Genetics specialist Genus (GNS) is still struggling with its Asian business. The weak pork prices that hit profits in China last year have persisted into the new financial year, only to be compounded by a ban on pig imports from Europe and North America into Russia. First-half revenues for Genus Asia tumbled 14 per cent to £21m, and divisional operating profits fell by a fifth to £3m.
These problems aren't expected to ease any time soon, but chief executive Karim Bitar says Genus will nonetheless exceed market expectations in 2014-15. That's largely thanks to strong trading in North America, where a diarrhoea epidemic kept pig prices high and farmers' margins "exceptionally strong". The core porcine business posted 17 per cent growth in first-half profits at constant currencies, boosted by a contribution from the Génétiporc acquisition.
Acquisitions will continue to play a significant part in the Genus growth strategy. After the period-end, the group took a 51 per cent stake in In Vitro Brazil - a company focused on accelerating the genetic improvement of bovine herds - for £4.6m.
Analysts at Numis expect pre-tax profits of £44.2m this year, giving EPS of 51.3p (up from £39.3m and 46.4p, respectively, in full year 2014).
| GENUS (GNS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,351p | MARKET VALUE: | £823m | |
| TOUCH: | 1,345-1,350p | 12-MONTH HIGH: | 1,382p | LOW: 925p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 484p* | NET DEBT: | 25% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 182 | 22.0 | 28.4 | 5.5 |
| 2014 | 199 | 28.6 | 33.0 | 6.1 |
| % change | +9 | +30 | +16 | +11 |
Ex-div: 5 Mar Payment: 27 Mar *Includes intangible assets of £145m, or 237p a share | ||||
