spotless to me. Maybe better than Dick Smith though?
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andy777 said:
Forgot to add 550M paid out in dividends as well to private equity group owners
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Hi Andy

One thing that struck me was your inclusion of the 650M from selling the properties in your calculation. I would have thought the business sells the properties and maybe makes a capital return to the equity holders would be the process - not TPG pocket the funds directly. So I opened the prospectus for a second time - (which by the way is once too much)

These are the only transactions with owners I can see.

Paid $308.4 million for it would seem approx. 328 Million shares currently outstanding - the remainder of the rumoured 880M purchase price must have been debt funded and looking at the quantum of debt on the books that sounds about right.

Received back a capital return of $200.5M and dividends of $314.6.

IPO target range is $3.57 to $4.14. They are not selling all their shares at IPO but assuming they could, at each price level the current owners shares are worth between 1171M and 1358M

Certainly a nice payday for TPG if the IPO is a success (not 7000% maybe 550-600%) but does their profit matter? Your other points about quality and stacking EBITDA seem much more relevant.

disclaimer:

I have no interest in applying for shares at IPO.
 
Craton said:
Ah, private equity, such a dirty term. Reminds of the lyrics, "...money for nuthing an' your cheques for free."
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I always thought the lyrics were ".... and your chicks for free"

Never contemplated they meant theses type though.

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craft said:
Hi Andy

One thing that struck me was your inclusion of the 650M from selling the properties in your calculation. I would have thought the business sells the properties and maybe makes a capital return to the equity holders would be the process - not TPG pocket the funds directly. So I opened the prospectus for a second time - (which by the way is once too much)

These are the only transactions with owners I can see.

Paid $308.4 million for it would seem approx. 328 Million shares currently outstanding - the remainder of the rumoured 880M purchase price must have been debt funded and looking at the quantum of debt on the books that sounds about right.

Received back a capital return of $200.5M and dividends of $314.6.

IPO target range is $3.57 to $4.14. They are not selling all their shares at IPO but assuming they could, at each price level the current owners shares are worth between 1171M and 1358M

Certainly a nice payday for TPG if the IPO is a success (not 7000% maybe 550-600%) but does their profit matter? Your other points about quality and stacking EBITDA seem much more relevant.

disclaimer:

I have no interest in applying for shares at IPO.
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Whoops thanks craft, that was dumb of me to put an extra 0, I meant a 700% (i.e. 7 times initial outlay) profit. All of these figures I got from good old fairfax as no prospectus was issued at that time. Property figures and listing figures both obtained from fairfax articles a few months back - i.e. fairfax was suggesting a possible 1.5B listing and it seems this has been brought back. Still, looks dangerous to me as well! But what an interesting case study.
 
If the potential rewards are not high enough for the initial risk as most posters have agreed on, how do the insto's justify their purchase? Who buys overpriced, asset poor, debt laden companies? Is it the same ones who bought DSE?

PE deserves to be stuck with it, so why aren't they?
 
peter2 said:
If the potential rewards are not high enough for the initial risk as most posters have agreed on, how do the insto's justify their purchase? Who buys overpriced, asset poor, debt laden companies? Is it the same ones who bought DSE?

PE deserves to be stuck with it, so why aren't they?
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Hi Peter,

It is a good question. My understanding is that an index tracking fund will often be required to buy constituents of that index on a proportional basis. Perhaps this could explain it?
 
in short I will continue to buy Ingham Chicken though preference towards Mt Barker organic one (NOT Woolworth imitation with Macro label).
I read a very interesting posting about Bob in this thread as well as in newspaper.
I can buy chicken for another 6 months than putting minimum application money on ING. Strongly No from me. DYOR.
PS: However after listing the share on ASX I will look for an opportunity until it goes north by at least 30% from the listed price.
 
I am confused, miner, are you buying some shares, some chook, or both??!!

(I buy a bit of chook, but not these shares!)
 
galumay said:
I am confused, miner, are you buying some shares, some chook, or both??!!

(I buy a bit of chook, but not these shares!)
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galumay
You made me laugh.
I thought my message was clear that I will buy CHOOKS first. That too from Mt Barker Organic chooks.
I will not buy ING even Australian SUper committed $150 M (they are playing with others money and I do have some fund there :banghead:).
I will buy ING when the price drops down by 30% or so after IPO .
If you are reading outside pub :D my intention is clear as water.
 
Ingham Group's Chief Executive Officer Mick McMahon is leaving the company, stepping down from the role after the company's annual results in August 2018. The company stated that a domestic and international executive search process has commenced and it is expected there will be internal candidates for the role.

The market must have been hoping that Mick would stay as the ING share price plunged after the announcement and is currently trading at $3.755, down 8.19% from yesterday's close.

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Neglected and It is looking stable. Australia is the third-highest consumer of chicken in the world per capita.
 
Researching Ingam’s and the NYSE listed Tyson foods played a large part in me becoming vegan, the more I researched and learned about modern animal agriculture the more a realized it was immoral.

I decided I couldn’t invest in either company from a moral stand point, but it took another year before I Realized that if I couldn’t bring my self to profit on the back of suffering, I shouldn’t be paying for it either, so I stopped eating meat.

So far so good,

Vegan schnitzel Parma is just as good.
 

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It has recovered since it's dive after the ING FY2019 Results Announcement back in February this year. It seemed fine to me but I am not great with FA.
Anyway it is doing a buy back, so that may be supporting its price to some degree. There are no higher price levels before this chart period. So it is in its all high time period.

ing 18.4.19.png
 
Looking at an EquiVolume chart it appears there is a very, solid support level at $4.30. Should it fall below $4.10, it might battle to get back up for some time with the volume of selling pressure.

ing 18.4.19 ev.png
 
Ann said:
Looking at an EquiVolume chart it appears there is a very, solid support level at $4.30. Should it fall below $4.10, it might battle to get back up for some time with the volume of selling pressure.

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The price has stabilised since the huge down day when the CEO exited on the 28th of Feb. So I think there is still demand for this stock based on fundamentals and a strong history of the brand in the AU/NZ presence.

The stock was listed only two years ago but the brand is known for decades and has a good foot-hold in Australia and New Zealand:

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It is also a steady dividend payer, currently paying out with and annual yield of 4.5% fully franked.
 
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