Unfortunate timing is being blamed for a disappointing stock market float of Australia’s largest poultry company, Ingham’s Enterprises Pty. Ltd. And that could mean tough times ahead for the company’s contract chicken farmers as Ingham’s adjusts its business with future cost-cutting.

Recent global uncertainty over the U.S. election result and Brexit have been making financial institutions and traders nervous, which turned out to be bad news for the stock market launch of Ingham’s, reports ABC Online.

Ingham’s owners – U.S.-based private equity firm, TPG – had expected the float to value the company at AU$1.3 billion to AU$1.5 billion (US$996 million to 1.15 billion), and to sell off between 50 and 70 percent of its holding. This had been predicted to be Australia’s largest share listing this year.

In the end, with the sale actually raising 25 percent less than expected at AU$440 million (US$339 million), analysts are now predicting Ingham’s will undergo a period of cost-cutting, which could adversely impact its contract growers. Expansion of exports and the development of new chicken product lines are other routes Ingham’s is expected to take to improve its future business prospects.

Australian poultry sector competitive

Australian poultry meat production and consumption have grown at well above global average rates over recent years, largely in response to the ever-increasing prices for the nation’s hitherto favorite meats, beef and lamb. Trading difficulties have restricted exports, and rapidly increasing imports of poultry meat have been forcing domestic producers’ prices downwards.

These conditions have led to a high degree of concentration in the country’s poultry meat companies, according to Louise Cordina, CEO of family-owned poultry company, Cordina Farms. She confirmed that the Australian market had become very competitive, adding this will have impacted the Ingham’s float.

“Yes it’s extremely competitive,” she told ABC Online. “It has a high-volume low-margin mentality, that means business expect growth each year. And with the volume of chicken produced, if people get their numbers wrong, it has a massive flow-on effect for the whole industry.”

Founded 65 years ago, Cordina Farms produces a range of fresh chicken products and markets these nationwide. In recent times, the firm has adapted to the challenging market conditions by focusing on the production of ready meals and ready-to-eat products at its new processing plant in Wyong, New South Wales.