- Mixed start to the year knocks shares
- Full year profit expected to be met
- Second half weighting
Animal genetics specialist Genus (GNS) reiterated full year profit guidance at its annual general meeting on Wednesday but conceded that phasing is expected to be second half weighted after mixed trading in the period.
Increased uncertainty of meeting market expectations saw the shares fall 3% to £20.47, making them one of the biggest fallers in the FTSE 250.
Company-complied consensus estimates of adjusted pre-tax profit for the year to 30 June 2024 currently sit at £73 million based on six analysts’ forecasts taken at the beginning of November.
Genus delivered adjusted pre-tax profit of £71.5 million in the prior financial year.
RESILIENT PIG GENETICS
PIC (Pig improvement company) trading in the period from 1 July to 21 November has been ‘robust’ with year-on-year growth in volumes and royalties.
Europe and Latin America have performed well with profit ahead of the prior year. A high proportion of royalties in the US has mitigated Genus against pig producer losses caused by low pig prices.
However, the Chinese market has seen continued depressed pig prices with the majority of producers making losses. Relatively strong pig prices in the same period in 2022 means profit in Asia is trending lower year to date.
CHALLEGING START FOR BOVINE GENETICS
Genus said trading in Bovine genetics has experienced lower year-on-year volumes slightly offset by better pricing and mix. Weaker global milk prices, especially in China has contributed to lower demand for genetics.
Meanwhile Brazil continues to see weak beef demand driven by macroeconomic pressures. All told, the ABF (American Breeders Service) division’s adjusted operating profit is lower than the prior year.
More encouragingly the company said there are ‘significant’ improvements underway which are expected to improve full year adjusted profit performance.
Numis has maintained its forecast for full year adjusted operating profit to come in at £88.8 million slightly above market consensus of £88.5 million.
‘Overall, the company remains on track to deliver market expectations but there is no doubt that it has been a difficult start to the year.’
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