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Share Name Share Symbol Market Type Share ISIN Share Description
Genus Plc LSE:GNS London Ordinary Share GB0002074580 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  40.00 0.76% 5,295.00 5,290.00 5,295.00 5,375.00 5,245.00 5,375.00 15,542 10:05:45
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 551.4 51.5 62.4 84.9 3,458

Genus PLC Interim Results

25/02/2021 7:00am

UK Regulatory (RNS & others)


Genus (LSE:GNS)
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From Feb 2021 to Apr 2021

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TIDMGNS

RNS Number : 2729Q

Genus PLC

25 February 2021

 
 Immediate   25 February 2021 
 

Genus plc

Unaudited half year results for the six months ended 31 December 2020

VERY STRONG PERFORMANCE and GOOD STRATEGIC PROGRESS

 
                                   Adjusted results ([1])         Statutory results 
                               ------------------------------- 
                                 Actual currency     Constant      Actual currency 
                                                      currency 
                                                       change 
                                                       ([2]) 
                                                     --------- 
Six months ended 31 December    2020   2019  Change               2020   2019  Change 
                               -----  -----  ------  ---------  ------  ----- 
                                GBPm   GBPm       %          %    GBPm   GBPm       % 
Revenue                        285.7  270.7       6         11   285.7  270.7       6 
Operating profit exc 
 JVs                            45.1   34.4      31         37    35.5   28.1      26 
Operating profit inc 
 JVs exc gene editing           54.7   43.7      25         35 
Profit before tax               48.4   36.6      32         44    38.7   30.4      27 
Free cash flow                  26.6   10.5     153  n/m ([3]) 
Basic earnings per share 
 (pence)                        57.3   43.5      32         44    48.4   36.5      33 
Dividend per share (pence)                                        10.3    9.4      10 
-----------------------------  -----  -----  ------  ---------  ------  -----  ------ 
 

Strong revenue growth of 6% in actual currency and 11% in constant currency(2)

-- Strong revenue growth of 8%(2) in PIC, our porcine genetics business; royalty revenue up 7%(2) , particularly high growth in Asia and Europe

-- Continued royalty growth and high breeding stock sales in China contributing to PIC volume growth 11% (up 7% excluding China)

-- Excellent revenue growth of 17%(2) in ABS, our bovine genetics business, particularly Brazil, Russia, India and China; continued success with Sexcel (R) and NuEra (R) beef genetics

   --    ABS volume growth of 19%, with sexed volumes up 42% and beef up 22% 

Record adjusted profit before tax ('PBT')(1) , up 44% in constant currency; statutory PBT at GBP38.7m

-- Adjusted operating profit including joint ventures and excluding gene editing cost(1) up 35%(2)

-- Double digit adjusted operating profit growth(1) in PIC (up 17%(2) ) and ABS (up 37%(2) ); R&D investment decreased 2%(2) with lower spend than planned due to COVID-19 short-term constraints

-- Statutory PBT increased 27% to GBP38.7m, impacted by a lower net IAS 41 biological asset valuation uplift offset by lower exceptional costs

Strong cash generation, earnings momentum and increased dividends

-- Record first half free cash inflow(1) of GBP26.6m, net debt(1) reduced to GBP92.2m, net debt to EBITDA(1) of 0.8x

-- Adjusted earnings per share(1) up 44%(2) ; interim dividend up 10% with 3.3x adjusted earnings cover ([4])

Good strategic progress

-- Continue to win new customers globally, with leading porcine and bovine genetics; contributing through genetic improvements to the reduction in use of energy, water and land in animal protein production

-- Beijing Capital Agribusiness Co. Ltd ('BCA') long-term collaboration in relation to PRRSv is progressing well, and first non-gene edited pigs shipped from US to stock BCA multiplication farms

   --    Continued shift in ABS's product mix with more than 20% of global sales volume now Sexcel (R) 

-- Significant capex spend is planned to support expansion of best in industry farm facilities for PIC and ABS

-- Sustainability a key focus through our 'Delta C' programme; climate targets set to reduce carbon emissions and become carbon neutral

Commenting on the interim results, Stephen Wilson, Chief Executive, said:

"Genus performed very strongly and made further good strategic progress in the first half of the 2021 fiscal year. The Group continued to show its resilience during the COVID-19 pandemic and I would like to thank our people who have shown great dedication to our customers whilst navigating the various challenges that the pandemic has caused.

"Both PIC and ABS grew adjusted operating profits in double digits, with China, Brazil, India and Russia, being notably high growth markets. PIC's expansion in China was significant, gaining share with large producers that have been re-stocking following the spread of African Swine Fever in 2019. PIC Europe's growth was also very strong reflecting success with key accounts, leveraging our genetics and supply chain.

"ABS's volume growth in the half was a record, driven by the continued success of Sexcel(R), and strong performance by our proprietary NuEra(R) beef business. Latin America, Europe and Asia all grew strongly, and ABS's adjusted operating margin improved through better product mix and operating leverage.

"In the second half of the 2021 fiscal year we expect that growth will be lower and there are increased currency headwinds. Nevertheless, Genus continues to have significant growth opportunities and the Board's expectations remain unchanged for the full year."

Results presentation today

A pre-recorded analysts and bankers briefing to discuss the interim results for the six months ended 31 December 2020 will be held via a video webcast facility and will be accessible via the following link from 7:01am today:

https://webcasting.buchanan.uk.com/broadcast/600ed56bea090471deaf6780

This will be followed by a live Q&A session to be held by invitation via Microsoft Teams at 10:30am.

Enquiries:

 
 Genus plc ( Stephen Wilson, Chief Executive Officer / Alison   Tel: 01256 345970 
  Henriksen, Chief Financial Officer) 
 Buchanan ( Charles Ryland / Chris Lane / Sophie Wills)         Tel: 0207 466 5000 
 

About Genus

Genus advances animal breeding and genetic improvement by applying biotechnology and sells added value products for livestock farming and food producers. Its technology is applicable across livestock species and is currently commercialised by Genus in the dairy, beef and pork food production sectors.

Genus's worldwide sales are made in over 80 countries under the trademarks 'ABS' (dairy and beef cattle) and 'PIC' (pigs) and comprise semen, embryos and breeding animals with superior genetics to those animals currently in farms. Genus's customers' animals produce offspring with greater production efficiency and quality, and our customers use them to supply the global dairy and meat supply chains.

Genus's competitive edge comes from the ownership and control of proprietary lines of breeding animals, the biotechnology used to improve them and its global supply chain, technical service and sales and distribution network.

Headquartered in Basingstoke, United Kingdom, Genus companies operate in over 25 countries on six continents, with research laboratories located in Madison, Wisconsin, USA.

Group Performance

Whilst there were some impacts from COVID-19 in the Group, the overall performance in the first half of the year was very strong, with revenue increasing by 6% (11% in constant currency), and adjusted profit before tax growing 32% (44% in constant currency), to a record GBP48.4m.

Revenue of GBP285.7m (2019: GBP270.7m) increased 6% in actual and 11% in constant currency during the period. PIC (8% growth) and ABS (17% growth) both contributed, with particularly strong trading across Brazil, Russia, India and China. Strategically important porcine royalty revenue was up 7% in constant currency and ABS's volume growth was a record high of 19% achieved through sexed genetics up 42%, and beef up 22%.

Adjusted operating profit, including joint ventures and excluding gene editing, was GBP54.7m (2019: GBP43.7m), up 25% (35% in constant currency). Adjusted operating profit, including joint ventures and after the costs of gene editing, increased 40% in constant currency. Adjusted operating margin, including joint ventures, expanded to 17.9% (2019: 14.6%). Within this, Genus's share of adjusted joint venture operating profits was GBP5.9m (2019: GBP5.3m), with a strong performance in the PIC Agroceres JV in Brazil. The impact to profit from COVID-19 effects on trading across the Group were largely offset by short term travel savings of approximately GBP5m. Net finance costs decreased to GBP2.6m (2019: GBP2.8m).

Adjusted profit before tax was up 32% (44% in constant currency), the highest growth rate in over 10 years. This reflected double digit growth in adjusted operating profit in both PIC and ABS. The ongoing impact of African Swine Fever ('ASF') in China led to very high pork prices continuing through the period, driving strong breeding stock sales, royalty income and farm margins for PIC.

The statutory profit before tax was GBP38.7m (2019: GBP30.4m), benefitting from a GBP3.5m non-cash increase (2019: GBP13.3m) in net IAS 41 biological asset fair value. Other adjusting items, including amortisation of acquired intangibles and share based payments, were slightly higher in aggregate period to period. Exceptional costs of GBP5.1m were GBP7.7m lower than the prior period which included damages and costs for the ongoing ST litigation. A non-cash Guaranteed Minimum Pension ('GMP') equalisation charge of GBP3.3m in respect of legacy pension schemes has been recognised due to a High Court ruling on 20 November 2020, which ruled individual transfer payments made by UK pension schemes since 17 May 1990 would need to be equalised for the effects of GMP.

The tax rate on adjusted profit before tax was 22.9% (2019: 23.0%) and continued to benefit from the increased proportion of the Group's profit arising in China, where there is agricultural tax relief on certain activities. The statutory profit after tax was GBP30.3m (2019: GBP24.1m).

The effect of exchange rate movements on the translation of Genus's overseas profits was an adverse impact of GBP3.7m compared with the prior period, primarily from stronger Sterling against the Brazilian Real, Mexican Peso and Russian Rouble.

Free cash inflow of GBP26.6m (2019: GBP10.5m inflow) reflected the strong trading and a continued focus on improving working capital management. Cash generated by operations of GBP45.0m (2019: GBP32.9m) represented 100% conversion (2019: 96%) of adjusted operating profit of GBP45.1m (2019: GBP34.4m) into cash. Capital expenditure of GBP11.9m (2019: GBP17.0m) included continuing investment in the ABS supply chain and the new GenusOne enterprise system. Overall capital investment was lower than the same period last year, due to IntelliGen capital expenditure for new production locations incurred last year.

Net debt decreased to GBP92.2m (2019: GBP107.2m) benefiting from the strong free cash inflow and favourable foreign currency movement on US dollar loans of GBP7.0m, offset by payment of GBP7.0m of deferred consideration on previous acquisitions. The net debt to EBITDA ratio of 0.8x (2019: 0.9x) as defined in the debt facility agreement reflects strong EBITDA growth and lower net debt levels.

As a result of Genus's strong earnings growth and cash flow generation, the Board has declared an interim dividend of 10.3 pence per share, an increase of 10% on last year's interim dividend, which is payable on 1 April 2021 to shareholders on the register at 5 March 2021.

Strategic Progress

Despite the challenges of COVID-19, Genus continued to successfully advance its strategy of creating value for farmers through delivering differentiated and sustainable proprietary genetic solutions that have been created through harnessing leading edge technologies, data and the talent of our people.

Our strategic investments in Genus's proprietary pork, dairy and beef breeding programs and leading sexing technology continued to benefit performance for both PIC and ABS. In PIC, demand for our superior genetics fuelled customer wins in all regions, and during the first half of the year PIC progressed its distribution contract with BCA in China with the delivery of the first non-gene-edited pigs from the USA as scheduled.

ABS now own over 50 of the top 100 Holstein bulls globally ($Net Merit Index), and its NuEra beef programme gained further traction with customers as US beef feedlot trials demonstrated significant per calf value creation compared with alternatives.

In addition to delivering today, Genus is focused on the long term. Notwithstanding the short-term decrease in R&D spending in the first half, growing R&D investment to support the development of new technologies for our customers remains a focus. We are continuously improving IntelliGen, our bovine sexing technology, and our potentially transformational porcine PRRSv-resistance programme is progressing as planned. We have also made important new hires in the fields of reproductive biology and scientific data, as we explore new ways to create value for our customers.

The implementation of GenusOne, the Group's new enterprise system, is progressing well. We have now completed the 'go-live' in both businesses in North America and have plans to complete the rollout to the rest of the world on schedule.

We are investing over GBP50m in capex during the next two years, to create new porcine nucleus farms in Canada and Russia and new and upgraded bull housing facilities in the US and UK. These investments will support the Group's objectives of accelerating genetic improvement, meeting the growing demand for our products, increase supply chain resilience and lead the industry in terms of animal welfare standards and sustainability.

Sustainability Focus

Our primary focus is the use of animal genetic improvement to drive the reduction in use of carbon/energy, water and land in animal protein production. The vision of Genus is 'Pioneering animal genetic improvement to help nourish the world' and as we look over time, we can see the clear impact improving genetics has on reducing greenhouse gasses ('GHGs') in protein production.

Additionally, w e have two climate targets focused on our internal operations that support international (Paris) climate goals: Genus will reduce its carbon emissions by 25% (per tonne animal weight from 2020 levels) by 2030 and become a carbon 'net zero' business by 2050. We have established a carbon reduction trajectory and contributory reduction opportunities as part of our 'Delta C' programme. We are targeting 'least cost mitigation' measures for emissions from manures. We have completed an initial assessment of the potential for 'conservation' management of soils on our estate and are developing plans to realize this opportunity. We are also targeting reductions in GHGs using, among other things, renewable energy, methane management and capture, and electric vehicles in our operations.

Outlook

Genus performed very strongly in the first half of the year, and we expect that the Group will remain resilient as the COVID-19 pandemic continues to impact society and the world economy and presents challenges for elements of the animal protein value chain. Although growth in the second half is anticipated to be lower than experienced in the first half and there are increased currency headwinds, the Board expects the company to perform in line with its expectations for the financial year 2021.

Genus PIC - Operating Review

 
                        Actual currency      Constant 
                                             currency 
                                               change 
                                            --------- 
Six months ended 31    2020   2019  Change 
 December 
                      -----  -----  ------  --------- 
                       GBPm   GBPm       %          % 
Revenue               152.9  146.5       4          8 
Adjusted operating 
 profit exc JV         63.0   57.3      10         14 
Adjusted operating 
 profit inc JV         68.9   62.6      10         17 
Adjusted operating 
 margin exc JV        41.2%  39.1%  2.1pts     2.3pts 
 

Market

COVID-19 and ASF caused significant volatility in global pork demand and supply in the period.

ASF continues to be a major influence on China's porcine industry. As expected, larger producers are rapidly growing capacity to rebuild China's pig herd. The Chinese herd recovered significantly in size through 2020, but ASF outbreaks continue. China's full recovery may take several years, keeping pig prices inflated and supporting higher pork imports than pre-ASF. While pig prices in China are down around 8% compared with a year ago and down 20% from their 24-month peak, they are around 150% higher than prices than pre-ASF. Pig prices are expected to moderate, but remain above historical levels, in the coming months in China, making market confidence and efficiency of producers even more important.

In the first nine months of 2020, EU pork exports were up more than 16%, with Chinese demand driving nearly all the growth. In September 2020, ASF was found in Germany and many trade partners, including China immediately banned German pork, affecting approximately 42% of German pork exports. Spanish exports to China have benefited but the ban decreased slaughter prices significantly across Europe, with producers incurring negative margins. Pressure on prices will continue into 2021, with lower consumption caused by COVID-19 also a factor. Labour shortages in slaughterhouses due to COVID-19 infections and new labour regulations have also caused backlogs of pigs and frozen pork in multiple EU countries. Sow inventory reductions have started, especially in North West Europe, supported by government buyout programmes to improve the environment, forthcoming animal welfare regulations and poor market conditions.

In the United States, COVID-19 brought unprecedented volatility to pork prices as slaughter pigs could not be slaughtered due to packing plant slowdowns. In 2021, production is forecast to be just 1% higher, with flat exports as less demand for exports to China are offset by increased demand from Japan and Mexico. While recent increases in corn and soybean prices are expected to have some impact on farmers' profits, buoyant lean hog futures point to profitable margins for producers in 2021.

In South America, Brazil had a record year for pork production helped by exports to China rising 36%. Brazilian pork production in 2021 is projected to increase 2.5% over 2020 levels on the back of recovering local demand and an increased share of China's lower import requirements.

Performance

PIC's adjusted operating profit including joint ventures was GBP68.9m for the period, up 17% in constant currency, driven by very strong growth in most countries and especially China, Russia and Brazil. Volumes were up 11%, with all regions contributing and the highest growth was experienced in Asia and Europe. Total revenue increased by 8% in constant currency and strategically important porcine royalty revenue was up 7% in constant currency.

In North America, as expected COVID-19 continued to cause market volatility, packing plant slowdowns and reductions in customer breeding stock investments and pig numbers. Adjusted operating profit was down 6% and revenue was down 3% reflecting a 4% decline in royalty revenue. However, there was continued strong demand for the Camborough sow and Duroc PIC 800 sire from both new and existing customers, providing royalty growth opportunity for future periods.

Latin American adjusted operating profit grew by 13% in constant currency, with most countries contributing. Volumes were up 4% and royalty revenue were up 9% in constant currency. The buoyant market in Brazil, supported by strong exports to China, drove PIC Brazil adjusted operating profit growth of 30%. Higher royalties in Chile also contributed to growth in the period.

Adjusted operating profit in Europe rose by 42% and revenue was up by 10%. Royalty revenue was up 15%, with nearly all countries achieving growth. Expansion projects in Russia continued, nearly doubling profits, and PIC's partnerships with Hermitage Genetics and Møllevang continue to add value in the region and globally, through the wider portfolio of genetics, distribution and supply.

Asia's adjusted operating profit grew by 56%. The continued strength in pig prices contributed to exceptional profits across the pork industry in China, leading to PIC's continued growth in customer breeding projects, higher royalties and improved farm margins. PIC continued to invest in operations across Asia, and expanded its customer base in China, meaning it is now serving around one third of the top 50 producers. However, the Philippines continued to be adversely affected by a combination of COVID-19 and ASF.

Genus ABS - Operating Review

 
                        Actual currency      Constant 
                                             currency 
                                               change 
                                            --------- 
Six months ended 31    2020   2019  Change 
 December 
                      -----  -----  ------  --------- 
                       GBPm   GBPm       %          % 
Revenue               129.0  118.0       9         17 
Adjusted operating 
 profit                18.7   14.6      28         37 
Adjusted operating 
 margin               14.5%  12.4%  2.1pts     2.1pts 
 

Market

In the second half of 2020, consistent demand from retail and food services resulted in milk prices remaining stable. China and other Asian markets played an important role supporting these prices, with demand increasing compared with 2019. Some markets, such as Brazil, saw record milk prices, underpinned by local government initiatives aimed at countering the COVID-19 pandemic.

Much of the demand in China and Asia was met by increased imports from the US and New Zealand. In 2020, total milk exports worldwide grew at the fastest rate for three years, showing the resilience of dairy producers despite the COVID-19 pandemic. The second half of the year saw the major exporting nations achieve export growth of over 2 billion litres of milk against the same period in 2019. In the US, this was the result of an increase in the national herd size compared with the first half of 2020. The UK saw improved performance per cow, although the national herd decreased. China's increasing demand for feed, particularly for its recovering pork industry, continued to drive up global feed prices in the latter part of 2020. This is likely to continue into early 2021 applying pressure to dairy producer margins.

The COVID-19 pandemic affected beef consumption trends during 2020 and, in many markets, the switch from dining out to home eating stabilised overall demand in the second half of the year. Demand for beef in China also remained at the higher level it reached during the ASF pandemic, despite pork producers restocking. This contributed to beef prices throughout the period being higher than the prior year in Brazil, Australia and China, with demand outweighing supply. In Europe, beef prices were down moderately in the second half of 2020, underpinned by a constrained recovery in demand as COVID-19 restrictions remained greater than in other global markets. Uncertainty in the U.S. also saw prices fall by 5% in 2020 when compared to 2019, although prices stabilised in the second half of the year.

In the bovine genetics marketplace, the significant investment required to run competitive breeding programmes saw a number of trading partnerships develop, particularly between European co-operatives during this period. This trend is likely to continue as a smaller number of growing dairy and beef producers want to partner with world class leading genetics companies to help them grow sustainable protein production.

Performance

Globally, COVID-19 created dynamic and challenging market conditions for our customers but overall demand for ABS's products was resilient. This was helped by the salesforce's focus on obtaining 100% of customers' business and the introduction of new partnership-based contract structures.

ABS's adjusted operating profit increased by 37%, with volumes up 19% and revenue up 17% in constant currency, as dairy customers continued the shift from conventional to sexed and beef genetics. Sexed volumes grew by 42%, reflecting Sexcel's continued success. Increased use of NuEra beef genetics in dairy herds, and customer growth in the traditional beef segment supported a 22% increase in global beef volumes.

Europe achieved volume growth of 10% and revenue growth of 12%, with adjusted operating profit up 28% against the prior year in constant currency. The business made strategic progress with key accounts in Russia and saw strong growth in other distributor markets. However, conditions in the UK and Italy were particularly challenging as COVID-19 lockdowns reduced salesforce mobility and customer access, and dairy producers limited their herd growth. Sexed semen volumes rose by 43%, with the UK, Ireland and the European distributor business achieving the strongest growth. The trend of dairy customers using sexed genetics, coupled with beef genetics for a portion of the herd, led to beef volumes increasing by 4%. During the period, a new IntelliGen production facility was opened in Europe, our fourth external customer site globally.

In North America, revenue grew by 3% and adjusted operating profit increased by 5% in constant currency. Our ability to leverage our strategic investments in key account management was limited, as COVID-19 travel restrictions prevented face to face customer interactions. Overall volumes were 1% lower, as dairy producers rationalised genetic inventory on farm in response to the uncertain market conditions. Volumes of beef genetics into dairy animals rose 25%, supported by proprietary NuEra genetics selected for cross-bred beef-on-dairy performance, but there was limited growth in sexed volumes of 2% and customers also used less conventional product. Embryo volumes increased by 8%.

In Latin America, revenue grew by 35% and adjusted operating profit increased by 68% in constant currency, with Brazil particularly strong. The Brazil beef market was strong, and the team achieved good success through innovative digital sales campaigns, while maintaining robust pricing policies. Volumes in Latin America overall increased by 19%, with sexed volumes up 48% and beef volumes up 31%, utilising NuEra genetics, selected for cross-bred performance of North American sires with tropical cows. Embryo volumes increased by 35%.

In Asia, adjusted operating profit was up 116% and volumes by 52%, with trading activity increasing in China following a period of vertical integration among customers, as dairy processors acquired farms. Australia rebounded strongly from last year's turbulent drought and bushfire conditions. Sexed volumes were up 142%, with strong Sexcel sales in China and the business seeing the benefits of IntelliGen production at the State of Uttar Pradesh facility in India, which started operation earlier in 2020.

Research and Development - Operating Review

 
                                Actual currency     Constant 
                                                    currency 
                                                      change 
                                                   --------- 
Six months ended 31            2020  2019  Change 
 December 
                              -----  ----  ------  --------- 
                               GBPm  GBPm       %          % 
Porcine product development    10.3  12.0    (14)       (11) 
Bovine product development      9.3   9.7     (4)          1 
Gene editing                    3.7   4.3    (14)       (12) 
Other research and 
 development                    5.7   4.8      19         23 
Net expenditure in 
 R&D ([5])                     29.0  30.8     (6)        (2) 
 

Performance

Net research and development investment decreased by 2% in constant currency, primarily due to the large investments in the prior period to expand the porcine elite nucleus populations. External research collaboration spend was also lower due to timing caused by COVID-19 constraints, and the Group benefited from efficiencies in gene editing capability, from internalising gene edited animal production. Genus continued to strengthen its proprietary differentiated offerings and to invest in key strategic initiatives, including gene editing, IntelliGen production capacity and porcine elite farm nucleuses, as well as further developing its research and development pipeline.

Porcine product development continued to deliver high rates of genetic improvement, driven by the combination of our expanded genetic production, implementing the best science and capturing accurate and meaningful data. Our ongoing improvement initiatives were focused on further refining our genomic evaluation, exploring digital tools for automated capture of new and novel traits, and continued integration of Møllevang genetics. The decrease in porcine product development expenditure was primarily related to start-up costs on projects in 2019 to expand capacity in Genus PIC's elite farms.

Bovine product development continued to generate an industry leading Holstein dairy bull portfolio, which supported strong volume growth in ABS. The De Novo joint venture continued to produce more than 50% of these animals and the strong pipeline of young bulls will help sustain our leadership position. Global demand for NuEra Genetics continued to grow and represented more than 20% of total beef volumes produced. Recent validation trials in customer systems have demonstrated NuEra's significant superiority to competitor genetics. In addition, we continue to invest in IntelliGen while amortising previously capitalised development costs. We expect to expand our production capacity further to meet increasing demand for sexed semen.

Gene editing expenditure decreased by 12% in the period, as work with Caribou completed and we internalised our capability for producing gene edited animals as planned. The PRRSv programme is progressing as planned, and we maintained our engagement with the US Food and Drug Administration, with whom we have a constructive and positive relationship. Directly and with local partners, we also initiated conversations on regulatory and market acceptance in key global markets including China and Japan.

Other research and development expenditure increased by 23%. This included initiating work on reproductive biology and data science objectives, and continuing efforts in our bioinformatics platform and genome science. External collaborations in a variety of discovery areas also continued, though at slower pace due to institutions prioritising COVID-19 research and vaccines.

Principal risks and uncertainties

Genus's approach to risk management is to identify, evaluate and prioritise risks and uncertainties and actively manage actions to mitigate them. The Genus plc Annual Report 2020 (a copy of which is available on the Genus plc website at www.genusplc.com) sets out on pages 44-46 a number of risks and uncertainties that might impact the performance of the Group.

Some of these risks relate to the current business operations in our global agricultural markets, while others relate to future commercial exploitation of our leading-edge R&D programmes. We are also exposed to global economic and political risks such as trade restrictions. Additionally, we also monitor emerging new risks such as changing consumption patterns, environmental sustainability and the emergence of alternative proteins such as lab-based meat.

There has been no material change to the principal risks in the current financial year that might affect the performance of the Group.

GENUS PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 31 December 2020

 
                                                                      Six months    Six months      Year 
                                                                           ended         ended     ended 
                                                                     31 December   31 December   30 June 
                                                             Notes          2020          2019      2020 
                                                                            GBPm          GBPm      GBPm 
REVENUE                                                          4         285.7         270.7     551.4 
 
Adjusted operating profit                                        4          45.1          34.4      65.3 
 
 Adjusting items: 
  *    Net IAS 41 valuation movement on biological assets       10           3.5          13.3      15.8 
 
   *    Amortisation of acquired intangible assets               9         (3.7)         (4.0)     (8.5) 
 
   *    Share-based payment expense                                        (4.3)         (2.8)     (5.8) 
                                                                    ------------  ------------  -------- 
                                                                           (4.5)           6.5       1.5 
 - Exceptional items:                                            5 
      - Litigation                                                         (1.7)        (12.0)    (16.4) 
      - Pension related                                                    (3.3)             -         - 
      - Acquisition and integration                                        (0.1)         (0.5)     (2.1) 
      - Other                                                                  -         (0.3)     (0.7) 
Total exceptional items                                                    (5.1)        (12.8)    (19.2) 
 
Total adjusting items                                                      (9.6)         (6.3)    (17.7) 
 
OPERATING PROFIT                                                            35.5          28.1      47.6 
Share of post-tax profit of joint 
 ventures and associates retained                               12           5.8           5.1       8.9 
Finance costs                                                    6         (2.8)         (2.9)     (5.3) 
Finance income                                                   6           0.2           0.1       0.3 
                                                                    ------------  ------------  -------- 
PROFIT BEFORE TAX                                                           38.7          30.4      51.5 
Taxation                                                         7         (8.4)         (6.3)    (10.6) 
                                                                    ------------  ------------  -------- 
PROFIT FOR THE PERIOD                                                       30.3          24.1      40.9 
                                                                    ============  ============  ======== 
 
ATTRIBUTABLE TO: 
Owners of the Company                                                       31.5          23.7      40.5 
Non-controlling interest                                                   (1.2)           0.4       0.4 
                                                                    ------------  ------------  -------- 
                                                                            30.3          24.1      40.9 
                                                                    ============  ============  ======== 
EARNINGS PER SHARE                                              14 
Basic earnings per share                                                   48.4p         36.5p     62.4p 
Diluted earnings per share                                                 48.0p         36.3p     61.9p 
 
Alternative Performance Measures 
Adjusted operating profit                                                   45.1          34.4      65.3 
Adjusted operating profit attributable 
 to non-controlling interest                                                   -         (0.3)     (0.6) 
Pre-tax share of profits from joint 
 ventures and associates excluding 
 net IAS 41 valuation movement                                               5.9           5.3      11.3 
Gene editing costs                                                           3.7           4.3       5.2 
                                                                    ------------  ------------  -------- 
Adjusted operating profit including 
 joint ventures and associates, excluding 
 gene editing costs                                                         54.7          43.7      81.2 
Gene editing costs                                                         (3.7)         (4.3)     (5.2) 
Adjusted operating profit including 
 joint ventures and associates                                          51.0              39.4      76.0 
Net finance costs                                                6         (2.6)         (2.8)     (5.0) 
                                                                    ------------  ------------  -------- 
Adjusted profit before tax                                                  48.4          36.6      71.0 
 
Adjusted earnings per share                                     14 
Basic adjusted earnings per share                                          57.3p         43.5p     85.4p 
Diluted adjusted earnings per share                                        56.9p         43.2p     84.7p 
 
 

Adjusted results are the Alternative Performance Measures ('APMs') used by the Board to monitor underlying performance at a Group and operating segment level, which are applied consistently throughout. These APMs should be considered in addition to statutory measures, and not as a substitute for or as superior to them. For more information on APMs, see APM Glossary.

GENUS PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31 December 2020

 
                                          Six months ended      Six months        Year ended 
                                             31 December           ended          30 June 2020 
                                                2020            31 December 
                                                                    2019 
                                             GBPm      GBPm     GBPm     GBPm      GBPm    GBPm 
 
 PROFIT FOR THE PERIOD                                 30.3              24.1              40.9 
 
 Items that may be reclassified 
  subsequently to profit 
  or loss 
 Foreign exchange translation 
  differences                              (39.4)             (24.1)              (4.9) 
 Fair value movement on 
  net investment hedges                         -                0.6              (0.1) 
 Fair value movement on 
  cash flow hedges                            0.1              (0.2)              (0.4) 
 Tax relating to components 
  of other comprehensive 
  income                                      6.2                3.2              (1.4) 
 
                                                     (33.1)            (20.5)             (6.8) 
                                                   --------           -------            ------ 
 
 Items that may not be 
  reclassified subsequently 
  to profit or loss 
 Actuarial gain/(loss) 
  on retirement benefit 
  obligations                                 0.2             (26.7)             (16.6) 
 Movement on pension asset 
  recognition restriction                     0.6               13.6               10.4 
 Release of additional 
  pension liability                           1.8               13.2                4.7 
 Tax relating to components 
  of other comprehensive 
  income                                    (0.5)                  -                0.8 
 
 
                                                        2.1               0.1             (0.7) 
                                                   --------           -------            ------ 
 
 Other comprehensive expense 
  for the period                                     (31.0)            (20.4)             (7.5) 
                                                   --------           -------            ------ 
 
 
 TOTAL COMPREHENSIVE (EXPENSE)/INCOME 
  FOR THE PERIOD                                      (0.7)               3.7              33.4 
                                                   ========           =======            ====== 
 
 ATTRIBUTABLE TO: 
 
 Owners of the Company                                  0.4               3.5              33.1 
 Non-controlling interest                             (1.1)               0.2               0.3 
                                                   --------           -------            ------ 
 
                                                      (0.7)               3.7              33.4 
                                                   ========           =======            ====== 
 
 

GENUS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 December 2020

 
                                  Called 
                                      up    Share                                                            Non- 
                                   share  premium     Own  Trans-lation  Hedging  Retained            controlling     Total 
                                 capital  account  shares       reserve  reserve  earnings     Total     interest    equity 
                           Note     GBPm     GBPm    GBPm          GBPm     GBPm      GBPm      GBPm         GBPm      GBPm 
 
 BALANCE AT 30 JUNE 
  2019 (restated*)                   6.5    179.0   (0.1)          35.8      0.2     267.0     488.4        (1.3)     487.1 
 
  Foreign exchange 
   translation 
   differences, net 
   of tax                              -        -       -         (6.4)        -         -     (6.4)        (0.1)     (6.5) 
  Fair value movement 
   on net 
   investment hedges, 
   net of tax                          -        -       -           0.1        -         -       0.1            -       0.1 
  Fair value movement 
   on cash flow hedges, 
   net of tax                          -        -       -             -    (0.4)         -     (0.4)            -     (0.4) 
  Actuarial loss on 
   retirement 
   benefit obligations, 
   net of tax                          -        -       -             -        -    (10.4)    (10.4)            -    (10.4) 
  Movement on pension 
   asset recognition 
   restriction, net 
   of tax                              -        -       -             -        -       6.8       6.8            -       6.8 
  Release of additional 
   pension liability, 
   net of tax                          -        -       -             -        -       2.9       2.9            -       2.9 
 
  Other comprehensive 
   expense for the 
   year                                -        -       -         (6.3)    (0.4)     (0.7)     (7.4)        (0.1)     (7.5) 
           Profit for the 
            year                       -        -       -             -        -      40.5      40.5          0.4      40.9 
 
  Total comprehensive 
   (expense)/income 
   for the year                        -        -       -         (6.3)    (0.4)      39.8      33.1          0.3      33.4 
  Recognition of 
   share-based 
   payments, net of 
   tax                                 -        -       -             -        -       5.5       5.5            -       5.5 
  Dividends                   8        -        -       -             -        -    (18.3)    (18.3)            -    (18.3) 
  Issue of ordinary 
   shares                              -      0.1       -             -        -         -       0.1            -       0.1 
 
 BALANCE AT 30 JUNE 
  2020                               6.5    179.1   (0.1)          29.5    (0.2)     294.0     508.8        (1.0)     507.8 
 
  Foreign exchange 
   translation 
   differences, net 
   of tax                              -        -       -        (33.3)        -         -    (33.3)          0.1    (33.2) 
  Fair value movement 
   on net                              -        -       -             -        -         -         -            -         - 
   investment hedges, 
   net of tax 
  Fair value movement 
   on cash flow hedges, 
   net of tax                          -        -       -             -      0.1         -       0.1            -       0.1 
  Actuarial gain on 
   retirement 
   benefit obligations, 
   net of tax                          -        -       -             -        -       0.2       0.2            -       0.2 
  Movement on pension 
   asset recognition 
   restriction, net 
   of tax                              -        -       -             -        -       0.5       0.5            -       0.5 
  Release of additional 
   pension liability, 
   net of tax                          -        -       -             -        -       1.4       1.4            -       1.4 
 
  Other comprehensive 
   (expense)/income 
   for the period                      -        -       -        (33.3)      0.1       2.1    (31.1)          0.1    (31.0) 
           Profit/(loss) 
            for 
            the period                 -        -       -             -        -      31.5      31.5        (1.2)      30.3 
 
  Total comprehensive 
   (expense)/income 
   for the period                      -        -       -        (33.3)      0.1      33.6       0.4        (1.1)     (0.7) 
  Recognition of 
   share-based 
   payments, net of 
   tax                                 -        -       -             -        -       4.0       4.0            -       4.0 
  Adjustment arising 
   from changes in 
   non-controlling 
   interest                            -        -       -             -        -         -         -        (0.2)     (0.2) 
  Dividends                   8        -        -       -             -        -    (12.8)    (12.8)            -    (12.8) 
           . 
                                 -------  -------  ------  ------------  -------  --------  --------  -----------  -------- 
 BALANCE AT 31 DECEMBER 
  2020                               6.5    179.1   (0.1)         (3.8)    (0.1)     318.8     500.4        (2.3)     498.1 
 
 
 
                            Called 
                                up    Share                                                            Non- 
                             share  premium     Own  Trans-lation  Hedging  Retained            controlling     Total 
                           capital  account  shares       reserve  reserve  earnings     Total     interest    equity 
                     Note     GBPm     GBPm    GBPm          GBPm     GBPm      GBPm      GBPm         GBPm      GBPm 
 
 BALANCE AT 30 JUNE 
  2019 (restated*)             6.5    179.0   (0.1)          35.8      0.2     267.0     488.4        (1.3)     487.1 
 
  Foreign exchange 
   translation 
   differences, net 
   of tax                        -        -       -        (20.6)        -         -    (20.6)        (0.2)    (20.8) 
  Fair value 
   movement 
   on net 
   investment 
   hedges, 
   net of tax                    -        -       -           0.5        -         -       0.5            -       0.5 
  Fair value 
   movement 
   on cash flow 
   hedges, 
   net of tax                    -        -       -             -    (0.2)         -     (0.2)            -     (0.2) 
  Actuarial loss on 
   retirement 
   benefit 
   obligations, 
   net of tax                    -        -       -             -        -    (22.1)    (22.1)            -    (22.1) 
  Movement on 
   pension 
   asset 
   recognition 
   restriction, net 
   of tax                        -        -       -             -        -      11.3      11.3            -      11.3 
  Release of 
   additional 
   pension 
   liability, 
   net of tax                    -        -       -             -        -      10.9      10.9            -      10.9 
 
  Other 
   comprehensive 
   (expense)/income 
   for the period                -        -       -        (20.1)    (0.2)       0.1    (20.2)        (0.2)    (20.4) 
           Profit 
            for the 
            period               -        -       -             -        -      23.7      23.7          0.4      24.1 
 
  Total 
   comprehensive 
   (expense)/income 
   for the period                -        -       -        (20.1)    (0.2)      23.8       3.5          0.2       3.7 
  Recognition of 
   share-based 
   payments, net of 
   tax                           -        -       -             -        -       1.3       1.3            -       1.3 
  Dividends             8        -        -       -             -        -    (12.2)    (12.2)            -    (12.2) 
 
 BALANCE AT 31 
  DECEMBER 
  2019 (restated*)             6.5    179.0   (0.1)          15.7        -     279.9     481.0        (1.1)     479.9 
 
 
 
 

*see note 1 for details of the prior period restatement

GENUS PLC

CONDENSED CONSOLIDATED BALANCE SHEET

As at 31 December 2020

 
                                      Notes                        (restated*) 
                                               31 December         31 December         30 June 
                                                      2020                2019            2020 
                                                      GBPm                GBPm            GBPm 
 Assets 
   Goodwill                                           99.4               101.5           105.6 
   Other intangible assets              9             68.7                77.1            76.2 
   Biological assets                   10            294.2               287.1           310.1 
   Property, plant and equipment       11            110.0               107.8           117.9 
   Interests in joint ventures 
    and associates                     12             28.4                24.4            22.7 
   Other investments                                   6.8                 6.7             6.9 
   Other receivables                                   2.0                   -             1.8 
   Deferred tax assets                                 3.3                 2.7             3.7 
 
 Total non-current assets                            612.8               607.3           644.9 
 
  Inventories                                         35.0                33.7            37.4 
  Biological assets                    10             38.2                46.1            39.8 
  Trade and other receivables                        101.5                96.8           100.8 
  Cash and cash equivalents                           50.2                31.1            41.3 
  Income tax receivable                                2.9                 3.0             3.1 
  Derivative financial asset           17              0.9                 0.3             1.2 
  Asset held for sale                                  0.2                 0.2             0.2 
 
 Total current assets                                228.9               211.2           223.8 
                                             -------------       -------------       --------- 
 Total assets                                        841.7               818.5           868.7 
 Liabilities 
  Trade and other payables                          (92.5)              (86.7)          (95.0) 
  Interest-bearing loans and 
   borrowings                                        (9.8)               (8.7)           (9.2) 
  Provisions                           18            (3.7)              (10.0)           (4.0) 
  Deferred consideration               19            (1.0)               (0.4)           (7.5) 
  Obligations under leases                           (9.0)               (7.5)          (10.0) 
  Current tax liabilities                            (6.5)               (2.9)           (4.0) 
  Derivative financial liabilities     17            (0.4)               (0.5)           (0.5) 
                                             -------------       -------------       --------- 
 Total current liabilities                         (122.9)             (116.7)         (130.2) 
                                             -------------       -------------       --------- 
 

*see note 1 for details of the prior period restatement

 
                                                           (restated*) 
                                             31 December   31 December  30 June 
                                      Notes         2020          2019     2020 
                                                    GBPm          GBPm     GBPm 
 
  Trade and other payables                         (4.8)             -    (3.3) 
  Interest-bearing loans and 
   borrowings                                    (105.0)       (100.4)  (103.6) 
  Retirement benefit obligations       16         (15.0)        (20.5)   (18.1) 
  Provisions                           18         (10.9)         (4.9)   (11.8) 
  Deferred consideration               19          (0.4)         (4.3)    (1.2) 
  Deferred tax liabilities                        (60.1)        (64.6)   (65.5) 
  Derivative financial liabilities     17          (5.9)         (5.5)    (6.1) 
  Obligations under leases                        (18.6)        (21.7)   (21.1) 
 
Total non-current liabilities                    (220.7)       (221.9)  (230.7) 
 
Total liabilities                                (343.6)       (338.6)  (360.9) 
 
Net assets                                         498.1         479.9    507.8 
 
Equity 
   Called up share capital                           6.5           6.5      6.5 
   Share premium account                           179.1         179.0    179.1 
   Own shares                                      (0.1)         (0.1)    (0.1) 
   Translation reserve                             (3.8)          15.7     29.5 
   Hedging reserve                                 (0.1)             -    (0.2) 
   Retained earnings                               318.8         279.9    294.0 
 
Equity attributable to owners 
 of the Company                                    500.4         481.0    508.8 
 
   Non-controlling interest                          2.8           4.4      4.6 
   Put option over non-controlling 
    interest                                       (5.1)         (5.5)    (5.6) 
 
Total non-controlling interest                     (2.3)         (1.1)    (1.0) 
 
Total equity                                       498.1         479.9    507.8 
 
 

*see note 1 for details of the prior period restatement

GENUS PLC

GROUP STATEMENT OF CASH FLOWS

For the six months ended 31 December 2020

 
                                                      Six months    Six months      Year 
                                                           ended         ended     ended 
                                                     31 December   31 December   30 June 
                                             Notes          2020          2019      2020 
                                                            GBPm          GBPm      GBPm 
 
Net cash flow from operating activities       15            38.1          24.1      65.8 
 
 
Cash flows from investing activities 
Dividends received from joint ventures 
 and associates                                                -           0.2       2.5 
Joint venture loan repayment                                   -           1.2       1.2 
Investment in joint venture                                (0.4)         (2.2)     (2.2) 
Disposal of joint venture                                      -           3.8       3.8 
Deferred consideration paid                                (6.6)         (1.3)     (1.7) 
Purchase of owned property, plant 
 and equipment                                             (9.5)        (11.1)    (24.6) 
Purchase of intangible assets                              (2.4)         (5.9)    (10.8) 
Proceeds from sale of owned property, 
 plant and equipment                                         0.6           2.0       1.1 
 
Net cash outflow from investing activities                (18.3)        (13.3)    (30.7) 
 
 
Cash flows from financing activities 
Drawdown of borrowings                                     148.3          54.5      80.0 
Repayment of borrowings                                  (138.0)        (46.0)    (73.8) 
Payment of lease liabilities                               (5.0)         (5.1)    (11.1) 
Equity dividends paid                                     (12.8)        (12.2)    (18.3) 
Dividend to non-controlling interest                       (0.2)             -         - 
Debt issue costs                                           (1.9)             -         - 
Issue of ordinary shares                                       -             -       0.1 
 
Net cash outflow from financing activities                 (9.6)         (8.8)    (23.1) 
 
 
Net increase in cash and cash equivalents                   10.2           2.0      12.0 
 
 
 
Cash and cash equivalents at beginning 
 of period                                                  41.3          30.5      30.5 
Net increase in cash and cash equivalents                   10.2           2.0      12.0 
Effect of exchange rate fluctuations 
 on cash and cash equivalents                              (1.3)         (1.4)     (1.2) 
 
Total cash and cash equivalents at 
 end of period                                              50.2          31.1      41.3 
 
 

GENUS PLC

ANALYSIS OF NET DEBT

For the six months ended 31 December 2020

 
                                           At      Net                               At 31 
                                       1 July     cash     Foreign    Non-cash    December 
                                         2020    flows    exchange    movement        2020 
                                         GBPm     GBPm        GBPm        GBPm        GBPm 
 
 Cash and cash equivalents               41.3     10.2       (1.3)           -        50.2 
                                     --------  -------  ----------  ----------  ---------- 
 
 Interest-bearing loans 
  - current                             (9.2)    (0.7)         0.6       (0.5)       (9.8) 
 Lease liabilities -current            (10.0)      5.0         0.5       (4.5)       (9.0) 
                                     --------  -------  ----------  ----------  ---------- 
 
                                       (19.2)      4.3         1.1       (5.0)      (18.8) 
                                     --------  -------  ----------  ----------  ---------- 
 
 Interest-bearing loans 
  non-current                         (103.6)    (7.7)         6.3           -     (105.0) 
 Lease liabilities - non-current       (21.1)        -         1.0         1.5      (18.6) 
                                     --------  -------  ----------  ----------  ---------- 
                                      (124.7)    (7.7)         7.3         1.5     (123.6) 
                                     --------  -------  ----------  ----------  ---------- 
 
 Total debt financing                 (143.9)    (3.4)         8.4       (3.5)     (142.4) 
 
 Net debt                             (102.6)      6.8         7.1       (3.5)      (92.2) 
                                     ========  =======  ==========  ==========  ========== 
 
 
                                    At                                At 
                                1 July        Adoption            1 July 
                                               of IFRS 
                                  2019              16              2019            Net 
                                                                                                                                   At 31 
                                                                   (post           cash         Foreign        Non-cash         December 
                            (reported)          leases         adoption)          flows        exchange        movement             2019 
                                  GBPm            GBPm              GBPm           GBPm            GBPm            GBPm             GBPm 
 Cash and 
  cash equivalents                30.5               -              30.5            2.0           (1.4)               -             31.1 
                          ------------       ---------       -----------       --------       ---------       ---------       ---------- 
 
 Interest-bearing 
  loans - 
  current                        (2.1)               -             (2.1)          (6.7)             0.3           (0.2)            (8.7) 
 Lease liabilities 
  -current                       (2.2)           (7.5)             (9.7)            5.1             0.1           (3.0)            (7.5) 
                          ------------       ---------       -----------       --------       ---------       ---------       ---------- 
                                 (4.3)           (7.5)            (11.8)          (1.6)             0.4           (3.2)           (16.2) 
                          ------------       ---------       -----------       --------       ---------       ---------       ---------- 
 
 Interest-bearing 
  loans non-current            (101.9)               -           (101.9)          (1.8)             3.3               -          (100.4) 
 Lease liabilities 
  - non-current                  (3.9)          (19.1)            (23.0)              -             1.1             0.2           (21.7) 
                          ------------       ---------       -----------       --------       ---------       ---------       ---------- 
                               (105.8)          (19.1)           (124.9)          (1.8)             4.4             0.2          (122.1) 
 
 Total debt 
  financing                    (110.1)          (26.6)           (136.7)          (3.4)             4.8           (3.0)          (138.3) 
 
 Net debt                       (79.6)          (26.6)           (106.2)          (1.4)             3.4           (3.0)          (107.2) 
                          ============       =========       ===========       ========       =========       =========       ========== 
 

Net debt is defined as the total of cash and cash equivalents, interest-bearing loans, unamortised debt issue costs and lease obligations.

GENUS PLC

NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS

For the six months ended 31 December 2020

   1.         Basis of preparation 

The unaudited Condensed Set of Financial Statements for the six months ended 31 December 2020:

-- were prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34') and thereby have been prepared in conformity with the requirements of the Companies Act 2006 and the International Financial Reporting Standards ('IFRSs') adopted pursuant to the Regulation (EC) No 1606/2002 as it applies in the European Union;

-- are presented on a condensed basis as permitted by IAS 34 and therefore do not include all disclosures that would otherwise be required in a full set of financial statements; these should be read, therefore, in conjunction with the Genus plc Annual Report 2020;

-- includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented;

-- do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006; and

   --    were approved by the Board of Directors on 24 February 2021. 

The information relating to the year ended 30 June 2020 is an extract from the published financial statements for that year, which have been delivered to the Registrar of Companies. The auditor's report on those financial statements was not qualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The unaudited Condensed Set of Financial Statements for the six months ended 31 December 2020 has not been reviewed by our Auditor.

The unaudited condensed set of financial statements have been prepared on the basis of the accounting policies set out in the Annual Report 2020. The Genus plc Annual Report 2020 (a copy of which is available on the Genus plc website at www.genusplc.com ) sets out on pages 44-46 a number of risks and uncertainties that might impact upon the performance of the Group. There has been no material change to the principal risks that might affect the performance of the Group in the current financial year.

As part of the directors' consideration of the appropriateness of adopting the going concern basis in preparing the financial statements, they have considered

-- these risks and uncertainties including uncertainty arising from Covid-19 and its impact on our people, our customers and our critical business processes, taking into account the resilient performance of the Group to date in dealing with the challenges of Covid-19;

-- Genus's results to 31 December 2020 including it's strong cash position with free cash flow of GBP26.6m (2019: GBP10.5m) and net debt of GBP92.2m (2019: GBP107.2m) and had substantial headroom of GBP135.8m (2019: GBP125.6m) under the Group's credit facilities of GBP241m; and

-- Genus's new credit facility agreement which consists of a GBP150m multi-currency RCF, a 125m US dollar RCF and a 20m US dollar bond and guarantee facility. The term of the new facility is for three years with an option to extend the maturity date before the first and second anniversaries of the signing date for a further year. The facility also includes an uncommitted GBP100m accordion option which can be requested on a maximum of three occasions over the lifetime of the facility to fund the Group's business development plans.

Based on this assessment, the Directors have a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future and for a period of at least 12 months from the date of this report. Accordingly, the Directors continue to adopt and consider appropriate the going concern basis in preparing the half-yearly report and the Condensed Set of Financial Statements.

The preparation of the Condensed Set of Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenue and expenses during the period. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

For the year ended 30 June 2020, we restated the prior period balances sheets in accordance with IAS 8 and in accordance with IAS 1 (revised), to update an input used in the valuation of our porcine biological assets that was not in line with operational data, reducing the biological asset value by GBP20.5m and related deferred tax balances of GBP5.3m. We have therefore also reclassified the comparative period to 31 December 2019 to reflect these previously reported changes, so to be consistent with the 2020 Annual Report. For the six months ended 31 December 2019, there has been no material effect on the Group Income Statement, Group Statement of Comprehensive Income and no impact on the Group Statement of Cash Flows. Therefore, there has been no restatement of the Group Income Statement and there is no adjustment to earnings per share.

   2.         Accounting policies and non-GAAP measures 

New standards and interpretations

In the current period, the Group has applied a number of amendments to IFRSs issued by the International Accounting Standards Board that are mandatorily effective for an accounting period that begins after 1 January 2020 and has been implemented with effect from 1 July 2020.

-- Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4);

   --    Amendments to References to the Conceptual Framework in IFRS Standards; 
   --    Definition of Material (Amendments to IAS 1 and IAS 8); 
   --    Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7); 
   --    Definition of a Business (Amendments to IFRS 3); 
   --    Covid-19-Related Rent Concessions (Amendment to IFRS 16). 

Their addition has not had any material impact on the disclosures, or the amounts reported in the Group Financial Statements.

New standards and interpretations not yet adopted

At the date of the interim report, the following standards and interpretations which have not been applied in the report were in issue but not yet effective (and in some cases had not yet been adopted in accordance with the Companies Act 2006). The Group will continue to assess the impact of these amendments prior to their adoption.

-- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);

-- Property, Plant and Equipment - Proceeds before Intended Use (Amendments to IAS 16);

-- Annual Improvements 2018-2020 Cycle;

-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);

-- Amendments to IFRS 17;

Alternative performance measures ('APMs')

In reporting nancial information, the Group presents Alternative Performance Measures, ('APMs'), which are not de ned or speci ed under the requirements of IFRS and which are not considered to be a substitute for, or superior to, IFRS measures.

The Group believes that these APMs provide stakeholders with additional helpful information on the performance of the business. The APMs are consistent with how we plan our business performance and report on it in our internal management reporting to the Board and the executive leadership team. Some of these measures are also used for the purpose of setting remuneration targets.

For a full list of all APMs please see the Alternative Performance Measures glossary at the end of this release.

   3.         Foreign currencies 

The principal exchange rates used were as follows:

 
                                             Average                              Closing 
                               -----------------------------------  ---------------------------------- 
                                Six months   Six months       Year 
                                  ended 31     ended 31      ended                                  30 
                                  December     December    30 June   31 December   31 December    June 
                                      2020         2019       2020          2020          2019    2020 
 
          US Dollar/GBP               1.32         1.26       1.26          1.37          1.33    1.24 
          Euro/GBP                    1.11         1.14       1.14          1.12          1.18    1.10 
          Brazilian Real/GBP          7.18         5.13       5.74          7.10          5.33    6.77 
          Mexican Peso/GBP           28.07        24.50      26.08         27.16         25.11   28.52 
          Chinese Yuan/GBP            8.90         8.88       8.89          8.92          9.23    8.75 
          Russian Rouble/GBP        100.37        81.02      85.17        101.11         82.30   88.19 
 

The assets and liabilities of foreign operations, including goodwill arising on consolidation, are translated into Sterling at the prevailing exchange rates at the balance sheet date. We translate these operations' revenues and expenses using an average rate for the period.

   4.         Segmental information 

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Group Chief Executive and the Board to allocate resources to the segments and to assess their performance.

The Group's operating and reporting structure comprises of three operating segments; Genus PIC, Genus ABS and Research and Development. These segments are the basis on which the Group reports its segmental information. The principal activities of each segment are as follows:

-- Genus PIC - our global porcine sales business;

-- Genus ABS - our global bovine sales business; and

-- Research and Development - our global spend on research and development.

A segment analysis of revenue, operating profit and segment assets and liabilities are detailed below. We do not include our adjusting items in the revenue and operating profit segments as we believe these do not reflect the trading progress of the segments. The accounting policies of the reportable segments are the same as the Group's accounting policies as described in the financial statements.

 
        Revenue 
                                              Six months     Six months          Year 
                                                   ended          ended         ended 
                                             31 December    31 December       30 June 
                                                    2020           2019          2020 
                                                    GBPm           GBPm          GBPm 
 
       Genus PIC                                   152.9          146.5         298.8 
       Genus ABS                                   129.0          118.0         237.6 
       Research and Development 
-----------------------------------------  -------------  -------------  ------------ 
          Porcine Product Development                3.0            5.0          11.7 
          Bovine Product Development                 0.8            1.2           3.3 
          Gene Editing                                 -              -             - 
          Other Research and Development               -              -             - 
-----------------------------------------  -------------  -------------  ------------ 
                                                     3.8            6.2          15.0 
                                           -------------  -------------  ------------ 
                                                   285.7          270.7         551.4 
                                           -------------  -------------  ------------ 
 
 
 

Adjusted operating profit by segment is set out below and reconciled to the Group's adjusted operating profit. A reconciliation of adjusted operating profit to profit for the period is shown on the face of the Condensed Consolidated Income Statement.

 
       Adjusted operating profit 
                                              Six months     Six months           Year 
                                                   ended          ended          ended 
                                             31 December    31 December        30 June 
                                                    2020           2019           2020 
 
                                                    GBPm           GBPm           GBPm 
 
       Genus PIC                                    63.0           57.3          113.3 
       Genus ABS                                    18.7           14.6           32.5 
       Research and Development 
-----------------------------------------  -------------  -------------  ------------- 
          Porcine Product Development             (10.3)         (12.0)         (28.9) 
          Bovine Product Development               (9.3)          (9.4)         (20.6) 
          Gene Editing                             (3.7)          (4.3)          (5.2) 
          Other Research and Development           (5.7)          (4.8)         (10.2) 
-----------------------------------------  -------------  -------------  ------------- 
                                                  (29.0)         (30.5)         (64.9) 
                                           -------------  -------------  ------------- 
       Adjusted segment operating profit            52.7           41.4           80.9 
       Central                                     (7.6)          (7.0)         (15.6) 
                                           -------------  -------------  ------------- 
       Adjusted operating profit                    45.1           34.4           65.3 
                                           -------------  -------------  ------------- 
 
 

Our business is not highly seasonal and our customer base is diversified, with no individual customer generating more than 2% of revenue.

Exceptional items, not included within adjusted operating profit, of GBP5.1m expense (2019: GBP12.8m expense), relate to Genus ABS (GBP1.6m expense), Genus PIC (GBPnil) and our central segment (GBP3.5m expense). Note 5 provides the details of these exceptional items.

We consider share-based payment expenses, not included within adjusted operating profit, on a Group-wide basis and do not allocate them to reportable segments.

 
                                                 Segment assets                      Segment liabilities 
                                    31       (restated*)          30                        (restated*)           30 
                              December       31 December        June      31 December       31 December         June 
                                  2020              2019        2020             2020              2019         2020 
                                  GBPm              GBPm        GBPm             GBPm              GBPm         GBPm 
 
         Genus PIC               253.9             242.1       247.6           (52.7)            (62.4)       (72.6) 
         Genus ABS               198.5             184.8       201.3           (57.3)            (47.5)       (52.9) 
         Research and 
         Development 
---------------------------  ---------      ------------      ------      -----------      ------------      ------- 
 
            Porcine Product 
             Development         216.7             211.6       226.3           (51.9)            (50.7)       (56.3) 
            Bovine Product 
             Development         130.9             134.0       146.5           (28.9)            (26.4)       (33.6) 
            Research               6.4               7.6         7.2            (3.7)             (1.5)        (3.5) 
---------------------------  ---------      ------------      ------      -----------      ------------      ------- 
                                 354.0             353.2       380.0           (84.5)            (78.6)       (93.4) 
 
      Segment total              806.4             780.1       828.9          (194.5)           (188.5)      (218.9) 
      Central                     35.3              38.4        39.8          (149.1)           (150.1)      (142.0) 
                             ---------      ------------      ------      -----------      ------------      ------- 
      Total                      841.7             818.5       868.7          (343.6)           (338.6)      (360.9) 
                             =========      ============      ======      ===========      ============      ======= 
 
 

*see note 1 for details of the prior period restatement

Revenue by product

 
                                                      Six months     Six months         Year 
                                                           ended          ended        ended 
                                                     31 December    31 December      30 June 
                                                            2020           2019         2020 
                                                            GBPm           GBPm         GBPm 
 
       Sale of animals, semen, embryos, products 
        and ancillary services                             212.0          199.9      408.1 
       Royalties                                            70.2           67.4      136.2 
       Consulting services                                   3.5            3.4        7.1 
                                                   -------------  -------------  --------- 
 
                                                           285.7          270.7      551.4 
                                                   =============  =============  ========= 
 
 

Revenue from contracts with customers

 
                                     Six months     Six months         Year 
                                          ended          ended        ended 
                                    31 December    31 December      30 June 
                                           2020           2019         2020 
                                           GBPm           GBPm         GBPm 
 
  Genus PIC                               151.5          144.8      295.5 
  Genus ABS                               119.1          108.0      217.7 
  Research and Development                  3.8            6.2       14.9 
                                  -------------  -------------  --------- 
  Recognised at a point in time           274.4          259.0      528.1 
                                  -------------  -------------  --------- 
 
  Genus PIC                                 1.4            1.7        3.3 
  Genus ABS                                 9.9           10.0       19.9 
  Research and Development                    -              -        0.1 
                                  -------------  -------------  --------- 
  Recognised over time                     11.3           11.7       23.3 
                                  -------------  -------------  --------- 
 
  Total Revenue                           285.7          270.7      551.4 
                                  =============  =============  ========= 
 
   5.         Exceptional items 
 
                                        Six months    Six months    Year 
                                             ended         ended   ended 
                                       31 December   31 December      30 
                                              2020          2019    June 
                                                                    2020 
        Operating expenses:                   GBPm          GBPm    GBPm 
 
        Litigation and damages               (1.7)        (12.0)  (16.4) 
        Pension related                      (3.3)             -       - 
        Acquisition and integration          (0.1)         (0.5)   (2.1) 
        Other                                    -         (0.3)   (0.7) 
                                      ------------  ------------  ------ 
                                             (5.1)        (12.8)  (19.2) 
                                      ------------  ------------  ------ 
 

Litigation

Litigation includes legal fees and related costs of GBP1.7m (2019: GBP3.8m) related to the actions between ABS Global, Inc. ('ABS') and Inguran, LLC (aka STGenetics ('ST')) and GBPnil (2019: GBP8.2m) for damages and costs related to patent infringement, which is included in non-current provisions (see note 18).

ST litigation activities six-month period ended 31 December 2020.

The ABS I and ABS II proceedings in the periods before the year ended 30 June 2020 are more fully described in the Notes to the Financial Statements in previous Annual Reports.

On 29 January 2020, ST filed a new US complaint against ABS ('ABS III'). ABS has prepared and filed a response to the ABS III complaint, including a motion to dismiss, on the basis that all these issues were fully resolved in either the ABS I or ABS II litigations. The parties await the court's decision.

On 10 March 2020, the USPTO issued patent 10,583,439 (the "439 patent'), and subsequently ST asked the court for permission to file a supplemental complaint in ABS III asserting infringement of the '439 patent. ABS believes that ST's claim for infringement falls short and has filed an opposition to ST's request. On 15 April 2020, ST filed a new complaint ('ABS IV'), asserting the same claim of infringement of the '439 patent alleged in its supplemental complaint and then moved to consolidate the ABS IV and ABS III litigation. ABS has opposed this action and has filed a motion for summary dismissal. On 23 June 2020, the USPTO issued patent 10,689,210 (the '210 patent'), and on 6 July 2020, ST sought a second supplement of ABS III by adding a claim of '210 patent infringement. ABS has opposed this action. The parties await the court's decision. On 26 October 2020 and 10 December 2020 ABS filed Inter Partes Review against the '439 and '210 patents.

ABS has also sought judgments as a matter of law ('JMOL') in relation to the invalidity of all three of the patents considered in ABS II, JMOLs in relation to the non-infringement of two of those patents, and a reduction in damages awarded by the jury. The parties await the court's decision.

Indian Litigation: In September 2019, ST also filed parallel patent infringement proceedings against ABS in India alleging infringement of the Indian patent 240790 ("790 patent'). The '790 patent is the equivalent of the US patent 7,311,476 asserted in ABS II. ABS had already sought the revocation of the '790 patent in April 2017 before the Indian Patent Office and has now consolidated the revocation petition as a counterclaim in the Indian court proceedings.

Pension related

On 20 November 2020, the High Court ruled that individual transfer payments made since 17 May 1990 would need to be equalised for the effects of GMP. This judgment followed on from the previous judgment on 26 October 2018, where the High Court ruled that schemes had a legal obligation to pay benefits allowing for GMP equalisation, resulting in an additional liability being recognised. The previous judgment had not considered historic transfer values. Genus's legacy pension schemes are also affected by this ruling, resulting in an aggregate past service charge of GBP3.3m in the period, being GBP0.9m for the Dalgety Pension Fund ('DPF') and GBP2.4m for the Milk Pension Fund ('MPF').

Acquisition and integration

During the period GBP0.1m (2019: GBP0.5m) of expenses were incurred in relation to acquisitions and integration.

   6.         Net finance costs 
 
                                                          Six months    Six months    Year 
                                                               ended         ended   ended 
                                                         31 December   31 December      30 
                                                                2020          2019    June 
                                                                                      2020 
                                                                GBPm          GBPm    GBPm 
 
        Interest payable on bank loans and overdrafts          (1.4)         (1.7)   (2.9) 
        Amortisation of debt issue costs                       (0.5)         (0.2)   (0.4) 
        Other interest payable                                     -         (0.2)   (0.1) 
        Unwinding of discount put options                      (0.3)             -   (0.5) 
        Interest on lease liabilities                          (0.4)         (0.5)   (1.0) 
        Net interest cost in respect of pension 
         scheme liabilities                                    (0.2)         (0.3)   (0.4) 
                                                        ------------  ------------  ------ 
        Total interest expense                                 (2.8)         (2.9)   (5.3) 
 
        Interest income on bank deposits                         0.2           0.1     0.3 
                                                        ------------  ------------  ------ 
        Total interest income                                    0.2           0.1     0.3 
                                                        ------------  ------------  ------ 
 
        Net finance costs                                      (2.6)         (2.8)   (5.0) 
                                                        ------------  ------------  ------ 
 
   7.         Taxation 
 
                                Six months          Six months             Year 
                                     ended               ended            ended 
                               31 December         31 December          30 June 
                                      2020                2019             2020 
                                      GBPm                GBPm             GBPm 
 
       Current tax                     8.2                 3.7             12.7 
       Deferred tax                    0.2                 2.6            (2.1) 
                            --------------  ------------------  --------------- 
       Income tax expense              8.4                 6.3             10.6 
                            --------------  ------------------  --------------- 
 

The tax charge for the period of GBP8.4m (2019: GBP6.3m) on the statutory profit represents an effective tax rate of 21.7% (2019: 20.7%).

The tax charge on adjusted profits for the period is GBP11.1m (2019: GBP8.4m), which represents a tax rate on adjusted profits of 22.9% (2019: 23.0%). The Group tax charge benefits by approximately 2.5% from the share of Group profits arising in China, which is taxed at an average rate of 15% due to the availability of tax relief on owned production agricultural activities.

In common with other UK Groups, the Group has a potential exposure to the State Aid challenge of the European Commission to group financing arrangements put in place under the UK's CFC Finco regime. The maximum potential exposure is GBP4.3m. Based on a comparative benchmarking study of the significant people functions performed in the UK relating to these structures, the company has made a provision of GBP1m for this uncertain tax position in a previous year and we believe this provision remains adequate. In February 2021 the company received correspondence from HMRC advising that they would shortly issue a charging notice for GBP1.2m in respect of these exposures. The company intends to appeal this charging notice.

There is a deferred tax liability at the period end of GBP60.1m (2019: GBP64.6m) which mainly relates to the recognition at fair value of biological assets and intangible assets arising on acquisition and a deferred tax asset of GBP3.3m (2019: GBP2.7m) relating to future tax deductions in respect of pension scheme liabilities, share scheme awards and financial instruments.

   8.         Dividends 
 
                                             Six months     Six months     Year 
                                                  ended          ended    ended 
                                            31 December    31 December       30 
                                                   2020           2019     June 
                                                                           2020 
  Amounts recognised as distributions              GBPm           GBPm     GBPm 
   to equity holders in the period: 
  Final dividend 
  Final dividend for the year ended 
   30 June 2020 of 19.7 pence per share            12.8              -        - 
  Final dividend for the year ended 
   30 June 2019 of 18.8 pence per share               -           12.2     12.2 
  Interim dividend 
  Interim dividend for the year ended 
   30 June 2020 of 9.4 pence per share                -              -      6.1 
                                          -------------  -------------  ------- 
                                                   12.8           12.2     18.3 
                                          =============  =============  ======= 
 

The final dividend for the year ended 30 June 2020 was approved at the Company Annual General Meeting on 25 November 2020 and paid on 11 December 2020.

On 24 February 2021, the Directors proposed an interim dividend of 10.3 pence per share payable on 1 April 2021.

   9.         Other intangible assets 
 
 
 
 
                                             Brand,   Separately 
                            Porcine      multiplier   identified                                           Patents, 
                         and bovine       contracts     acquired                     Assets                 licence 
                           genetics    and customer   intangible                      under                     and 
                         Technology   relationships       assets   Software   Constructi-on   IntelliGen      other     Total 
                               GBPm            GBPm         GBPm       GBPm            GBPm         GBPm       GBPm      GBPm 
Cost 
Balance at 1 July 
 2019                          53.0            85.1        138.1       14.7            11.0         24.0        4.4     192.2 
Additions                         -               -            -        0.1             8.9          1.8          -      10.8 
Disposals                         -               -            -      (0.6)               -        (1.0)          -     (1.6) 
Transfers                         -               -            -       13.6          (13.6)            -          -         - 
Effect of movements 
 in exchange rates            (1.0)             0.8        (0.2)        0.1               -          0.6          -       0.5 
 
Balance at 30 June 
 2020                          52.0            85.9        137.9       27.9             6.3         25.4        4.4     201.9 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
Additions                         -               -            -          -             1.5          0.9          -       2.4 
Disposals                         -               -            -      (0.8)               -            -          -     (0.8) 
Transfers                         -               -            -        0.2           (0.2)            -          -         - 
Effect of movements 
 in exchange rates            (0.3)           (6.8)        (7.1)      (0.6)               -        (2.5)      (0.1)    (10.3) 
 
Balance at 31 December 
 2020                          51.7            79.1        130.8       26.7             7.6         23.8        4.3     193.2 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
Amortisation and 
 impairment losses 
Balance at 1 July 
 2019                          30.8            61.8         92.6       11.6               -          5.0        2.9     112.1 
Impairment                        -               -            -        0.2               -            -          -       0.2 
Disposal                          -               -            -          -               -        (0.4)          -     (0.4) 
Amortisation for 
 the year                       2.9             5.6          8.5        1.6               -          2.3        1.0      13.4 
Effect of movements 
 in exchange rates            (0.5)             0.8          0.3        0.1               -            -          -       0.4 
 
Balance at 30 June 
 2020                          33.2            68.2        101.4       13.5               -          6.9        3.9     125.7 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
 
Amortisation for 
 the period                     1.4             2.3          3.7        1.3               -          1.0        0.1       6.1 
Disposal                          -               -            -      (0.3)               -            -          -     (0.3) 
Effect of movements 
 in exchange rates            (0.1)           (5.6)        (5.7)      (0.5)               -        (0.7)      (0.1)     (7.0) 
 
Balance at 31 December 
 2020                          34.5            64.9         99.4       14.0               -          7.2        3.9     124.5 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
Carrying amounts 
 
At 31 December 2020            17.2            14.2         31.4       12.7             7.6         16.6        0.4      68.7 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
At 30 June 2020                18.8            17.7         36.5       14.4             6.3         18.5        0.5      76.2 
                         ==========  ==============  ===========  =========  ==============  ===========  =========  ======== 
 
 

Included within the Software class of assets is GBP10.6m (30 June 2020: GBP11.5m) and included in assets in the course of construction is GBP7.5m (30 June 2020: GBP5.7m) that relate to the ongoing development costs of GenusOne, our single global enterprise system.

   10.          Biological assets 
 
         Fair value of biological assets            Bovine       Porcine     Total 
                                                      GBPm          GBPm      GBPm 
         Balance at 1 July 2020                      107.2         242.7     349.9 
         Increases due to purchases                    5.9          57.4      63.3 
         Decreases attributable to sales                 -       (111.6)   (111.6) 
         Decrease due to harvest                    (11.1)        (10.7)    (21.8) 
         Changes in fair value less estimated 
          sale costs                                   3.9          77.4      81.3 
         Effect of movements in exchange rates       (9.0)        (19.7)    (28.7) 
                                                   -------  ------------  -------- 
 
         Balance at 31 December 2020                  96.9         235.5     332.4 
                                                   =======  ============  ======== 
 
 
         Non-current biological assets                96.9         197.3     294.2 
         Current biological assets                       -          38.2      38.2 
                                                   -------  ------------  -------- 
 
         Balance at 31 December 2020                  96.9         235.5     332.4 
                                                   =======  ============  ======== 
 
         Balance at 1 July 2019 (restated*)           98.7         228.5     327.2 
         Increases due to purchases                    6.6          53.9      60.5 
         Decreases attributable to sales                 -       (112.5)   (112.5) 
         Decrease due to harvest                    (11.1)        (12.3)    (23.4) 
         Changes in fair value less estimated 
          sale costs                                  13.1          82.5      95.6 
         Effect of movements in exchange rates       (4.4)         (9.8)    (14.2) 
                                                   -------  ------------  -------- 
 
         Balance at 31 December 2019 (restated*)     102.9         230.3     333.2 
                                                   =======  ============  ======== 
 
 
         Non-current biological assets               102.9         184.2     287.1 
         Current biological assets                       -          46.1      46.1 
                                                   -------  ------------  -------- 
 
         Balance at 31 December 2019 (restated*)     102.9         230.3     333.2 
                                                   =======  ============  ======== 
 
         Balance at 1 July 2019 (restated*)           98.7         228.5     327.2 
         Increases due to purchases                   17.5         118.7     136.2 
         Decreases attributable to sales                 -       (217.3)   (217.3) 
         Decrease due to harvest                    (24.5)        (22.7)    (47.2) 
         Changes in fair value less estimated 
          sale costs                                  13.5         130.6     144.1 
         Effect of movements in exchange rates         2.0           4.9       6.9 
                                                   -------  ------------  -------- 
 
         Balance at 30 June 2020                     107.2         242.7     349.9 
                                                   =======  ============  ======== 
 
 
         Non-current biological assets               107.2         202.9     310.1 
         Current biological assets                       -          39.8      39.8 
                                                   -------  ------------  -------- 
 
         Balance at 30 June 2020                     107.2         242.7     349.9 
                                                   =======  ============  ======== 
 
 
 

*see note 1 for details of the prior period restatement

Bovine

Bovine biological assets include GBP8.2m (2019: GBP5.4m) representing the fair value of bulls owned by third parties but managed by the Group, net of expected future payments to such third parties, which are therefore treated as assets held under finance leases. There are no movements in the carrying value of the bovine biological assets in respect of sales or other changes during the period.

A risk adjusted rate of 8.8% (2019: 8.7%) has been used to discount future net cash flows from the sale of bull semen.

Decreases due to harvest represent the semen extracted from the biological assets. Inventories of such semen are shown as biological asset harvest.

Porcine

Included in increases due to purchases is the aggregate increase arising during the period on initial recognition of biological assets in respect of multiplier purchases, other than parent gilts, of GBP23.4m (2019: GBP18.0m).

Decreases attributable to sales during the period of GBP111.6m (2019: GBP112.5m) include GBP34.7m (2019: GBP33.5m) in respect of the reduction in fair value of the retained interest in the genetics of animals, other than parent gilts, transferred under royalty contracts.

Also included is GBP46.0m (2019: GBP49.2m) relating to the fair value of the retained interest in the genetics in respect of animals, other than parent gilts, sold to customers under royalty contracts in the period.

Total revenue in the period, including parent gilts, includes GBP109.1m (2019: GBP103.0m) in respect of these contracts, comprising GBP34.2m (2019: GBP35.5m) on initial transfer of animals and semen to customers and GBP74.9m (2019: GBP67.4m) in respect of royalties received.

A risk adjusted rate of 8.8% (2019: 11.0%) has been used to discount future net cash flows from the expected output of the pure line porcine herds. The number of future generations which have been taken into account is seven (2019: seven) and their estimated useful lifespan is 1.4 years (2019: 1.4 years).

 
         Six months ended 31 December 2020             Bovine   Porcine   Total 
                                                         GBPm      GBPm    GBPm 
         Net IAS 41 valuation movement on biological 
          assets* 
 
         Changes in fair value of biological assets       3.9      77.4    81.3 
         Inventory transferred to cost of sales at 
          fair value                                   (10.5)    (10.7)  (21.2) 
         Biological assets transferred to cost of 
          sales at fair value                               -    (56.4)  (56.4) 
 
                                                        (6.6)      10.3     3.7 
         Fair value movements in related financial 
          derivative                                        -     (0.2)   (0.2) 
 
                                                        (6.6)      10.1     3.5 
 
          Six months ended 31 December 2019            Bovine   Porcine   Total 
                                                         GBPm      GBPm    GBPm 
         Net IAS 41 valuation movement on biological 
          assets* 
 
         Changes in fair value of biological assets      13.1      82.5    95.6 
         Inventory transferred to cost of sales at 
          fair value                                    (9.7)    (12.3)  (22.0) 
         Biological assets transferred to cost of 
          sales at fair value                               -    (59.5)  (59.5) 
 
                                                          3.4      10.7    14.1 
         Fair value movements in related financial 
          derivative                                        -     (0.8)   (0.8) 
 
                                                          3.4       9.9    13.3 
 
 
 
         Year ended 30 June 2020                       Bovine  Porcine   Total 
                                                         GBPm     GBPm    GBPm 
         Net IAS 41 valuation movement on biological 
          assets* 
 
         Changes in fair value of biological assets      13.5    130.6   144.1 
         Inventory transferred to cost of sales at 
          fair value                                   (10.9)   (22.7)  (33.6) 
         Biological assets transferred to cost of 
          sales at fair value                               -   (95.1)  (95.1) 
 
                                                          2.6     12.8    15.4 
         Fair value movements in related financial 
          derivative                                        -      0.4     0.4 
 
                                                          2.6     13.2    15.8 
 
 

* This represents the difference between operating profit prepared under IAS 41 and operating profit prepared under historical cost accounting, which forms part of the reconciliation to adjusted operating profit.

   11.       Property, plant and equipment 
 
 
 
                              Plant,                                         Plant, 
                               motor                                          motor     Total 
                            vehicles         Assets     Total       Land   vehicles     Right 
                Land and         and          under     Owned        and        and    of Use 
               buildings   equipment   construction    Assets  Buildings  equipment    Assets      Total 
                    GBPm        GBPm           GBPm      GBPm       GBPm       GBPm      GBPm       GBPm 
Cost or 
deemed cost 
Balance at 1 
 July 
 2019               62.1        91.3            4.7     158.1          -          -         -      158.1 
Recognised on 
 the 
 adoption of 
 IFRS 
 16                    -           -              -         -       19.7        6.9      26.6       26.6 
Transfers on 
 the 
 adoption of 
 IFRS 
 16                    -      (12.2)              -    (12.2)          -       12.2      12.2          - 
Additions            0.4         9.4           14.8      24.6        1.9        7.2       9.1       33.7 
Transfers            6.6         4.7         (11.3)         -          -          -         -          - 
Disposals          (1.6)       (5.4)              -     (7.0)          -      (2.7)     (2.7)      (9.7) 
Effect of 
 movements 
 in exchange 
 rates               0.4           -              -       0.4        0.3        0.4       0.7        1.1 
 
Balance at 30 
 June 
 2020               67.9        87.8            8.2     163.9       21.9       24.0      45.9      209.8 
 
Additions            0.2         1.9            7.4       9.5        1.0        2.7       3.7       13.2 
Transfers            3.5         2.6          (6.1)         -          -          -         -          - 
Disposals          (0.3)       (1.3)              -     (1.6)      (1.5)      (1.3)     (2.8)      (4.4) 
Effect of 
 movements 
 in exchange 
 rates             (5.9)       (6.5)          (0.6)    (13.0)      (1.4)      (1.3)     (2.7)     (15.7) 
 
Balance at 31 
 December 
 2020               65.4        84.5            8.9     158.8       20.0       24.1      44.1      202.9 
 
Depreciation 
and 
impairment 
losses 
Balance at 1 
 July 
 2019               20.8        51.3              -      72.1          -          -         -       72.1 
Transfer of 
 the adoption 
 of IFRS 16            -       (4.8)              -     (4.8)          -        4.8       4.8          - 
Depreciation 
 for 
 the year            3.8         9.3              -      13.1        4.4        6.5      10.9       24.0 
Disposals          (0.7)       (2.7)              -     (3.4)          -      (1.5)     (1.5)      (4.9) 
Effect of 
 movements 
 in exchange 
 rates               0.4           -              -       0.4          -        0.3       0.3        0.7 
 
Balance at 30 
 June 
 2020               24.3        53.1              -      77.4        4.4       10.1      14.5       91.9 
 
Depreciation 
 for 
 the period          1.6         5.0              -       6.6        1.8        3.5       5.3       11.9 
Disposals          (0.2)       (0.8)              -     (1.0)      (0.9)      (1.2)     (2.1)      (3.1) 
Effect of 
 movements 
 in exchange 
 rates             (2.7)       (4.2)              -     (6.9)      (0.3)      (0.6)     (0.9)      (7.8) 
 
Balance at 31 
 December 
 2020               23.0        53.1              -      76.1        5.0       11.8      16.8       92.9 
 
Carrying 
amounts 
 
At 31 
 December 
 2020               42.4        31.4            8.9      82.7       15.0       12.3      27.3      110.0 
 
At 30 June 
 2020               43.6        34.7            8.2      86.5       17.5       13.9      31.4      117.9 
 
 
   12.       Interests in joint ventures and associates 

The Group's share of profit after tax in its equity accounted investees for the six months ended 31 December 2020 was GBP5.8m (2019: GBP5.1m).

The carrying value of the investment is reconciled as follows:

 
                                                                  31               31 
                                                            December         December 
                                                                2020             2019 
                                                                GBPm             GBPm 
  Balance at 1 July                                             22.7             23.6 
  Share of post-tax retained profits of joint ventures 
   and associates                                                5.8              5.1 
  Additions                                                      0.4              2.2 
  Disposal proceeds                                                -            (3.8) 
  Loan repayment                                                   -            (1.2) 
  Dividend received                                                -            (0.2) 
  Effect of other movements including exchange rates           (0.5)            (1.3) 
 
  Balance at 31 December                                       28 .4             24.4 
 
 

Summary financial information for equity accounted investees, adjusted for the Group's percentage ownership, is shown below:

 
                                                           Net IAS 41 
                                                            valuation 
                                                             movement 
                                                        on biological                          Profit 
                                              Revenue          assets  Expenses  Taxation   after tax 
               Income statement                  GBPm            GBPm      GBPm      GBPm        GBPm 
 
               Six months ended 31 December 
                2020                             20.6            2. 1    (14.7)     (2.2)         5.8 
                                              =======  ==============  ========  ========  ========== 
 
               Six months ended 31 December 
                2019                             16.8             1.5    (11.5)     (1.7)         5.1 
                                              =======  ==============  ========  ========  ========== 
 
               Year ended 30 June 2020           33.5           (0.1)    (22.2)     (2.3)         8.9 
                                              =======  ==============  ========  ========  ========== 
 
   13.       Related party transactions 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Bomaz, Inc. and Bogz Dairy, LLC, are well recognised breeders in the industry, and are related parties to the Group as these entities are under the control of relatives of Nate Zwald, our ABS Dairy COO.

We transact with Bomaz, Inc. and Bogz Dairy, LLC as part of our bull product development effort, under a variety of contracts and agreements. Payments in the six months ended 31 December 2020 amounted to GBP0.4m (2019: GBP1.0m). As at 31 December 2020, the balance owing to these entities was GBPnil (2019: GBPnil), all amounts were settled in cash.

These related party transactions were made on terms equivalent to those that prevail in arms' length transactions.

Other related party transactions

Transactions between the Group and its joint ventures and associates are described below:

 
                                     Transaction value                   Balance outstanding 
                             Six months  Six months 
                               ended 31    ended 31       Year    31 December    31 December       30 
                               December    December      ended           2020           2019     June 
                                   2020        2019    30 June                                   2020 
                                                          2020 
                                   GBPm        GBPm       GBPm           GBPm           GBPm     GBPm 
  Sale of goods and 
   services to joint 
   ventures and associates            -           -      (1.2)              -              -        - 
  Purchase of goods 
   and services from 
   joint ventures 
   and associates                   3.3         0.3        3.1          (1.0)          (0.2)    (1.6) 
                             ==========  ==========  =========  =============  =============  ======= 
 
 

All outstanding balances with joint ventures and associates are priced on an arm's length basis and are to be settled in cash within six months of the reporting date. None of the balances are secured.

   14.     Earnings per share 
 
                                                    Six months  Six months    Year 
                                                         ended       ended   ended 
                                                            31          31      30 
                                                      December    December    June 
                                                          2020        2019    2020 
                                                          000s        000s    000s 
 
 
      Weighted average number of ordinary 
       shares (basic)                                   65,056      64,868  64,908 
      Dilutive effect of share options and 
       awards                                              554         485     519 
 
      Weighted average number of ordinary 
       shares for the purpose of diluted earnings 
       per share                                        65,610      65,353  65,427 
 
 
 
                                                                      Year 
                                          Six months    Six months   ended 
                                               ended         ended      30 
                                         31 December   31 December    June 
                                                2020          2019    2020 
 
  Earnings per share 
 
  Basic earnings per share                     48.4p         36.5p   62.4p 
  Diluted earnings per share                   48.0p         36.3p   61.9p 
 
 
  Adjusted earnings per share 
 
  Adjusted earnings per share                  57.3p         43.5p   85.4p 
  Diluted adjusted earnings per share          56.9p         43.2p   84.7p 
 
 

Earnings per share measures are calculated on the weighted average number of ordinary shares in issue during the period. As in previous periods, adjusted earnings per share have been shown, since the Directors consider that this alternative measure gives a more comparable indication of the Group's trading performance.

Basic earnings per share is based on the net profit attributable to owners of the Company for the period of GBP31.5m (six months ended 31 December 2019: GBP23.7m; year ended 30 June 2020: GBP40.5m) divided by weighted average number of ordinary shares (basic and diluted) as calculated above.

Adjusted earnings per share is calculated on profit for the period before net IAS 41 valuation movement on biological assets, amortisation of acquired intangible assets, share-based payment expense and exceptional items, after charging taxation associated with those profits, of GBP37.3m (six months ended 31 December 2019: GBP28.2m; year ended 30 June 2020: GBP55.4m), which is calculated as follows:

 
                      Adjusted earnings    Six months    Six months          Year 
                                                ended         ended         ended 
                                                   31            31            30 
                                             December      December          June 
                                                 2020          2019          2020 
                                                 GBPm          GBPm          GBPm 
 
  Profit before tax                              38.7          30.4          51.5 
  Add/(deduct): 
  Net IAS 41 valuation movement on 
   biological assets                            (3.5)        (13.3)        (15.8) 
  Amortisation of acquired intangible 
   assets                                         3.7           4.0           8.5 
  Share-based payment expense                     4.3           2.8           5.8 
  Exceptional items                               5.1          12.8          19.2 
  Net IAS 41 valuation movement on 
   biological assets in joint ventures 
   and associates                               (2.1)         (1.5)           0.1 
  Tax on joint ventures and associates            2.2           1.7           2.3 
  Attributable to non-controlling 
   interest                                         -         (0.3)         (0.6) 
 
  Adjusted profit before tax                     48.4          36.6          71.0 
  Adjusted tax charge                          (11.1)         (8.4)        (15.6) 
 
  Adjusted profit after tax                      37.3          28.2          55.4 
 
 
 
  Effective tax rate on adjusted profit         22.9%        23.0%        22.0% 
 
 
   15.       Cash flow from operating activities 
 
                                                  Six months     Six months     Year 
                                                       ended          ended    ended 
                                                          31    31 December       30 
                                                    December           2019     June 
                                                        2020                    2020 
                                                        GBPm           GBPm     GBPm 
 
  Profit for the period                                 30.3           24.1     40.9 
  Adjustment for: 
  Net IAS 41 valuation movement on biological 
   assets                                              (3.5)         (13.3)   (15.8) 
  Amortisation of acquired intangible 
   assets                                                3.7            4.0      8.5 
  Share-based payment expense                            4.3            2.8      5.8 
  Share of profit of joint ventures and 
   associates                                          (5.8)          (5.1)    (8.9) 
  Finance costs (net)                                    2.6            2.8      5.0 
  Income tax expense                                     8.4            6.3     10.6 
  Exceptional items                                      5.1           12.8     19.2 
 
  Adjusted operating profit                             45.1           34.4     65.3 
 
  Depreciation of property plant and equipment          11.9           10.5     24.0 
  Loss on disposal of property plant and 
   equipment                                               -            0.1      3.7 
  Loss on disposal of intangible assets                  0.5              -      1.2 
  Amortisation and impairment of intangible 
   assets                                                2.4            2.4      5.1 
 
  Adjusted earnings before interest, tax, 
   depreciation and amortisation                        59.9           47.4     99.3 
 
  Cash impact of exceptional items                     (1.8)          (2.7)    (5.8) 
  Other movements in biological assets 
   and harvested produce                               (7.7)          (4.9)    (2.9) 
  Decrease in provisions and release in 
   deferred consideration                              (0.4)          (2.1)    (2.2) 
  Additional pension contribution in excess 
   of pension charge                                   (3.2)          (3.6)    (7.9) 
  Other                                                (0.6)            0.2    (0.9) 
 
  Operating cash flows before movement 
   in working capital                                   46.2           34.3     79.6 
 
  Decrease/(increase) in inventories                     0.6          (0.8)      0.1 
  Increase in receivables                              (5.7)          (2.2)    (8.8) 
  Increase in payables                                   3.9            1.6     12.0 
 
  Cash generated by operations                          45.0           32.9     82.9 
 
  Interest received                                      0.2            0.1      0.3 
  Interest and other finance costs paid                (1.4)          (1.9)    (3.4) 
  Interest on leased assets                            (0.4)          (0.4)    (1.0) 
  Cash flow from derivative financial 
   instruments                                             -              -      0.5 
  Income taxes paid                                    (5.3)          (6.6)   (13.5) 
 
  Net cash from operating activities                    38.1           24.1     65.8 
                                                 ===========  =============  ======= 
 
   16.       Retirement benefit obligations 

The Group has a number of defined contribution and defined benefit pension schemes covering many of its employees, further details can be found in the Genus plc Annual Report 2020. The aggregated position of defined benefit schemes are provided below:

 
                                                    31 December   (restated*)    30 June 
                                                           2020   31 December       2020 
                                                                         2019 
                                                           GBPm          GBPm       GBPm 
 
        Present value of funded obligations             1,166.1       1,189.1    1,159.5 
        Present value of unfunded obligations               9.0           8.8        9.8 
 
        Total present value of obligations              1,175.1       1,197.9    1,169.3 
        Fair value of plan assets                     (1,189.0)     (1,196.4)  (1,182.5) 
        Restricted recognition of asset (DPF)               8.1           5.5        8.7 
        Recognition of additional liability 
         (MPF)                                             20.8          13.5       22.6 
 
        Recognised liability for defined benefit 
         obligations                                       15.0          20.5       18.1 
 
 

*The December 2019 comparative figures have been restated to include in the aggregated disclosures the assets and related liabilities of the bulk annuity policies. The deficit recognised in 2019 has not been impacted.

The principal actuarial assumptions (expressed as weighted averages) are:

 
                                      31  31 December     30 
                                December         2019   June 
                                    2020                2020 
                                       %            %      % 
 
        Discount rate               1.45         2.05   1.65 
        Retail Price Index          2.60         2.95   2.80 
        Consumer Price Index        2.10         2.05   2.10 
 
 

Guaranteed Minimum Pension ('GMP')

On 20 November 2020, the High Court ruled that individual transfer payments made since 17 May 1990 would need to be equalised for the effects of GMP. This judgment followed on from the previous judgment on 26 October 2018, where the High Court ruled that schemes had a legal obligation to pay benefits allowing for GMP equalisation, resulting in an additional liability being recognised. The previous judgment had not considered historic transfer values. Genus's legacy pension schemes are also affected by this ruling, resulting in an aggregate past service charge of GBP3.3m in the period.

The Dalgety Pension Fund ('DPF') is both in surplus and additionally had a reserve of GBP8.7m at 30 June 2020 against future unknown liabilities, neither of which has been recognised in the Genus accounts as the Group does not have a unilateral right to them. The cost of GMP equalisation relating to individual transfer payments is estimated to be GBP0.9m for the DPF which will be fully met by the scheme reserve without a cash cost to Genus. However, IAS19 requires us to record a charge in the Income Statement of GBP0.9m, which is offset by an equal and opposite credit in the Statement of Comprehensive Income.

The cost of GMP equalisation relating to individual transfer payments for Genus's share of the Milk Pension Fund ('MPF') is estimated to be GBP2.4m which is also recorded as a charge to the Income Statement. On an IAS19 basis the MPF is also in surplus, however under IFRIC 14 Genus accounts for its committed payments under the deficit recovery plan agreed as part of the 31 March 2018 scheme valuation as a liability.

The Milk Pension Fund

We have accounted for our section of the scheme and our share of any orphan assets and liabilities, which together represent approximately 86% of the MPF. Although the MPF is managed on a sectionalised basis, it is a "last man standing scheme", which means that all participating employers are joint and severally liable for all of the fund's liabilities.

Further details of the Milk Pension Fund can be found in the Genus plc Annual Report 2020.

   17.       Financial instruments fair value disclosures 

The table below sets out the categorisation of the financial instruments held by the Group at 31 December 2020.

We have categorised financial instruments held at valuation into a three-level fair value hierarchy, based on the priority of the inputs to the valuation technique in accordance with IFRS 13. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Valuations categorised as Level 2 are obtained from third parties. If the inputs used to measure fair value fall within different levels of the hierarchy, we base the category level on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

 
                            31 December 2020                    31 December 2019                      30 June 2020 
                    Level   Level 2   Level     Total   Level   Level 2   Level     Total   Level   Level 2   Level     Total 
                        1                 3                 1                 3                 1                 3 
                     GBPm      GBPm    GBPm      GBPm    GBPm      GBPm    GBPm      GBPm    GBPm      GBPm    GBPm      GBPm 
 Financial assets 
 Other 
  investments         1.8         -     5.0       6.8     2.0         -     4.7       6.7     1.8         -     5.1       6.9 
 Trade 
  receivables and 
  other debtors, 
  excluding 
  prepayments and 
  accrued income        -      90.1       -      90.1       -      87.7       -      87.7       -      89.0       -      89.0 
 Cash and cash 
  equivalents           -      50.2       -      50.2       -      31.1       -      31.1       -      41.3       -      41.3 
 Derivative 
  instruments in 
  non-designated 
  hedge 
  accounting 
  relationships         -       0.9       -       0.9       -       0.1       -       0.1       -       1.2       -       1.2 
 Derivative 
  instruments in 
  designated 
  hedge 
  accounting 
  relationships         -         -       -         -       -       0.2       -       0.2       -         -       -         - 
                   ------  --------  ------  --------  ------  --------  ------  --------  ------  --------  ------  -------- 
 Financial assets     1.8     141.2     5.0     148.0     2.0     119.1     4.7     125.8     1.8     131.5     5.1     138.4 
                   ======  ========  ======  ========  ======  ========  ======  ========  ======  ========  ======  ======== 
 
 Financial 
 liabilities 
 Trade and other 
  payables, 
  excluding other 
  taxes and 
  social security       -    (89.7)       -    (89.7)       -    (79.1)       -    (79.1)       -    (92.2)       -    (92.2) 
 Loans and 
  overdrafts            -   (114.8)       -   (114.8)       -   (109.1)       -   (109.1)       -   (112.8)       -   (112.8) 
 Leasing 
  obligations           -    (27.6)       -    (27.6)       -    (29.2)       -    (29.2)       -    (31.1)       -    (31.1) 
 Derivative 
  instruments in 
  non-designated 
  hedge 
  accounting 
  relationships         -     (0.3)       -     (0.3)       -     (0.4)       -     (0.4)       -     (0.3)       -     (0.3) 
 Derivative 
  instruments in 
  designated 
  hedge 
  accounting 
  relationships         -     (0.1)       -     (0.1)       -     (0.1)       -     (0.1)       -     (0.2)       -     (0.2) 
 Put option over 
  non-controlling 
  interest              -     (5.9)       -     (5.9)       -     (5.5)       -     (5.5)       -     (6.1)       -     (6.1) 
 Deferred 
  consideration 
  (see note 19)               (0.4)   (1.0)     (1.4)       -     (4.7)       -     (4.7)       -     (5.1)   (3.6)     (8.7) 
                   ------  --------  ------  --------  ------  --------  ------  --------  ------  --------  ------  -------- 
                        -   (238.8)   (1.0)   (239.8)       -   (228.1)       -   (228.1)       -   (247.8)   (3.6)   (251.4) 
                   ======  ========  ======  ========  ======  ========  ======  ========  ======  ========  ======  ======== 
 

The Directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements are approximately equal to their fair values.

   18.          Provisions 
 
 
                                                                Contingent 
                                              ST    deferred consideration         Share    Other provisions 
                                      litigation                      GBPm    forfeiture                GBPm    Total 
                                            GBPm                                    GBPm                         GBPm 
 
         Balance at 1 July 2019                -                       4.5           2.0                 2.3      8.8 
         Additional provision in 
          the year                          10.2                         -           0.3                 2.5     13.0 
         Utilisation of provision              -                         -             -               (1.6)    (1.6) 
         Release of provision                  -                         -             -               (0.2)    (0.2) 
         Reclassified to deferred 
          consideration*                       -                     (4.5)             -                   -    (4.5) 
         Effect of movement in 
          exchange rates                     0.3                         -             -                   -      0.3 
                                    ------------  ------------------------  ------------  ------------------  ------- 
         Balance at 30 June 2020            10.5                         -           2.3                 3.0     15.8 
 
         Additional provision in 
          the year                           0.2                         -             -                 1.5      1.7 
         Utilisation of provision          (0.1)                         -             -               (1.5)    (1.6) 
         Release of provision                  -                         -             -               (0.2)    (0.2) 
         Effect of movement in 
          exchange rates                   (1.0)                         -             -               (0.1)    (1.1) 
                                    ------------  ------------------------  ------------  ------------------  ------- 
         Balance at 31 December 
          2020                               9.6                         -           2.3                 2.7     14.6 
                                    ------------  ------------------------  ------------  ------------------  ------- 
 

*Contingent deferred consideration has been reclassified to be disclosed within deferred consideration, as the balances are recorded at fair value and not estimated.

 
                         31 December  31 December  30 June 
                                2020         2019     2020 
                                GBPm         GBPm     GBPm 
 
         Current                 3.7         10.0      4.0 
         Non-current            10.9          4.9     11.8 
                         -----------  -----------  ------- 
                                14.6         14.9     15.8 
                         -----------  -----------  ------- 
 

ST litigation relates specifically to our litigation only with Sexing Technologies, as described in note 5.

   19.          Deferred consideration 
 
                                                             Contingent 
                                                 deferred consideration    Deferred consideration 
                                                                   GBPm                      GBPm    Total 
                                                                                                      GBPm 
 
         Balance at 1 June 2019                                       -                       6.2      6.2 
         Reclassified from provisions                               4.5                         -      4.5 
         Payment of consideration                                 (0.6)                     (1.1)    (1.7) 
         Release of unutilised contingent 
          consideration                                           (0.4)                         -    (0.4) 
         Effect of movement in exchange rates                       0.1                         -      0.1 
                                                -----------------------  ------------------------  ------- 
         Balance at 30 June 2020                                    3.6                       5.1      8.7 
 
         Payment of consideration                                 (2.0)                     (4.6)    (6.6) 
         Release of unutilised contingent 
          consideration                                           (0.4)                         -    (0.4) 
         Effect of movement in exchange rates                     (0.2)                     (0.1)    (0.3) 
                                                -----------------------  ------------------------  ------- 
         Balance at 31 December 2020                                1.0                       0.4      1.4 
                                                -----------------------  ------------------------  ------- 
 
 
 
         Current                       0.6  0.4  1.0 
         Non-current                   0.4    -  0.4 
                                       ---  ---  --- 
         Balance at 31 December 2020   1.0  0.4  1.4 
                                       ---  ---  --- 
 
         Current                       2.8  4.7  7.5 
         Non-current                   0.8  0.4  1.2 
                                       ---  ---  --- 
         Balance at 30 June 2020       3.6  5.1  8.7 
                                       ---  ---  --- 
 

The balance at 31 December 2020 relates to the following transactions:

 
                                                              Contingent 
                                             Fiscal year        deferred         Deferred 
                                          of transaction   consideration    consideration    Total 
                                                                    GBPm             GBPm     GBPm 
 
         De Novo Genetics LLC                       2017               -              0.4      0.4 
         Hermitage Genetics DAC                     2017             0.5                -      0.5 
         Dairy LLC (n/a Bovisync)                   2019             0.4                -      0.4 
         Progenex S.L.                              2019             0.1                -      0.1 
                                                          --------------  ---------------  ------- 
         Balance at 31 December 2020                                 1.0              0.4      1.4 
                                                          --------------  ---------------  ------- 
 

GENUS PLC

RESPONSIBILITY STATEMENT

For the six months ended 31 December 2020

We confirm that to the best of our knowledge;

   a)        the Condensed Set of Financial Statements has been prepared in accordance with IAS 34; 

b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year); and

c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and charges therein).

Neither the Company nor the Directors accept any liability to any person in relation to the half-yearly financial report except to the extent that such liability could arise under English Law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A of the Financial Services and Markets Act 2000.

By order of the Board

 
 Chief Executive   Chief Financial Officer 
 Stephen Wilson    Alison Henriksen 
 

24 February 2021

Alternative Performance Measures ('APMs) - Glossary

The Group tracks a number of APMs in managing its business, which are not defined or specified under the requirements of IFRS because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS.

The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board and executive leadership team. Some of these APMs are also used for the purpose of setting remuneration targets.

These APM should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial information relating to the Group, which are prepared in accordance with IFRS. The Group believes that these APMs are useful indicators of its performance. However, they may not be comparable to similarly-titled measures reported by other companies due to differences in the way they are calculated. The key APMs that the Group uses include:

 
 Alternative Performance Measures        Calculation methodology and closest     Reasons why we believe the APMs are 
                                         equivalent IFRS measure (where          useful 
                                         applicable) 
 Income statement measures 
 Adjusted operating profit exc JVs       Adjusted operating profit is            Allows the comparability of 
                                         operating profit with the net IAS 41    underlying financial performance by 
                                         valuation movement on biological        excluding the impacts of exceptional 
                                         assets, amortisation of acquired        items and is a performance indicator 
                                         intangible assets, share-based          against which short-term and 
                                         payment expense and exceptional         long-term incentive outcomes 
                                         items added back and excludes JV and    for our senior executives are 
                                         associate results.                      measured. 
                                         Closest equivalent IFRS measure:-       -- net IAS 41 valuation movements on 
                                         Operating profit*                       biological assets - these movements 
                                         See reconciliation below.               can be materially 
                                                                                 volatile and do not directly 
                                                                                 correlate to the underlying trading 
                                                                                 performance in the period. 
                                                                                 Furthermore, the movement is non-cash 
                                                                                 related and many assumptions used in 
                                                                                 the valuation model 
                                                                                 are based on projections rather than 
                                                                                 current trading; 
                                                                                 -- amortisation of acquired 
                                                                                 intangible assets - excluding this 
                                                                                 improves the comparability 
                                                                                 between acquired and organically 
                                                                                 grown operations, as the latter 
                                                                                 cannot recognise internally 
                                                                                 generated intangible assets. 
                                                                                 Adjusting for amortisation provides a 
                                                                                 more consistent basis for 
                                                                                 comparison between the two; 
                                                                                 -- share based payments - this 
                                                                                 expense is considered to be 
                                                                                 relatively volatile and not fully 
                                                                                 reflective of the current period 
                                                                                 trading, as the performance criteria 
                                                                                 are based on EPS performance 
                                                                                 over a three-year period and include 
                                                                                 estimates of future performance; and 
                                                                                 -- exceptional items - these are 
                                                                                 items which due to either their size 
                                                                                 or their nature are 
                                                                                 excluded to improve the understanding 
                                                                                 of the Group's underlying 
                                                                                 performance. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted operating profit inc JVs       Including adjusted operating profit 
                                         from JV and associate results. 
 
                                         See reconciliation below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted operating profit inc JVs exc   Including adjusted operating profit 
 gene editing costs                      from JV and associate results but 
                                         excluding gene editing 
                                         costs. 
 
                                         See reconciliation below. 
                                        -------------------------------------- 
 Adjusted profit inc JVs before tax      Adjusted operating profit inc JVs 
                                         less net finance costs 
 
                                         See reconciliation below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted effective tax rate             Total income tax charge for the Group   Provides an underlying tax rate to 
                                         excluding the tax impact of adjusting   allow comparability of underlying 
                                         items divided                           financial performance 
                                         the adjusted operating profit           by excluding the impacts of net IAS 
                                         Closest equivalent IFRS measure:-       41 valuation movement on biological 
                                         Effective tax rate                      assets, amortisation 
                                         See reconciliation below.               of acquired intangible assets, 
                                                                                 share-based payment expense and 
                                                                                 exceptional items. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted basic earnings per share       Adjusted profit after tax divided by    On a per share basis, this allows the 
                                         the weighted basic average number of    comparability of underlying financial 
                                         shares                                  performance by 
                                         Closest equivalent IFRS measure:-       excluding the impacts of adjusting 
                                         Earnings per share                      items. 
 
                                         See calculation below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted diluted earnings per share     Underlying attributable profit 
                                         divided by the diluted weighted 
                                         average number of shares 
 
                                         Closest equivalent IFRS measure:- 
                                         Diluted earnings per share 
 
                                         See calculation below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted earnings cover                 Adjusted earnings per share divided     The board dividend policy targets the 
                                         by the expected dividend for the        adjusted earning cover to be between 
                                         year.                                   2.5 - 3 times 
 
                                         See calculation below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted EBITDA- calculated in          This is adjusted operating profit,      This APM is presented because it is 
 accordance with the definitions used    adding back cash received from our      used in calculating our ratio of net 
 in our financing facilities             joint ventures, depreciation            debt to EBITDA and 
                                         of property, plant & equipment,         our interest cover which we report to 
                                         depreciation of the historical cost     our banks to ensure compliance with 
                                         of biological assets,                   our bank covenants. 
                                         operational amortisation (i.e. 
                                         excluding amortisation on acquired 
                                         intangibles) and deducting 
                                         the amount attributable to minority 
                                         interest. 
                                         Closest equivalent IFRS measure:- 
                                         Operating profit* 
                                         See calculation & reconciliation 
                                         below. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted operating margin               Adjusted operating profit (inc JV)      Allows for the comparability of 
                                         divided by Revenue                      underlying financial performance by 
                                                                                 excluding the impacts 
                                                                                 of exceptional items. 
                                        --------------------------------------  -------------------------------------- 
 Adjusted operating margin (exc JV)      Adjusted operating profit (exc JV) 
                                         divided by Revenue 
                                        --------------------------------------  -------------------------------------- 
 Constant currency basis                 The Group reports certain nancial       The Group business operates in 
                                         measures, on both a reported and        multiple worldwide and its trading 
                                         constant currency basis                 results when translated 
                                         and retranslates the current year's     back into the groups functional 
                                         results at the average actual           currency of GBP Sterling. This 
                                         exchange rates used in the              measure eliminates the effects 
                                         previous nancial year.                  of exchange rate uctuations when 
                                                                                 comparing the year-on-year reported 
                                                                                 results. 
                                        --------------------------------------  -------------------------------------- 
 Balance sheet measures 
 Net debt                                Net debt is gross debt, made up of      This allows the Group to monitor its 
                                         unsecured bank loans and overdrafts     levels of debt. 
                                         and obligations under 
                                         finance leases, with a deduction for 
                                         cash and cash equivalents. 
 
                                         See reconciliation below. 
                                        --------------------------------------  -------------------------------------- 
 Net debt - calculated in accordance     Net debt exc the impact of adopting     This is a key metric that we report 
 with the definitions used in our        IFRS 16 and adding back guarantees      to our banks to ensure compliance 
 financing facilities                    and deferred purchase                   with our bank covenants. 
                                         arrangements. 
 
                                         See reconciliation below . 
                                        --------------------------------------  -------------------------------------- 
 Cash flow measures 
 Cash conversion                         Cash generated by operations as a       This is used to measure how much 
                                         percentage of adjusted operating        operating cash flow we are generating 
                                         profit exc JVs.                         and how efficient we 
                                         See calculation below.                  are at converting our operating 
                                                                                 profit into cash. 
                                        --------------------------------------  -------------------------------------- 
 Free cashflow                           Cash generated by the Group before      Shows the cash retained by the group 
                                         debt repayments, acquisitions and       in the year. 
                                         investments, dividends 
                                         and proceeds from share issues 
                                         Closest equivalent IFRS measure:- 
                                         Net cashflow from operating 
                                         activities 
 
                                         See reconciliation below 
                                        --------------------------------------  -------------------------------------- 
 Other measures 
 Ratio of net debt to Adjusted EBITDA    The ratio of net debt, calculated in    This APM is used as a measurement of 
                                         accordance with the definitions used    our leverage and is also a key metric 
                                         in our financing                        that we report 
                                         facilities, is gross debt, made up of   to our banks to ensure compliance 
                                         unsecured bank loans and overdrafts     with our bank covenants. 
                                         and obligations 
                                         under finance leases, with a 
                                         deduction for cash and cash 
                                         equivalents and adding back amounts 
                                         related to guarantees and deferred 
                                         purchase arrangements, to EBITDA. 
                                         Closest equivalent IFRSs components 
                                         for the ratio:- 
                                         The equivalent IFRS components are 
                                         gross debt, cash and cash equivalents 
                                         and operating profit. 
 
                                         See calculation below 
                                        --------------------------------------  -------------------------------------- 
 

* Operating profit is not defined per IFRS. It is presented in the Group Income Statement and is shown as profit before tax, finance income/costs and share of post-tax profit of joint ventures and associates retained.

The tables below reconcile the closest equivalent IFRS measure to the APM or outline the calculation of the APM.

Income Statement Measures

 
 Adjusted operating profit exc      31 December     31 December        30 June 
 JVs                                    2020            2019             2020 
 Adjusted operating profit inc 
 JVs 
 Adjusted operating profit inc 
 JVs and exc gene editing costs     GBPm    GBPm    GBPm    GBPm     GBPm    GBPm    Reference 
--------------------------------  -------  -----  -------  ------  -------  ------  -------------------------------- 
 Operating Profit                           35.5            28.1             47.6    Group Income Statement 
 Add back: 
 Net IAS 41 valuation movement 
  on biological assets             (3.5)           (13.3)           (15.8)           Group Income Statement 
 Amortisation of acquired 
  intangible assets                 3.7             4.0              8.5             Group Income Statement 
 Share-based payment expense        4.3             2.8              5.8             Group Income Statement 
 Exceptional items                  5.1             12.8             19.2            Group Income Statement 
                                  -------         -------          ------- 
 Adjusted operating profit exc 
  JVs                                       45.1            34.4             65.3    Group Income Statement 
 Less: amounts attributable to 
  non-controlling interest                   -              (0.3)            (0.6) 
 Operating profit from joint 
  ventures and associates           5.8             5.1              8.9             Group Income Statement 
 Tax on joint ventures and                                                           Note 12 - Equity accounted 
  associates                        2.2             1.7              2.3             investees 
                                                                                     Note 12 - Equity accounted 
 Net IAS 41 valuation movement     (2.1)           (1.5)             0.1             investees 
                                  -------         -------          ------- 
 Adjusted operating profit from 
  JVs                                       5.9              5.3             11.3 
                                           -----           ------           ------ 
 Adjusted operating profit inc 
  JVs                                       51.0            39.4             76.0 
 Gene editing costs                         3.7              4.3              5.2    Note 4 - Segmental information 
                                           -----           ------           ------ 
 Adjusted operating profit inc 
  JVs and exc gene editing costs            54.7            43.7             81.2 
--------------------------------  -------  -----  -------  ------  -------  ------  ---------------------------------- 
 
 
                                       31 December   31 December   30 June 
 Adjusted profit inc JVs before tax        2020          2019        2020 
  Adjusted profit inc JVs after tax        GBPm          GBPm        GBPm    Reference 
                                      ------------  ------------  -------- 
 Adjusted operating profit inc JVs        51.0          39.4        76.0     See APM 
 Less net finance costs                   (2.6)         (2.8)       (5.0)    Note 6 - Net Finance Costs 
                                      ------------  ------------  -------- 
 Adjusted profit inc JVs before tax       48.4          36.6        71.0 
 Adjusted tax                            (11.1)         (8.4)      (15.6)    Note 14 - Earnings per share 
                                      ------------  ------------  -------- 
 Adjusted profit inc JVs after tax        37.3          28.2        55.4 
------------------------------------  ------------  ------------  --------  ----------------------------- 
 
 
                                        31 December      31 December        30 June 
                                            2020             2019             2020 
 Adjusted effective tax GBPm/rate      GBPm      %      GBPm      %      GBPm      %      Reference 
------------------------------------  ------  -------  ------  -------  ------  -------  ----------------------------- 
 Adjusted effective tax GBPm/rate       8.4     21.7     6.3     20.7    15.6     22.0    Note 14 - Earnings per share 
 Exceptional items                      1.0     19.6     3.2     24.7    (4.5)   (23.4) 
 Share-based payment expense            0.8     18.9    (0.2)   (6.6)    (1.1)   (19.0) 
 Amortisation of acquired intangible 
  assets                                0.8     21.6     0.9     22.5    (1.8)   (21.2) 
 Net IAS 41 valuation movement on 
  biological assets                    (1.0)   (28.6)   (3.0)   (22.3)    4.7     29.7 
 Net IAS 41 valuation movement on 
  biological assets in JVs             (1.1)   (52.4)   (0.5)   (33.3)     -       - 
 Tax on share of profits from joint 
  ventures and associates               2.2    100.0     1.7    100.0      -       - 
                                      ------  -------  ------  -------  ------  ------- 
 Effective tax GBPm/rate               11.1     22.9     8.4     23.0    12.9     24.0    Note 7 - Income tax expense 
------------------------------------  ------  -------  ------  -------  ------  -------  ----------------------------- 
 
 
                                                   31 December   31 December   30 June 
 Adjusted Basic Earnings per share                     2020          2019        2020    Reference 
                                                  ------------  ------------  -------- 
 Adjusted profit inc JVs after tax (GBPm)             37.3          28.2        55.4      See APM 
 
 Weighted average number of ordinary shares (m)      65.056        64.868      64.908    Note 14 - Earnings per share 
 
 Adjusted Earnings per share (pence)                  57.3          43.5        85.4 
------------------------------------------------  ------------  ------------  --------  ----------------------------- 
 
 
                                                    31 December   31 December   30 June 
 Adjusted Diluted Earnings per share                    2020          2019        2020    Reference 
                                                   ------------  ------------  -------- 
 Adjusted profit inc JVs after tax (GBPm)              37.3          28.2        55.4      See APM 
 
 Weighted average number of diluted ordinary 
  shares (m)                                          65.610        65.353      65.427    Note 14 - Earnings per share 
 
 Diluted adjusted Earnings per share (pence)           56.9          43.2        84.7 
-------------------------------------------------  ------------  ------------  --------  ----------------------------- 
 
 
                                                   31 December      31 December        30 June 
                                                       2020             2019             2020       Reference 
 Rolling 12 month Adjusted Earnings cover         Pence    Times   Pence    Times   Pence   Times 
-----------------------------------------------  -------  ------  -------  ------  ------  ------  ------------------- 
 Adjusted Earnings per share (pence)               57.3             43.5            85.4            See APM 
 Add: Prior June Adjusted Earnings per share 
  (pence)                                          85.4             73.2             N/a            See APM 
 Deduct: Prior Interim Adjusted Earnings per 
  share (pence)                                   (43.5)           (35.8)            N/a            See APM 
                                                 -------          -------          ------ 
 Rolling 12 month adjusted Earnings per share      99.2             80.9            85.4 
 
 Final dividend for the year ended 30 June 2019                     18.8                            Note 8 - Dividends 
 Interim dividend for the year end 30 June 2020                     9.4              9.4            Note 8 - Dividends 
 Final dividend for the year ended 30 June 2020    19.7                             19.7            Note 8 - Dividends 
 Interim dividend for the year end 30 June 2021    10.3                                             Note 8 - Dividends 
                                                 -------          -------          ------ 
 Rolling 12-month dividend                         30.0             28.2            29.1 
 
 
 Rolling 12 month Adjusted Earnings cover                   3.3              2.9             2.9 
-----------------------------------------------  -------  ------  -------  ------  ------  ------  ------------------- 
 
 
 Adjusted EBITDA - as calculated      31 December     31 December       30 June 
 under our financing                      2020            2019            2020 
 facilities                           GBPm    GBPm    GBPm    GBPm    GBPm    GBPm   Reference 
----------------------------------  -------  -----  -------  -----  -------  -----  ---------------------------------- 
 Operating Profit                             35.5            28.1            47.6   Group Income Statement 
 Add back: 
 Net IAS 41 valuation movement on 
  biological assets                  (3.5)           (13.3)          (15.8)          Group Income Statement 
 Amortisation of acquired 
  intangible assets                   3.7             4.0             8.5            Group Income Statement 
 Share-based payment expense          4.3             2.8             5.8            Group Income Statement 
 Exceptional items                    5.1             12.8            19.2           Group Income Statement 
                                    -------         -------         ------- 
 Adjusted operating profit exc JVs    45.1            34.4            65.3           Group Income Statement 
 Adjust for: 
 Cash received from JVs (dividend 
  and loan repayment)                  -              1.4             3.7            Group Statement of Cash Flows 
 Depreciation:- Property, plant &                                                    Note 11 - Property, Plant & 
  equipment owned assets              6.6             6.0             13.1           Equipment 
 Depreciation:- historical cost of 
  biological assets                   5.2             5.0             11.0           No direct reference 
 Amortisation and impairment 
  (excluding separately identified 
  acquired intangible assets)         2.4             2.4             5.1            Note 9 - Intangible Assets 
 Less amounts attributable to 
  non-controlling interest             -             (0.3)           (0.6)           Group Income Statement 
                                    -------         -------         ------- 
 Adjusted EBITDA - as calculated 
  under our financing facilities              59.3            48.9            97.6 
----------------------------------  -------  -----  -------  -----  -------  -----  ---------------------------------- 
 
 
                                                     31 December      31 December      30 June 
                                                         2020             2019           2020 
 Rolling 12 month Adjusted EBITDA - 
  as calculated under our financing facilities       GBPm    GBPm     GBPm    GBPm   GBPm   GBPm   Reference 
-------------------------------------------------  -------  ------  -------  -----  -----  -----  ---------- 
 Adjusted EBITDA 
  - as calculated under our financing facilities     59.3             48.9           97.6          See APM 
 Add: Prior June Adjusted EBITDA                     97.6             88.3           N/a           See APM 
 Deduct: Prior Interim Adjusted EBITDA              (48.9)           (40.7)          N/a           See APM 
                                                   -------          -------         ----- 
 Rolling 12 month Adjusted EBITDA                            108.0            96.5          97.6 
-------------------------------------------------  -------  ------  -------  -----  -----  -----  ---------- 
 

Balance Sheet Measures

 
 Net Debt 
 Net debt as calculated under our financing     31 December      31 December        30 June 
 facilities                                         2020             2019             2020        Reference 
                                              ---------------  ---------------  --------------- 
                                               GBPm     GBPm    GBPm     GBPm    GBPm     GBPm 
--------------------------------------------  ------  -------  ------  -------  ------  -------  --------------------- 
 Current unsecured bank loans and overdrafts    9.8              8.7              9.2             Group Balance Sheet 
 Non-current unsecured bank loans and 
  overdrafts                                   105.0            100.4            103.6            Group Balance Sheet 
                                              ------           ------           ------ 
 Total unsecured bank loans and overdrafts             114.8            109.1            112.8 
 Current obligations under finance leases       9.0              7.5             10.0             Group Balance Sheet 
 Non-current obligations under finance 
  leases                                       18.6             21.7             21.1             Group Balance Sheet 
                                              ------           ------           ------ 
 Total obligations under finance leases                 27.6             29.2             31.1 
 Total debt financing                                  142.4            138.3            143.9    Analysis of Net Debt 
 Deduct:- 
 Cash and cash equivalents                             (50.2)           (31.1)           (41.3)   Group Balance Sheet 
                                                      -------          -------          ------- 
 Net Debt                                               92.2            107.2            102.6 
 Deduct:- 
 Impact of IFRS 16 adoption*                             -              (23.4)           (24.7)   No direct reference 
 Lower of obligations under finance leases 
 or GBP30m*                                            (27.6)            N/a              N/a     Group Balance Sheet 
 Add back:- 
 Guarantees                                             19.6             4.9              5.9     No direct reference 
 Deferred purchase arrangements                         1.2              1.3              0.2     No direct reference 
                                                      -------          -------          ------- 
 Net Debt - as calculated under our 
  financing facilities                                  85.4             90.0             84.0 
--------------------------------------------  ------  -------  ------  -------  ------  -------  --------------------- 
 

*Following Genus entering a new credit facility the definition of net debt was revised alongside the adoption of IFRS 16 'Leases'

Cashflow Measures

 
                                      31 December     31 December       30 June 
                                          2020            2019            2020 
 Cash conversion                      GBPm    GBPm    GBPm    GBPm    GBPm    GBPm   Reference 
----------------------------------  -------  -----  -------  -----  -------  -----  ---------------------------------- 
                                                                                     Note 15 - Notes to the cash flow 
 Cash generated by operations                 45.0            32.9            82.9   statement 
 
 Operating Profit                     35.5            28.1            47.6           Group Income Statement 
 Add back: 
 Net IAS 41 valuation movement on 
  biological assets                  (3.5)           (13.3)          (15.8)          Group Income Statement 
 Amortisation of acquired 
  intangible assets                   3.7             4.0             8.5            Group Income Statement 
 Share-based payment expense          4.3             2.8             5.8            Group Income Statement 
 Exceptional items                    5.1             12.8            19.2           Group Income Statement 
                                    -------         -------         ------- 
 Adjusted operating profit exc JVs            45.1            34.4            65.3   Group Income Statement 
 
 Cash Conversion (%)                          100%            96%             127% 
----------------------------------  -------  -----  -------  -----  -------  -----  ---------------------------------- 
 
 
                                           31 December   31 December   30 June 
                                               2020          2019        2020 
 Free cashflow                                 GBPm          GBPm        GBPm     Reference 
                                          ------------  ------------  -------- 
 Cash generated by operations                 45.0          32.9        82.9     Note 15 - Notes to cashflow statement 
 Interest and tax paid                        (6.9)         (8.8)      (17.1)    Note 15 - Notes to cashflow statement 
 Capital expenditure                         (11.9)        (17.0)      (35.4)    Group Statement of Cashflows 
 Cash received from JV (dividends and 
  loan repayment)                               -            1.4         3.7     Group Statement of Cashflows 
 Other                                         0.4           2.0         1.1     Group Statement of Cashflows 
                                                        ------------  -------- 
 Free cashflow                                26.6          10.5        35.2 
----------------------------------------  ------------  ------------  --------  -------------------------------------- 
 

Other Measures

 
                                                   31 December     31 December      30 June 
                                                       2020            2019           2020 
 Ratio of net debt to Adjusted EBITDA             GBPm    Times   GBPm    Times   GBPm   Times   Reference 
-----------------------------------------------  ------  ------  ------  ------  -----  ------  ---------- 
 Net Debt - 
  as calculated under our financing facilities    85.4            90.0            84.0           See APM 
 
 Rolling 12 month Adjusted EBITDA - 
  as calculated under our financing facilities    108.0           96.5            97.6           See APM 
 
 Ratio of net debt to Adjusted EBITDA                      0.8             0.9            0.9 
-----------------------------------------------  ------  ------  ------  ------  -----  ------  ---------- 
 

[1] Adjusted results are the Alternative Performance Measures ('APMs') used by the Board to monitor underlying performance at a Group and operating segment level, which are applied consistently throughout. These APMs should be considered in addition to, and not as a substitute for or as superior to statutory measures. For more information on APMs, see APM Glossary.

[2] All growth/decline rates quoted are in constant currency unless otherwise stated. Constant currency percentage movements are calculated by restating the results for the six months ended 31 December 2020 at the average exchange rates applied to adjusted operating profit for the year ended 30 June 2020.

   [3]   n/m = not meaningful 

[4] Calculated on a rolling 12 month basis

[5] Excluding profit attributable to non-controlling interest

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