STRUCTURALLY STRENGTHENING GENUS IN A
CHALLENGING YEAR
WEBCAST AVAILABLE AT 7:01AM GMT, 2.01 EST
Genus (LSE:GNS), a leading global animal genetics company, today
announces its preliminary results for the year ended 30 June 2024.
The full report has been made available on the investors section of
the Genus plc website. The Company will discuss its corporate,
operational and financial highlights in a pre-recorded webcast at
7:01 AM GMT, 2.01 EST.
Commenting on the performance and outlook, Jorgen Kokke,
Chief Executive Officer, said:
“Genus made significant progress against its strategic
priorities during FY24. I am confident that our decisive actions to
structurally strengthen the Group will yield significant benefits
in the years to come.
In FY25, we will continue to execute against our strategic
priorities and we expect to achieve significant growth in Group
adjusted profit before tax in constant currency, in-line with
market expectations. However, Sterling has continued to appreciate
against key foreign currencies since our trading update on 17 July
2024, and we now expect a currency headwind of approximately £8-9m
in FY25, if current exchange rates continue throughout the fiscal
year.”
Outlook
- Market conditions stable to slowly improving although we remain
cautious, particularly in China
- Solid adjusted operating profit growth expected from PIC in
constant currency
- ABS expected to return to adjusted operating profit growth in
constant currency, a stronger business with actions from VAP
- Management expects significant growth in FY25 Group adjusted
profit before tax in constant currency, in-line with current market
expectations
- Currency headwind of approximately £8-9m in FY25 if current
exchange rates continue throughout the fiscal year
Results presentation and live Q&A session today
A pre-recorded investors, analysts and bankers briefing to
discuss the preliminary results for the year ended 30 June 2024
will be accessible via the following link from 7:01am UK time
today:
https://webcasting.buchanan.uk.com/broadcast/66b0dea408f685532e0148c7
This will be followed by at 10.30 UKT time by a live Q&A
session by invitation at Peel Hunt, 100 Liverpool Street, EC2M 2AT.
Those unable to attend in person can also join via Zoom. Please
contact Verity Parker at Buchanan for details:
verity.parker@buchanancomms.co.uk
Results Highlights
Adjusted results1
Statutory results
Actual currency
Constant currency
change2
Actual currency
Year ended 30 June
2024
2023
Change
2024
2023
Change
£m
£m
%
%
£m
£m
%
Revenue
668.8
689.7
(3)
2
668.8
689.7
(3)
Operating profit
67.0
74.6
(10)
(3)
6.4
40.5
(84)
Operating profit inc JVs
78.1
85.8
(9)
(3)
n/a
n/a
n/a
Profit before tax
59.8
71.5
(16)
(8)
5.5
39.4
(86)
Net cash flows from operating
activities
55.1
45.9
20
n/m5
29.8
50.4
(41)
Free cash flow6
(3.2)
9.1
n/m5
n/m5
Basic earnings per share (pence)
65.5
84.8
(23)
(15)
12.0
50.8
(76)
Dividend per share (pence)
32.0
32.0
-
Strategic progress achieved despite challenging
markets
- Management actions limited the impact on adjusted operating
profit in a difficult year for volumes:
- ABS Value Acceleration Programme (“VAP”) initiated to
structurally improve Bovine’s margins, cash generation and returns
profile; Phase 1 delivered £7.3m of adjusted operating profit
benefit in FY24 (£10m annualised benefit); Phase 2 underway and
expected to deliver £5m of adjusted operating profit benefit in
FY25 (£10m annualised)
- R&D strategic review completed, resulting in a sharper
focus on key workstreams and savings of £2.4m realised in FY24 (£5m
of annualised adjusted operating profit benefit in FY25)
- Exceptional restructuring costs related to management actions
of £6.7m in FY24
- Encouraging regulatory progress on the PRRS3 Resistant Pig
(“PRP”):
- Favourable regulatory determinations from Brazil (April 2024)
and Colombia (October 2023)
- Continuing positive engagement with the US FDA4, with approval
expected in 2025
- Initial submissions to Canadian and Japanese authorities made,
as planned
- PIC PRPs arriving in China imminently for in-country
testing
Financial performance as expected, with structural changes
driving stronger performance in the second half
- Second half adjusted operating profit including JVs of £40.0m,
15% higher year on year in constant currency, with £9.4m of benefit
from management actions. Compares with first half adjusted
operating profit including JVs of £38.1m, 17% lower year on year in
constant currency
- Adjusted operating profit including JVs 3%2 lower in constant
currency (9% lower in actual currency). Good PIC ex-China growth
and the realisation of benefits across ABS and R&D were offset
by poor China performances and ABS volume trends
- Adjusted profit before tax (PBT) of £59.8m, 8%2 lower in
constant currency (16% lower in actual currency). Statutory PBT of
£5.5m, 86% lower in actual currency, primarily due to a £8.6m
decrease in the non-cash fair value IAS41 valuation of Group
biological assets (including JV’s) and net exceptional expenses of
£24.6m8 (2023: £3.5m net expense)
- New cash conversion1 metric introduced which includes
investments in biological assets, capital expenditure, lease
repayments and cash received from JVs; 71% achieved in FY24 (2023:
53%)
- Net Debt1 increased to £248.7m with a net debt to adjusted
EBITDA1 ratio of 2.0x, as expected, within our target range of 1.0x
to 2.0x
Divisional headlines7
- PIC – Resilient growth ex-China, in a difficult market PIC
China doubled its royalty customer numbers:
- Continued genetic improvement, delivering $4.39/pig of genetic
profit gain (2023: $3.74/pig)
- PIC volumes increased 3%, revenue decreased 1%2 and
strategically important royalty revenue increased 4%2, in constant
currency
- PIC trading regions ex-China adjusted operating profit
increased 4%2 in constant currency
- PIC China adjusted operating profit decreased 60%2 in constant
currency due to the challenging market environment and planned
supply chain investments; good commercial progress – 13 new royalty
customers won since June 2023
- ABS – Challenging markets, particularly China; VAP delivering
structural improvements and significant cost efficiencies:
- Volumes decreased 6% (ABS ex-China volumes decreased 1%) with
sexed volumes up 3%, beef volumes decreased 6%
- Revenue increased 4%2 in constant currency as price actions,
mix and IntelliGen growth offset volume declines
- Adjusted operating profit decreased 3%2 in constant currency
mitigated by VAP actions
- VAP Phase 1 achieved £10m run-rate of annualised adjusted
operating profit improvement by the end of FY24; Phase 2 underway
and expected to deliver £5m of savings in FY25 (£10m
annualised)
1 Adjusted results are the Alternative
Performance Measures (‘APMs’) used by the Board to monitor
underlying performance at a Group and operating segment level,
which are applied consistently throughout. These APMs should be
considered in addition to statutory measures, and not as a
substitute for or as superior to them.
2 Constant currency percentage movements
are calculated by representing the results for the year ended 30
June 2024 at the average exchange rates applied to adjusted
operating profit for the year ended 30 June 2023
3 Porcine Reproductive and Respiratory
Syndrome
4 United States Food and Drug
Administration
5 n/m = not meaningful
6 Free cash flow definition has changed
this year to include lease repayments, the 2023 comparative has
also been restated
7 Prior year period restated.
8 Net exceptional expenses of £24.6m
predominantly comprised £10.4m related to ST litigation and
settlements, £6.7m related to restructuring activity and £7.4m
related to a number of potential corporate transactions which are
no longer active
About Genus
Genus advances animal breeding and genetic improvement by
applying biotechnology and sells added value products for livestock
farming and food producers. Its technology is applicable across
livestock species and is currently commercialised by Genus in the
dairy, beef and pork food production sectors.
Genus's worldwide sales are made in over 80 countries under the
trademarks 'ABS' (dairy and beef cattle) and 'PIC' (pigs) and
comprise semen, embryos and breeding animals with superior genetics
to those animals currently in farms. Genus's customers' animals
produce offspring with greater production efficiency and quality,
and our customers use them to supply the global dairy and meat
supply chains. Genus thereby enables its customers to produce
greater volumes of high quality animal protein whilst using fewer
inputs such as feed, water and land. This is both good for the
environment and the sustainability of our customers’
operations.
Genus’s competitive edge comes from the ownership and control of
proprietary lines of breeding animals, the biotechnology used to
improve them and its global supply chain, technical service and
sales and distribution network.
Headquartered in Basingstoke, United Kingdom, Genus companies
operate in over 24 countries on six continents, with research
laboratories located in Madison, Wisconsin, USA.
Forward-looking Statements
This Announcement may contain, and the Company may make verbal
statements containing “forward-looking statements” with respect to
certain of the Company’s plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Announcement.
Forward-looking statements sometimes use words such as “aim”,
“anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”,
“goal”, “believe”, “seek”, “may”, “could”, “outlook”, “will” or
other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances which are beyond the
control of the Company, including amongst other things, diverse
factors such as domestic and global economic business conditions,
market-related risks such as fluctuations in commodity prices,
interest rates and exchange rates, the policies and actions of
governmental and regulatory authorities, the effect of sanctions on
the ability to trade, the effect of competition, inflation,
deflation, the timing effect and other uncertainties of future
acquisitions or combinations within relevant industries, the effect
of the spread of African Swine Fever and other animal diseases, the
continued development and improvement of our IntelliGen®
technology, the development and registration of our innovative new
products, such as our gene edited porcine reproductive and
respiratory syndrome virus resistant pigs, the continued growth in
emerging markets, the effect of tax and other legislation and other
regulations in the jurisdictions in which the Company and its
respective affiliates operate, the effect of volatility in the
equity, capital and credit markets on the Company’s profitability
and ability to access capital and credit, a decline in the
Company’s credit ratings; the effect of operational risks; and the
loss of key personnel. As a result, the actual future financial
condition, performance and results of the Company may differ
materially from the plans, goals and expectations set forth in any
forward-looking statements. Except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this Announcement to
reflect any changes in the Company’s expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statement is based.
No statement in this Announcement is intended to be a profit
forecast, and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
Information contained in this Announcement should not be relied
upon as a guide to the Company’s future performance.
This announcement is available on the Genus website
www.genusplc.com
GROUP INCOME STATEMENT
For the year ended 30 June 2024
2024 £m
2023 £m
REVENUE
668.8
689.7
Adjusted operating profit
67.0
74.6
Adjusting items:
– Net IAS 41 valuation movement on
biological assets
(23.2)
(16.9)
– Amortisation of acquired intangible
assets
(5.8)
(7.7)
– Share-based payment expense
(7.0)
(6.0)
(36.0)
(30.6)
Exceptional items (net)
(24.6)
(3.5)
Total adjusting items
(60.6)
(34.1)
OPERATING PROFIT
6.4
40.5
Share of post-tax profit of joint ventures
and associates retained
19.1
10.5
Other gains and losses
(1.7)
2.7
Finance costs
(22.2)
(15.4)
Finance income
3.9
1.1
PROFIT BEFORE TAX
39.4
Taxation
(3.1)
(7.6)
PROFIT FOR THE YEAR
2.4
31.8
ATTRIBUTABLE TO:
Owners of the Company
7.9
33.3
Non-controlling interest
(5.5)
(1.5)
2.4
31.8
EARNINGS PER SHARE
Basic earnings per share
12.0p
50.8p
Diluted earnings per share
11.9p
50.5p
2024 £m
2023 £m
Alternative Performance
Measures
Adjusted operating profit
67.0
74.6
Adjusted operating loss attributable to
non-controlling interest
0.9
0.4
Pre-tax share of profits from joint
ventures and associates excluding net IAS 41 valuation movement
10.2
10.8
Adjusted operating profit including
joint ventures and associates
78.1
85.8
Net finance costs
(18.3)
(14.3)
Adjusted profit before tax
59.8
71.5
Adjusted earnings per share
Basic adjusted earnings per share
65.5p
84.8p
Diluted adjusted earnings per share
65.0p
84.2p
Adjusted results are the Alternative
Performance Measures (‘APMs’) used by the Board to monitor
underlying performance at a Group and operating segment level,
which are applied consistently throughout. These APMs should be
considered in addition to statutory measures, and not as a
substitute for or as superior to them.
GROUP STATEMENT OF COMPREHENSIVE
INCOME
For the year ended 30 June 2024
2024 £m
2024 £m
2023 £m
2023 £m
PROFIT FOR THE YEAR
2.4
31.8
Items that may be reclassified
subsequently to profit or loss
Foreign exchange translation
differences
(16.0)
(27.2)
Fair value movement on net investment
hedges
0.4
–
Fair value movement on cash flow
hedges
(1.6)
0.8
Tax relating to components of other
comprehensive expense/(income)
(0.1)
3.1
(17.3)
(23.3)
Items that may not be reclassified
subsequently to profit or loss
Actuarial loss on retirement benefit
obligations
(6.0)
(40.4)
Movement on pension asset recognition
restriction
3.9
38.3
Release of additional pension
liability
2.1
3.0
(Loss)/gain on equity instruments measured
at fair value
(2.8)
1.7
Tax relating to components of other
comprehensive expense/(income)
(0.1)
(1.2)
(2.9)
1.4
OTHER COMPREHENSIVE EXPENSE FOR THE
YEAR
(20.2)
(21.9)
TOTAL COMPREHENSIVE (EXPENSE)/INCOME
FOR THE YEAR
(17.8)
9.9
ATTRIBUTABLE TO:
Owners of the Company
(12.3)
11.1
Non-controlling interest
(5.5)
(1.2)
(17.8)
9.9
GROUP STATEMENT OF CHANGES IN
EQUITY
For the year ended 30 June 2024
Called up share capital
£m
Share premium account
£m
Own shares £m
Trans- lation reserve
£m
Hedging reserve £m
Retained earnings £m
Total £m
Non- controlling interest
£m
Total equity £m
BALANCE AT 30 June 2022
6.6
179.1
(0.1)
50.9
1.4
340.6
578.5
(6.4)
572.1
Foreign exchange translation differences,
net of tax
–
–
–
(24.2)
–
–
(24.2)
0.3
(23.9)
Fair value movement on net investment
hedges, net of tax
–
–
–
–
–
–
–
–
–
Fair value movement on cash flow hedges,
net of tax
–
–
–
–
0.6
–
0.6
–
0.6
Gain on equity instruments measured at
fair value, net of tax
–
–
–
–
–
0.7
0.7
–
0.7
Actuarial loss on retirement benefit
obligations, net of tax
–
–
–
–
–
(30.3)
(30.3)
–
(30.3)
Movement on pension asset recognition
restriction, net of tax
–
–
–
–
–
28.7
28.7
–
28.7
Recognition of additional pension
liability, net of tax
–
–
–
–
–
2.3
2.3
–
2.3
Other comprehensive (expense)/income
for the year
–
–
–
(24.2)
0.6
1.4
(22.2)
0.3
(21.9)
Profit/(loss) for the year
–
–
–
–
–
33.3
33.3
(1.5)
31.8
Total comprehensive income/(expense)
for the year
–
–
–
(24.2)
0.6
34.7
11.1
(1.2)
9.9
Recognition of share-based payments, net
of tax
–
–
–
–
–
6.3
6.3
–
6.3
Dividends
–
–
–
–
–
(21.0)
(21.0)
–
(21.0)
Adjustment arising from change in
non-controlling interest and written put option
–
–
–
–
–
–
–
(0.1)
(0.1)
BALANCE AT 30 June 2023
6.6
179.1
(0.1)
26.7
2.0
360.6
574.9
(7.7)
567.2
Foreign exchange translation differences,
net of tax
–
–
–
(16.6)
–
–
(16.6)
–
(16.6)
Fair value movement on net investment
hedges, net of tax
–
–
–
0.4
–
–
0.4
–
0.4
Fair value movement on cash flow hedges,
net of tax
–
–
–
–
(1.1)
–
(1.1)
–
(1.1)
Loss on equity instruments measured at
fair value, net of tax
–
–
–
–
–
(2.8)
(2.8)
–
(2.8)
Actuarial loss on retirement benefit
obligations, net of tax
–
–
–
–
–
(4.6)
(4.6)
–
(4.6)
Movement on pension asset recognition
restriction, net of tax
–
–
–
–
–
2.9
2.9
–
2.9
Recognition of additional pension
liability, net of tax
–
–
–
–
–
1.6
1.6
–
1.6
Other comprehensive (expense)/income
for the year
–
–
–
(16.2)
(1.1)
(2.9)
(20.2)
–
(20.2)
Profit/(loss) for the year
–
–
–
–
–
7.9
7.9
(5.5)
2.4
Total comprehensive income/(expense)
for the year
–
–
–
(16.2)
(1.1)
5.0
(12.3)
(5.5)
(17.8)
Recognition of share-based payments, net
of tax
–
–
–
–
–
6.6
6.6
–
6.6
Dividends
–
–
–
–
–
(21.0)
(21.0)
–
(21.0)
Adjustment arising from change in
non-controlling interest and written put option
–
–
–
–
–
–
–
8.9
8.9
BALANCE AT 30 June 2024
6.6
179.1
(0.1)
10.5
0.9
351.2
548.2
(4.3)
543.9
GROUP BALANCE SHEET
As at 30 June 2024
2024 £m
2023 £m
ASSETS
Goodwill
110.3
107.8
Other intangible assets
65.4
66.2
Biological assets
297.4
318.2
Property, plant and equipment
182.0
164.4
Interests in joint ventures and
associates
60.5
53.5
Other investments
1.1
8.8
Derivative financial assets
1.2
4.9
Other receivables
11.8
8.2
Deferred tax assets
28.1
16.5
TOTAL NON-CURRENT ASSETS
757.8
748.5
Inventories
57.1
61.3
Biological assets
32.3
23.8
Trade and other receivables
135.2
132.1
Cash and cash equivalents
42.5
36.3
Income tax receivable
2.1
4.0
Derivative financial assets
1.9
1.5
TOTAL CURRENT ASSETS
271.1
259.0
TOTAL ASSETS
1,028.9
1,007.5
LIABILITIES
Trade and other payables
(123.2)
(122.0)
Interest-bearing loans and borrowings
(4.9)
(4.2)
Provisions
(1.0)
(1.8)
Deferred consideration
(0.6)
–
Obligations under leases
(14.0)
(10.0)
Tax liabilities
(5.2)
(7.4)
Derivative financial liabilities
(1.7)
(1.8)
TOTAL CURRENT LIABILITIES
(150.6)
(147.2)
Trade and other payables
(4.2)
–
Interest-bearing loans and borrowings
(228.2)
(196.0)
Retirement benefit obligations
(6.6)
(6.9)
Provisions
(0.4)
(10.3)
Deferred consideration
(0.2)
(0.6)
Deferred tax liabilities
(44.4)
(51.2)
Derivative financial liabilities
(6.3)
(6.2)
Obligations under leases
(44.1)
(21.9)
TOTAL NON-CURRENT LIABILITIES
(334.4)
(293.1)
TOTAL LIABILITIES
(485.0)
(440.3)
NET ASSETS
543.9
567.2
EQUITY
Called up share capital
6.6
6.6
Share premium account
179.1
179.1
Own shares
(0.1)
(0.1)
Translation reserve
10.5
26.7
Hedging reserve
0.9
2.0
Retained earnings
351.2
360.6
EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY
548.2
574.9
Non-controlling interest
1.2
(2.2)
Put option over non-controlling
interest
(5.5)
(5.5)
TOTAL NON-CONTROLLING INTEREST
(4.3)
(7.7)
TOTAL EQUITY
543.9
567.2
GROUP STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
2024 £m
2023 £m
NET CASH FLOW FROM OPERATING
ACTIVITIES
29.8
50.4
CASH FLOWS FROM INVESTING
ACTIVITIES
Dividends received from joint ventures and
associates
4.7
2.6
Joint venture and associate loan
investment
(2.2)
(1.9)
Acquisition of joint venture and
associate
-
(1.0)
Sale of other investments
5.1
3.4
Acquisition of Xelect Limited
(2.9)
-
Acquisition of other investments
-
(0.4)
Payment of deferred consideration
-
(0.8)
Purchase of property, plant and
equipment
(14.8)
(25.9)
Purchase of intangible assets
(9.9)
(9.3)
Proceeds from sale of property, plant and
equipment
0.7
2.4
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES
(19.3)
(30.9)
CASH FLOWS FROM FINANCING
ACTIVITIES
Drawdown of borrowings
140.4
126.8
Repayment of borrowings
(108.5)
(111.7)
Payment of lease liabilities
(13.7)
(11.1)
Equity dividends paid
(21.0)
(21.0)
Dividend to non-controlling interest
-
(0.1)
Debt issue costs
-
(1.1)
NET CASH OUTFLOW FROM FINANCING
ACTIVITIES
(2.8)
(18.2)
NET INCREASE IN CASH AND CASH
EQUIVALENTS
7.7
1.3
Cash and cash equivalents at start of the
year
36.3
38.8
Net increase in cash and cash
equivalents
7.7
1.3
Effect of exchange rate fluctuations on
cash and cash equivalents
(1.5)
(3.8)
TOTAL CASH AND CASH EQUIVALENTS AT 30
JUNE
42.5
36.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240904874140/en/
Enquiries: Genus plc (Jorgen Kokke, Chief Executive
Officer / Alison Henriksen, Chief Financial Officer / Anand Date,
Investor Relations Director) Tel: 01256 345970 Buchanan (Charles
Ryland / Toto Berger / Sophie Wills / Verity Parker) Tel: 0207
4665000
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