- Strong trading in four months to October
- Full year profit to meet expectations
- Efficiency gains to drive profitability
Animal genetics specialist Genus (GNS) jumped 4% after reporting strong trading for the four months to 31 October and reiterating full year profit guidance.
The shares are down around 20% over the last year following a profit warning in February 2024, reflecting weak pork prices in China impacting demand for its services. The company also flagged currency headwinds.
Consensus full year profit estimates have since come down to meet the company’s revised guidance and today Genus provided some comfort for investors, confirming it expects to meet market expectations which call for currency adjusted pre-tax profit of £63.7 million.
STRONG TRADING
Genus said trading in the North American, Latin American, and Asian pig genetics division has been strong, driving year-on-year growth in volumes, royalty revenue and constant currency adjusted operating profit.
The company said its Chinese operations continued to win new royalty customers with pork prices remaining at levels which support industry profitability, although producers were said to remain cautious.
The bovine division saw improved trading in the period with good overall genetic volumes up on the previous year. The company’s efficiency drive under its VAP (Value Acceleration Programme) drove operating profit growth and phase two is expected to deliver ‘significant’ profit growth for the full year.
REGULATORY SUBMISSIONS
The group continues to make further regulatory submissions in relation to its novel PRRS (Porcine Reproductive and Respiratory Syndrome Virus) Resistant Pig programme.
In November, the company achieved a key milestone with the submission of the Validation Report and Durability Plan to the US FDA (Food and Drug Administration), alongside further submissions to other international regulators.
Back in February, Genus warned of a six month to one year delay to the final FDA approval of PRRS after the regulator requested additional submissions.
