Genus posts rise in FY profits but warns over hit to growth
Animal genetics company Genus reported a jump in full-year profit and revenue on Thursday as it continued to win new customers, with growth in both of its business, but warned that recent volatility in the Chinese porcine market will dent growth.
In the year to 30 June, adjusted pre-tax profit rose 29% to £84.8m, with revenues up 4% to £574.3m. Genus said it had achieved the fastest pre-tax profit growth rate in more than 10 years despite currency headwinds.
Both businesses achieved growth in their key metrics. Genus PIC's revenues were up 11%, with the porcine royalty revenue also 11% higher. All regions contributed to growth, with China a key driver as producers restocked as a result of African Swine Fever. Russia and Brazil were also particularly strong, the company said.
Meanwhile, Genus ABS saw revenues rise 13%, underpinned by a 15% increase in volumes.
Chief executive Stephen Wilson said: "Genus performed very strongly and made significant strategic progress in the 2021 fiscal year.
"Both PIC and ABS grew adjusted operating profits in double digits, with China, Brazil, India and Russia being notably high growth markets. PIC continued its expansion in China and gained further share with large producers, as they continued to rebuild as a result of African Swine Fever. PIC had success around the world with key accounts as a result of our leading genetics and supply chain.
"ABS's volume growth in the year was a record, driven by the continued success of Sexcel®, and strong performance by our proprietary NuEra® beef genetics. Latin America, Europe and Asia all grew strongly, and ABS's adjusted operating margin improved through better product mix and operating leverage."
Wilson highlighted recent volatility in the Chinese porcine market and said this is expected to continue for some months, creating a short-term headwind in FY22, primarily for PIC China. As a result, and despite an expected strong performance in other areas of the business, the company now expects growth to be lower than its medium-term goal in the current year before increasing again in FY23.