Macquarie Conference: Updates from Inghams, Dexus and Medibank

The Macquarie (ASX: MQG) conference features presentations from more than 100 top Australian and New Zealand companies.

Here are some of the more interesting updates and commentary for ASX-listed companies.

Inghams: Bleak but unsurprising

Inghams (ASX: ING) has been crippled in the face of "severe" pandemic and weather events.

The poultry suppler said the second-half of FY22 has been "seriously impacted" by the ongoing effects of omicron, natural disaster and cost inflation.

Employee attendance levels have improved, but covid-related absenteeism continues to impact operations, and role vacancies remain elevated due to industry-wide labour shortages. 

Inghams said it was “actively” trying to offset cost pressures by passing on higher prices. Some price increases have been achieved, with more to come. 

Inghams shares briefly hit all-time lows on Tuesday, down -6.7% to $2.80 in early trade.

It feels like more and more external forces are piling against the poultry business. While the narrative is bleak, the business is doing what it can to mitigate the headwinds. 

Inghams 12-month price chart

Dexus: Things are getting better

The covid-borne narrative of working from home, transition to online shopping and death-of-the-office has taken a massive toll on sentiment towards retail and office REITs.

If you’re not an industrial REIT like Goodman (ASX: GMG) and Centuria Industrial (ASX: CIP), you’re probably still struggling to push above pre-covid valuations.

Dexus (ASX: DXS) said that “we are seeing the first signs of improvement in Sydney office market effective rents”.

The company upgraded its FY22 guidance to deliver earnings per share (EPS) growth "of not less than 2.5%".

On the topic of inflation, Dexus said that historically, Sydney office rental growth has outpaced inflation across most of the past four decades.

"In the past 43 years where inflation increased by 4%+, as it did recently, 3 out of 5 times rental growth outpaced CPI."

Dexus shares have been trading sideways since last June and remains -18% below February 2020 levels.

Dexus 12-month price chart

Medibank: Building momentum

Medibank (ASX: MPL) has provided a sound update for FY22, citing:

• Policyholder (number of customers) continue to rise

  • Up 4.8% for the 12 months to 31 December, 2021

• Lapse rates continue to decline

• Premium increases are solid (tracking just above wage growth)

  • 2.74% premium increase vs. 2.4% wage growth in 2021

  • Forecast 2.7% premium increase vs. 2.75% wage growth in 2022

Source: Medibank Macquarie Conference Presentation

Insurance is one of many financial sub-sectors poised to benefit from higher interest rates.

Medibank 12-month price chart