- Full year profit ahead of expectations
- Record free cash flow
- Accelerated Chinese JV
Animal genetics company Genus (GNS) reported better than expected full year profit and announced an accelerated porcine joint venture in China, sending the shares up 10% to £27.45.
If the gains hold the shares will have notched up an advance of almost 80% so far in 2025, comfortably ahead of the 4% return in the mid-cap FTSE 250 index.
Chief executive Jorgen Kokke commented: ‘Genus achieved a strong performance in FY25 as we executed our strategic priorities. PIC’s growth was broad based, and the business won significant new royalty customers in China.
‘ABS profitability was substantially improved, primarily through VAP initiatives.’
WHY THE SHARES ARE UP
While revenue for the year to 30 June was slightly shy of consensus estimates showing growth of 5% in constant currencies to £672.8 million, adjusted pre-tax profit increased by 38% to £74.3 million, ahead of analysts’ forecasts.
The pig genetics division saw continued strong trading in the second half and self-help measures in the bovine division delivered a significant improvement in adjusted operating profit to to £19.5 million from £14 million in 2024.
Strong growth in adjusted cash from operations to £106.2 million was driven by increased profitability and ‘significant’ improvements in working capital, resulting in a record free cash flow of £40.9 million.
Consequently, net debt reduced to £228.2 million, equivalent to 1.5 times earnings before interest, tax, depreciation, and amortisation.
ACCELERATED JOINT VENTURE
In a separate announcement Genus said its collaboration with Chinese strategic partner Beijing Capital Agribusiness with be formulised into a joint venture (49% owned by Genus) to accelerate the commercialisation of its PRRS (Porcine Reproductive and Respiratory Syndrome) resistant pig technology in China.
Genus will receive an accelerated milestone payment of $7.5 million and a gross cash payment of $160 million, subject to Chinese regulatory approval which is expected to be completed in the 2026 financial year.
The company said proceeds from the transaction are expected to be used to reduce net debt and potentially increase returns to shareholders.
