Emerging markets boost sales at Genus

Strong growth in sales volumes in Asia has seen animal genetics firm Genus increase revenue by almost a tenth in the first half of its financial year.

Furthermore, after reviewing its dividend policy last year, the firm has decided to start paying an interim dividend for the first time this year. The board has approved an interim dividend of 4.5p per share payable on March 30th.

Revenue for the six months ended December 31st rose 9% from £153.2m to £166.9m, a 10% increase at constant exchange rates (CER). Bovine sales volumes were up 8%, helped by strong increases in China and India particularly, while Porcine volumes, up 13%, were driven by growth in Asia as a whole.

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Genus, which focuses on creating advances in animal breeding through naturally applied biotechnology and quantitative genetics, said that the North American and Latin American markets also traded well, while European profits were affected by weak demand in a depressed European pig market.

Higher sales, along with the benefits of refinancing in 2011 and lower interest rates, helped adjusted pre-tax profits rise 22% to £23.3m, from £19.1m the year before (+25% at CER). Adjusted results exclude the valuation movement on biological assets, amortisation of acquired intangible assets, share-based payment expense and exceptional items. Finance costs were £1.1m, well below the £3.8m recorded in the corresponding period in 2010.

Statutory pre-tax profits were 13% higher at £26m, compared with Panmure Gordon's forecast of £22m.

"Global population growth and increased urbanisation in developing countries is accelerating demand for protein in diets," said Chief Executive Karim Bitar. "This demand increase and pressure on prices, driven by higher feed costs, can only be met through improved efficiency and greater application of technology in farming. Genus' market-leading genetics are key ingredients in this quest for improved productivity," he said.

Net debt was £69.6m at the end of the period, compared with £78m the year before, but slightly ahead of the £67.9m at June 30th 2011.

"The group is continuing to trade well in market conditions that remain favourable in most markets. As a result, the board expects the group to make further progress in the second half of the year in line with market expectations," the statement said.

BC