News of a pig virus epidemic in North America sent shares in animal breeder and genetics supplier Genus (GNS) tumbling following its half-year results. Meanwhile, sluggish growth in China and a stronger pound helped keep adjusted operating profit (including joint venture businesses) flat at £23.4m. Such factors have also cast doubts on the second-half's prospects, despite underlying constant currency revenue growth of 10 per cent in the period.
October's acquisition of porcine genetics business Génétiporc, however, should help offset those challenges and it has already contributed to a 7 per cent increase in porcine volumes during the first half. Indeed, the success of that deal persuaded Genus' 49 per cent-owned joint venture in Brazil to snap up Génétiporc's Brazilian subsidiary for £4.9m in February in a bid to consolidate its Latin American foothold. Meanwhile, expansion into China's porcine market saw Asian profits suffer at the hands of investment costs, prompting a 45 per cent fall in operating profit in the region. Chief executive Karim Bitar said progress in Asia would be crucial to offset transient headwinds in North America, although he pointed to the resilience of the group's bovine business, where volumes grew 4 per cent in the period.
Broker Panmure Gordon expects end-2014 EPS of 51.2p (from 55p in 2013).
| GENUS (GNS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,180p | MARKET VALUE: | £719m | |
| TOUCH: | 1,179-1,181p | 12-MONTH HIGH: | 1,609p | LOW: 1,113p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 471p* | NET DEBT: | 28% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 167 | 22.3 | 25.6 | 5.0 |
| 2013 | 182 | 22.0 | 28.4 | 5.5 |
| % change | +9 | -1 | +11 | +10 |
Ex-div: 5 Mar Payment: 28 Mar *Includes intangible assets of £138m, or 227p a share | ||||
