- Record six-month adjusted operating profit
- Recovery in China continues
- Strong increase in royalty revenues
Animal genetics specialist Genus (GNS) saw its shares jump 10% to £29.84 on Thursday after the firm notched-up record half-year adjusted profit amid a rebound in China.
The share price remains around half the peak levels seen in September 2021.
Chief executive Steve Wilson, who announced he would retire in September 2023 after 10 years with the group, commented:
‘The group achieved a good performance during the first half of the year, despite challenging market conditions for producers in several markets.
‘PIC (pig genetics) delivered a new record half year performance, with strong momentum in North America in particular, and China's performance improved as the porcine market began a gradual recovery from the cyclical downturn, as we had expected.’
HOW DID THE COMPANY PERFORM?
Revenue for the first half to 31 December grew 25% to £350.2 million aided by foreign currency gains. Excluding currency effects underlying revenues grew 13% year on year.
The pig genetics business saw volumes expand 5%, while price increases drove 12% overall revenue growth and royalty revenue was up 14%.
Bovine (cow) genetic volumes increased by 4% and ‘robust price increases’ to offset cost increases in Europe resulted in revenues increasing by 13% year on year.
Operating profit including income from joint ventures but excluding gene editing increased by 15% in constant currencies to £56 million.
Increased debt due to investments and higher interest rates pushed up finance expenses which restricted adjusted pre-tax profit growth to 1% (14% actual) at £42.1 million.
Higher interest rates also pushed up the discount rates the company uses to value its biological assets which means statutory pre-tax profit fell 39% to £15 million.
The company ended the period with net debt of £214.5 million representing a net debt to EBITDA (earnings before interest, tax, depreciation, and amortisation) ratio of 1.8 times, within the one to two times target range.
The board has recommended an unchanged interim dividend of 10.3p per share.
