Last year's erratic weather patterns meant a combination of rising grain prices and unworkable land, which hit the farming sector hard. This proved bad news for animal DNA company
Genus has reorganised its business units, so that all of its geographic regions are now grouped into individual segments focused on either porcine or bovine operations, with only Asia remaining as a separate operating entity. The porcine business - Genus PIC - felt the effect of lost production due to high feed prices, particularly in Latin America. However, more stable pricing in Europe and a restructuring in Germany meant operating profits here still increased by an underlying 9 per cent to £24.6m. The weaker performance at Genus ABS, the global dairy and bovine business, was due to weather-related problems in Latin America, offset somewhat by better pricing conditions in Europe and the US - underlying profits here fell 4 per cent down at £11m.
Broker N+1 Singer forecasts adjusted full-year pre-tax profit of £48.7m, giving EPS of 55.2p (from £46.5m and 52.7p in 2012).
|ORD PRICE:||1,437p||MARKET VALUE:||£867m|
|TOUCH:||1,431-1,437p||12-MONTH HIGH:||1,535p||LOW: 1,129p|
|DIVIDEND YIELD:||1.1%||PE RATIO:||22|
|NET ASSET VALUE:||452p*||NET DEBT:||23%|
|Half-year to 31 Dec||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 13 Mar
Payment: 8 Apr
*Includes intangible assets of £133m, or 219p a share
Chief executive Karim Bitar expects a better performance in the second half, with input costs falling for farmers just as dairy and pork prices improve. But, with the shares trading on a hardly cheap 26 times forecast earnings, and with a nothing special dividend yield, the possibility of better times ahead looks factored in. Hold.
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