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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 | |
---|---|---|---|---|---|---|---|---|---|---|
14.00 | 0.74% | 1,906.00 | 1,894.00 | 1,906.00 | 1,908.00 | 1,852.00 | 1,852.00 | 8,936 | 13:28:20 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Coml Physical, Biologcl Resh | 689.7M | 33.3M | 0.5043 | 37.79 | 1.26B |
World leader in animal genetics reports strong performance, resilient operations during the COVID-19 pandemic
Strong revenue growth of 13%, with adjusted profit before tax up 22%
Webcast scheduled today, September 8, 2020, at 7:01 AM BST - 2:01 AM EDT
Genus plc (LSE: GNS), a world leading animal genetics company producing superior breeding livestock through genetic improvement, today reported preliminary financial results for the full year ended June 30, 2020, as well as provided a business update on recent corporate developments in its worldwide porcine and bovine genetics businesses. The Company will discuss its corporate, operational and financial highlights on a pre-recorded webcast, scheduled today, Tuesday, September 8, 2020 at 7:01 AM BST, 2:01 AM EDT. A recording of the webcast will be available here and on the Company’s website.
“Genus performed strongly and made substantial strategic progress throughout the 2020 fiscal year. In the second half the Group showed its resilience following the outbreak of the COVID-19 pandemic,” said Stephen Wilson, Genus plc Chief Executive. “Our customers experienced challenges due to the unprecedented market price and demand volatility as protein supply chains were disrupted in some markets. I am proud of the way our people responded and supported our customers through this period. We had to adapt in many ways to ensure that we could continue to supply our customers in the face of extraordinary circumstances, but through the ingenuity and determination of our people we have been able to keep operating uninterrupted during the crisis. This has been achieved while continually focusing on protecting our employees, customers and other stakeholders.”
“Our financial performance in the year was strong, with revenue increasing by 13%, and adjusted profit before tax growing 16% (22% in constant currency), to a record £71.0m.”
“Genus PIC, the Company’s porcine genetics business, was the major contributor to that growth, as it benefited as expected from strong demand in China as large producers expanded to fill the supply shortfall caused by African Swine Fever in 2019. Europe and Latin America also contributed strong growth, resulting in PIC’s adjusted operating profit including joint ventures being 25% higher. Strategically important porcine royalty revenue was up 11% in constant currency, with growth in all regions, contributing to total porcine revenue increasing by 17% in constant currency.”
“Genus ABS, the Company’s bovine genetics business, achieved volume growth of 8% and adjusted operating profit growth of 12% in constant currency. This was driven mainly by the growth in sexed product, with sexed volumes up 47%, and continued growth in the use of beef genetics in dairy herds, with global beef volumes up 17%. ABS benefited from our investment in sales capability and the shift to long-term partnership accounts, particularly in the US. Performance was also particularly strong in Brazil, Russia, India and China.”
“Research and development is the lifeblood of our business and we increased net investment by 19% (17% in constant currency) as planned, largely driven by increased investment in porcine product development as we look to further strengthen our proprietary genetics and build capacity for future growth. We will continue to increase investment in gene editing and our IntelliGen® Technologies production capacity, as well as further developing our R&D pipeline.”
Outlook
“The full impact of COVID-19 on the world economy and consumer incomes remains unclear, although economic forecasts suggest that many sectors will be heavily impacted for some time, creating economic recession in many countries. The pandemic has also caused operational challenges for elements of the animal protein value chain, most notably meat processors in the US which are likely to continue for some time, leading to challenging conditions for some of our customers through at least the remainder of 2020. Greater currency headwinds are also anticipated in FY21. However, Genus’s business model and strategy has again demonstrated its robustness and we anticipate further growth in constant currency in the business in the coming year and to perform in line with our expectations,” concluded Wilson.
Webcast Results Presentation Today
A pre-recorded briefing by management to discuss the preliminary results for the year ended June 30, 2020 will be held via a video webcast facility and will be accessible at the following link from 7:01 AM BST, 2:01 AM EDT today: https://webcasting.buchanan.uk.com/broadcast/5f28011c65023062edd7e24a.
An archived recording of the webcast will also be available on the Investors section of the Company’s website.
Corporate Highlights:
Adjusted results1
Statutory results
Actual currency
Constant currency change2
Actual currency
Year ended 30 June
2020
2019
Change
2020
2019
Change
£m
£m
%
%
£m
£m
%
Revenue
551.4
488.5
13
13
551.4
488.5
13
Operating profit exc. JVs
65.3
57.7
13
16
47.6
8.7
447
Operating profit inc. JVs exc. gene editing
81.2
72.2
12
17
n/a
n/a
n/a
Profit before tax
71.0
61.0
16
22
51.5
9.9
420
Free cash flow
35.2
10.0
252
n/m
3
Basic earnings per share (pence)
85.4
73.2
17
23
62.4
12.4
403
Dividend per share (pence)
29.1
27.7
5
Strong revenue growth of 13% in actual and constant currency2
Very strong adjusted profit before tax (‘PBT’)1, up 22% in constant currency; statutory PBT at £51.5m
Strong cash generation, earnings and dividends, and new revolving credit facility (‘RCF’)
Good strategic progress despite COVID-19
Financial Review
In the year ended 30 June 2020, Genus achieved a strong financial performance whilst operating in unique circumstances during the second half of the financial year caused by the COVID-19 pandemic. The resilience of our operations was reflected in revenue growth of 13% in both constant and actual currency. Adjusted operating profit growth including joint ventures was 22% in constant currency (17% in actual currency). Notably, this was after a significant planned increase in R&D investment of 17% in constant currency (19% in actual currency to £65.2m) primarily to fund expansion in our porcine nucleus herds. Excluding gene editing costs, adjusted operating profit including joint ventures increased by 17% in constant currency and adjusted profit before tax was up 22% (16% in actual currency).
On a statutory basis, profit before tax was £51.5m (2019: £9.9m). The difference between statutory and adjusted profit before tax principally reflected the uplift in the non-cash fair value net IAS 41 biological asset movement versus a decrease last year. Basic earnings per share on a statutory basis were 62.4 pence (2019: 12.4 pence).
The effect of exchange rate movements on the translation of our overseas profits was to reduce the Group’s adjusted profit before tax for the year by £3.4m compared with 2019, primarily from weakness in Latin American currencies. All growth rates quoted are in constant currency unless otherwise stated. Constant currency percentage movements are calculated by restating the results for the year ended 30 June 2020 at the average exchange rates applied to adjusted operating profit for the year ended 30 June 2019.
Earnings Per Share
Adjusted basic earnings per share increased by 17% (23% in constant currency) to 85.4 pence (2019: 73.2 pence) as a result of the strong trading performance and lower tax rate. Basic earnings per share on a statutory basis were 62.4 pence (2019: 12.4 pence), reflecting the strong trading performance and an uplift in the non-cash fair value net IAS 41 biological asset movement.
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.
Forward-looking Statements
This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Announcement. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook", "will" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, diverse factors such as domestic and global economic business conditions, market-related risks such as fluctuations in commodity prices, interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the rate of on-going porcine re-stocking in China after African Swine Fever, the continued development and improvement of our IntelliGen® technology, the development and registration of our innovative new products, such as our gene edited porcine reproductive and respiratory syndrome virus resistant pigs, the continued growth in emerging markets, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. Information contained in this Announcement should not be relied upon as a guide to the Company's future performance.
Group Income Statement
Genus plc
For the year ended 30 June 2020
2020
£m
2019
£m
REVENUE
551.4
488.5
Adjusted Operating Profit
65.3
57.7
Adjusting items:
- Net IAS 41 valuation movement on biological assets
15.8
(14.7)
- Amortisation of acquired intangible assets
(8.5)
(9.5)
- Share-based payment expense
(5.8)
(3.0)
1.5
(27.2)
- Exceptional items:
- Litigation
(16.4)
(5.0)
- Acquisition and integration
(2.1)
(0.7)
- Other
(0.7)
(0.9)
- Pension related
-
(15.2)
Total exceptional items
(19.2)
(21.8)
Total adjusting items
(17.7)
(49.0)
OPERATING PROFIT
47.6
8.7
Share of post-tax profit of joint ventures and associates retained
8.9
5.1
Finance costs
(5.3)
(4.7)
Finance income
0.3
0.8
PROFIT BEFORE TAX
51.5
9.9
Taxation
(10.6)
(3.2)
PROFIT FOR THE YEAR
40.9
6.7
ATTRIBUTABLE TO:
Owners of the Company
40.5
7.8
Non-controlling interest
0.4
(1.1)
40.9
6.7
EARNINGS PER SHARE
Basic earnings per share
62.4p
12.4p
Diluted earnings per share
61.9p
11.9p
Alternative Performance Measures
Adjusted operating profit
65.3
57.7
Adjusted operating profit attributable to non-controlling interest
(0.6)
(0.4)
Pre-tax share of profits from joint ventures and associates excluding net IAS 41
valuation movement
11.3
7.6
Gene editing costs
5.2
7.3
Adjusted operating profit including joint ventures and associates, excluding gene editing costs
81.2
72.2
Gene editing costs
(5.2)
(7.3)
Adjusted operating profit including joint ventures and associates
76.0
64.9
Net finance costs
(5.0)
(3.9)
ADJUSTED PROFIT BEFORE TAX
71.0
61.0
ADJUSTED EARNINGS PER SHARE
Basic adjusted earnings per share
85.4p
73.2p
Diluted adjusted earnings per share
84.7p
70.7p
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 superior to them.
Group Statement of Comprehensive Income
Genus plc
For the year ended 30 June 2020
2020
£m
2020
£m
2019
£m
2019
£m
PROFIT FOR THE YEAR
40.9
6.7
Items that may be reclassified subsequently to profit or loss
Foreign exchange translation differences
(4.9)
19.7
Fair value movement on net investment hedges
(0.1)
(1.6)
Fair value movement on cash flow hedges
(0.4)
(2.2)
Tax relating to components of other comprehensive income
(1.4)
(2.5)
(6.8)
13.4
Items that may not be reclassified subsequently to profit or loss
Actuarial loss on retirement benefit obligations
(16.6)
(5.4)
Movement on pension asset recognition restriction
10.4
(10.1)
Release of additional pension liability
4.7
34.5
Tax relating to components of other comprehensive
expense/(income)
0.8
(3.2)
(0.7)
15.8
OTHER COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR
(7.5)
29.2
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
33.4
35.9
ATTRIBUTABLE TO:
Owners of the Company
33.1
37.1
Non-controlling interest
0.3
(1.2)
33.4
35.9
Group Statement of Changes in Equity
Genus plc
For the year ended 30 June 2020
Called up share capital
£m
Share premium account
£m
Own shares
£m
Trans-lation reserve
£m
Hedging reserve
£m
Retained earnings
£m
Total
£m
Non- controlling interest
£m
Total equity
£m
BALANCE AT 30 JUNE 2018
(as previously reported)
6.2
112.8
(0.1)
20.5
2.0
275.2
416.6
2.5
419.1
Prior period restatement
-
-
-
-
-
(15.2)
(15.2)
-
(15.2)
BALANCE AT 30 JUNE 2018 (restated)
6.2
112.8
(0.1)
20.5
2.0
260.0
401.4
2.5
403.9
Foreign exchange translation
differences, net of tax
-
-
-
16.6
-
-
16.6
(0.1)
16.5
Fair value movement on net
investment hedges, net of tax
-
-
-
(1.3)
-
-
(1.3)
-
(1.3)
Fair value movement on cash flow hedges, net of tax
-
-
-
-
(1.8)
-
(1.8)
-
(1.8)
Actuarial gain on retirement
benefit obligations, net of tax
-
-
-
-
-
(4.6)
(4.6)
-
(4.6)
Movement on pension asset recognition restriction, net of tax
-
-
-
-
-
(8.3)
(8.3)
-
(8.3)
Recognition of additional pension liability, net of tax
-
-
-
-
-
28.7
28.7
-
28.7
Other comprehensive (expense)/income for the year
-
-
-
15.3
(1.8)
15.8
29.3
(0.1)
29.2
Profit for the year
-
-
-
-
-
7.8
7.8
(1.1)
6.7
Total comprehensive income for the year
-
-
-
15.3
(1.8)
23.6
37.1
(1.2)
35.9
Recognition of share-based payments, net of tax
-
-
-
-
-
0.2
0.2
-
0.2
Adjustment arising from change in non-controlling interest and written put option
-
-
-
-
-
-
-
(2.6)
(2.6)
Dividends
-
-
-
-
-
(16.8)
(16.8)
-
(16.8)
Issue of ordinary shares
0.3
66.2
-
-
-
-
66.5
-
66.5
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 income/(expense) 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
-
-
-
-
-
(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
Group Balance Sheet
Genus plc
As at 30 June 2020
2020
£m
*(restated)
2019 £m
*(restated)
2018 £m
ASSETS
Goodwill
105.6
106.3
102.0
Other intangible assets
76.2
80.1
78.7
Biological assets
310.1
287.1
285.3
Property, plant and equipment
117.9
86.0
76.9
Interests in joint ventures and associates
22.7
23.6
19.9
Other investments
6.9
7.4
5.9
Derivative financial assets
-
0.4
0.3
Other receivables
1.8
-
-
Deferred tax assets
3.7
3.5
4.3
TOTAL NON-CURRENT ASSETS
644.9
594.4
573.3
Inventories
37.4
36.0
34.2
Biological assets
39.8
40.1
37.0
Trade and other receivables
100.8
98.0
91.0
Cash and cash equivalents
41.3
30.5
29.1
Income tax receivable
3.1
3.3
1.4
Derivative financial assets
1.2
1.1
2.5
Asset held for sale
0.2
0.2
0.2
TOTAL CURRENT ASSETS
223.8
209.2
195.4
TOTAL ASSETS
868.7
803.6
768.7
LIABILITIES
Trade and other payables
(95.0)
(87.7)
(83.7)
Interest-bearing loans and borrowings
(9.2)
(2.1)
(13.4)
Provisions
(4.0)
(3.1)
(2.8)
Deferred consideration
(7.5)
(2.0)
(19.3)
Obligations under leases
(10.0)
(2.2)
(1.4)
Tax liabilities
(4.0)
(6.1)
(4.4)
Derivative financial liabilities
(0.5)
(1.0)
(0.3)
TOTAL CURRENT LIABILITIES
(130.2)
(104.2)
(125.3)
Trade and other payables
(3.3)
-
-
Interest-bearing loans and borrowings
(103.6)
(101.9)
(120.7)
Retirement benefit obligations
(18.1)
(24.2)
(33.9)
Provisions
(11.8)
(5.7)
(4.5)
Deferred consideration
(1.2)
(4.2)
(4.2)
Income tax liability
-
-
(0.9)
Deferred tax liabilities
(65.5)
(66.7)
(69.5)
Derivative financial liabilities
(6.1)
(5.7)
(3.7)
Obligations under leases
(21.1)
(3.9)
(2.1)
TOTAL NON-CURRENT LIABILITIES
(230.7)
(212.3)
(239.5)
TOTAL LIABILITIES
(360.9)
(316.5)
(364.8)
NET ASSETS
507.8
487.1
403.9
2020
£m
*(restated)
2019 £m
*(restated)
2018
£m
EQUITY
Called up share capital
6.5
6.5
6.2
Share premium account
179.1
179.0
112.8
Own shares
(0.1)
(0.1)
(0.1)
Translation reserve
29.5
35.8
20.5
Hedging reserve
(0.2)
0.2
2.0
Retained earnings
294.0
267.0
260.0
Equity attributable to owners of the Company
508.8
488.4
401.4
Non-controlling interest
4.6
4.2
5.7
Put option over non-controlling interest
(5.6)
(5.5)
(3.2)
Total non-controlling interest
(1.0)
(1.3)
2.5
TOTAL EQUITY
507.8
487.1
403.9
* Restatement in the 2019 and 2018 balance sheet
During the period, it was discovered that an input used in the valuation of biological assets in preceding periods was not in line with operational data.
Accordingly, the prior period balance sheets at 30 June 2019 and 30 June 2018 have been restated in accordance with IAS 8, and, in accordance with IAS 1 (revised). A balance sheet at 30 June 2018 is also presented together with related notes. The restatements involved are a reduction in Biological assets at 30 June 2019 and 30 June 2018 of £20.5m and a reduction in related deferred tax liabilities at 30 June 2019 and 30 June 2018 of £5.3m.
Impact on the Group’s balance sheet for year ended 30 June 2019
(as reported)
2019
£m
Impact of restatement
£m
(restated)
2019
£m
Non-current assets
Biological assets
307.6
(20.5)
287.1
Current liabilities
Deferred tax liabilities
(72.0)
5.3
(66.7)
Net assets
502.3
(15.2)
487.1
For the year ended 30 June 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.
Group Statement of Cash Flows
Genus plc
For the year ended 30 June 2020
2020
£m
2019
£m
NET CASH FLOW FROM OPERATING ACTIVITIES
65.8
33.4
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received from joint ventures and associates
2.5
2.7
Joint venture loan repayment
1.2
0.7
Disposal of joint venture
3.8
-
Acquisition of joint venture
(2.2)
-
Acquisition of trade and assets
-
(2.0)
Disposal of subsidiary
-
0.4
Payment of deferred consideration
(1.7)
(21.1)
Purchase of property, plant and equipment
(24.6)
(17.1)
Purchase of intangible assets
(10.8)
(11.2)
Proceeds from sale of property, plant and equipment
1.1
1.5
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
(30.7)
(46.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of borrowings
80.0
104.8
Repayment of borrowings
(73.8)
(138.9)
Payment of lease liabilities
(11.1)
(2.0)
Equity dividends paid
(18.3)
(16.8)
Issue of ordinary shares
0.1
66.5
NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES
(23.1)
13.6
NET INCREASE IN CASH AND CASH EQUIVALENTS
12.0
0.9
Cash and cash equivalents at start of the year
30.5
29.1
Net increase in cash and cash equivalents
12.0
0.9
Effect of exchange rate fluctuations on cash and cash
(1.2)
0.5
equivalents
TOTAL CASH AND CASH EQUIVALENTS AT 30 JUNE
41.3
30.5
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.
2 All growth rates quoted are in constant currency unless otherwise stated. Constant currency percentage movements are calculated by restating the results for the year ended 30 June 2020 at the average exchange rates applied to adjusted operating profit for the year ended 30 June 2019.
3 n/m = not meaningful
View source version on businesswire.com: https://www.businesswire.com/news/home/20200907005419/en/
Genus plc Stephen Wilson, Chief Executive Officer Alison Henriksen, Chief Financial Officer Tel: +44 1256 345970
Investor Relations and Media Contacts: United Kingdom Buchanan Charles Ryland / Chris Lane / Charlotte Slater Tel: +44 207 466 5000
United States LaVoieHealthScience Donna LaVoie / Sharon Choe / Paul Sagan Tel: +1 617-374-8800 psagan@lavoiehealthscience.com
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