It was a year of two halves for Genus as the semen supplier grappled with the after-effects of global recession and a chronic over-supply of cows and pigs as farmers scrambled to take advantage of higher commodity prices in 2008-9. The situation has stabilised enough since the spring, with pig production returning to profitability, for operating profits to climb 42 per cent higher to £47m. However, the market has not fully returned to normal, especially for the US dairy industry.
Sales in North America were down an underlying 8 per cent to £103m, with profits flat at £32.2m. The US dairy market is still suffering from milk prices below the cost of production and while the herd has decreased, the yield per cow has gone up. Genus' mature markets in Europe did better, by contrast, with sales 1 per cent higher at £122m due to UK pig producers benefiting from a weaker sterling. Total bovine sales were 1 per cent higher at £146m, while porcine, due to low prices in China, was 4 per cent lower at £134m. Chief executive Richard Wood said the company's royalty payments from animals bred this year had substituted lost sales of semen.
KBC Peel Hunt upgraded its 2011 forecasts by 3 per cent on the back of these results to give pre-tax profits of £37m and EPS of 40.4p.
GENUS (GNS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 738p | MARKET VALUE: | £440m | |
| TOUCH: | 728-735p | 12-MONTH HIGH: | 785p | LOW: 566p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 420p* | NET DEBT: | 35% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 201 | 15.1 | 24.5 | 8.25 |
| 2007 | 234 | 19.9 | 23.1 | 9.10 |
| 2008 | 247 | 22.0 | 24.7 | 10.0 |
| 2009 | 280 | 26.2 | 30.4 | 11.0 |
| 2010 | 285 | 40.8 | 46.3 | 12.1 |
| % change | +2 | +56 | +52 | +10 |
Ex-div:8 Dec Payment:7 Jan *Includes intangible assets of £150m, or 251p a share | ||||
