Advertisement

Genus profit declines as research and development costs climb

Global animal genetics company Genus posted a minimal rise in half year revenue, but a slight decline in pre-tax profit after an increase in research and development costs for the six months ended December 31st.

Global animal genetics company Genus posted a minimal rise in half year revenue, but a slight decline in pre-tax profit after an increase in research and development costs for the six months ended December 31st.

Revenue for the period totalled £167.2m (2011: £166.9m), broadly unchanged in actual currency, but a 2.0% rise in constant currency. This was boosted by a 6.0% rise in Bovine sales volumes and a 1.0% increase in Porcine volumes.

Advertisement - Article continues below

Adjusted operating profit was 1.0% lower at £22.8m (2011: £23.0m) in actual currency (up 2.0% in constant currency) despite higher feed costs, adverse weather in Latin America and increased revenue investment to support future growth.

Reported pre-tax profit fell to £24.8m from £26.0m a year earlier, while earnings per share for the period declined from 30.2p to 28.7p year-on-year.

Research and development costs rose 13% (17% in constant currency) from £12.7m to £14.4m during the period.

Karim Bitar, Chief Executive, said: "A strong second quarter performance enabled the group to overcome the challenging first quarter and report results for the first half in line with last year. This was a solid performance given the significantly higher feed costs incurred and planned revenue investments made to position the group for future growth.

Advertisement
Advertisement - Article continues below

"Genus has made encouraging progress in implementing the new strategy, including the announcement of our second porcine joint venture in China, and the group remains on track to accelerate its rate of growth from 2014 onwards."

Advertisement - Article continues below

Cash and equivalents at the period end fell from £18.8m to £11.4m year-on-year.

The interim dividend was increased to 5.0p per share, compared to 4.5p the previous year.

Genus scores second porcine JV in ChinaThe company also unveiled its second porcine joint venture agreement in China, which is for a 1,000 sow nucleus farm with Yunnan Shennong Agricultural Group, the leading integrated pork producer in the Yunnan province.

Genus has formed the agreement to further expand its porcine business in the country and to grow its focus on growing in key markets and segments such as the Chinese integrated pork producer segment.

Genus will be a 65% partner in the JV through a cash investment of approximately £2.7m. The JV will operate a state of the art nucleus farm, scheduled for completion within the next 12 months. The group will provide pureline porcine stock from the Genus porcine genetic division's (PIC) global high health pyramid to stock the farm. The JV farm will be managed by Genus.

Chief Executive Officer Karim Bitar said: "This is a significant milestone in our strategy of growing our porcine business in China. The JV with Shennong marks our second JV in China and we continue to pursue further opportunities for porcine joint ventures in this large and important market.

"We look forward to strengthening our partnership with Shennong and achieving our shared objectives of producing affordable, safe and high quality pork."

The share price fell 0.89% to 1,443p by 08:40.

NR

Advertisement
Advertisement

Recommended

Visit/investments/investment-strategy/601044/broker-safety-your-questions-answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Visit/investments/investment-strategy/600861/how-demographics-affects-stock-valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Visit/investments/stocks-and-shares/600863/sirius-minerals-anglo-american-takeover
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Visit/investments/stockmarkets/600634/why-investors-should-be-cautiously-bullish-for-2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Visit/economy/eu-economy/601422/heres-why-investors-should-care-about-the-eus-plan-to-tackle-covid-19
EU Economy

Here’s why investors should care about the EU’s plan to tackle Covid-19

The EU's €750bn rescue package makes a break-up of the eurozone much less likely. John Stepek explains why the scheme is such a big deal, and what it …
28 May 2020
Visit/investments/stockmarkets/601423/as-full-lockdown-ends-what-are-the-risks-for-investors
Stockmarkets

As full lockdown ends, what are the risks for investors?

In the UK and elsewhere, people are gradually being let off the leash as the lockdown begins to end. John Stepek looks at what risks remain for invest…
29 May 2020
Visit/economy/global-economy/601420/james-ferguson-the-virus-the-lockdown-and-what-comes-next
Global Economy

The MoneyWeek Podcast: James Ferguson on the virus, the lockdown, and what comes next

Merryn talks to MoneyWeek regular James Ferguson of Macrostrategy Partnership about what's happened so far with the virus; whether the lockdown was th…
28 May 2020