TIDMGNS
RNS Number : 8122A
Genus PLC
25 February 2014
For immediate release 25 February 2014
Genus plc
Interim Results for the six months ended 31 December 2013
Continued Strategic Progress
Genus plc (the "Company" or the "Group"), a leading animal
genetics company, announces its results for the six months ended 31
December 2013.
Actual currency Constant currency+
------------------ -----------
Six months ended 31 December 2013 2012** Movement Movement
GBPm GBPm % %
Adjusted Results
Revenue 181.7 167.2 +9 +10
Operating profit* 22.3 22.3 - +2
Operating profit inc
JV* 23.4 23.5 - +2
Profit before tax* 20.6 20.6 - +2
Basic earnings per share
(p)* 24.6 23.6 +4 +6
Statutory Results
Revenue 181.7 167.2 +9
Operating profit 23.3 24.3 (4)
Profit before tax 22.0 22.3 (1)
Basic earnings per share
(p) 28.4 25.6 +11
Interim dividend per
share (p) 5.5 5.0 +10
* Adjusted operating profit, adjusted profit before tax and
adjusted basic earnings per share are before net IAS 41 valuation
movement on biological assets, amortisation of acquired intangible
assets, share-based payment expense and exceptional items. These
are the measures used by the Board to monitor underlying
performance.
+ Constant currency percentage movements are calculated by
restating 2013 results at the average exchange rates applied in
2012.
** 2012 results have been restated for the amendments to IAS 19
see note 2.
BUSINESS HIGHLIGHTS
-- Revenue of GBP181.7m (2012: GBP167.2m), an increase of 9% in
actual currency (10% in constant currency) driven by growth in
Genus PIC, an initial contribution from the acquisition of
Génétiporc and a much improved performance in Genus ABS:
o Porcine volumes up 7%, led by strong growth in the Americas
(including Génétiporc) and Asia
o Bovine sales volumes 4% higher, with strong increases in Latin
America following the difficult weather conditions in the prior
year
-- Adjusted operating profit including joint ventures little
changed at GBP23.4m (up 2% in constant currency), with growth in
Genus PIC and ABS offset by lower results in China as expected as
the investment cycle there progresses:
o Genus PIC profits up 6% (6% in constant currency) with a
strong contribution from Latin America
o Genus ABS profits up 13% (15% in constant currency) with all
regions growing, particularly Latin America
o Genus Asia 45% lower (41% in constant currency), principally
due to the expected investment costs associated with capacity
expansion in the China porcine market
o Research and development costs down 1% (up 1% in constant
currency)
-- Adjusted earnings per share ahead at 24.6 pence (2012: 23.6
pence), up 4% in actual currency (6% in constant currency)
-- Cash inflow from operating activities of GBP11.2m,
substantially ahead of the prior year (2012: GBP1.5m), and net debt
of GBP79.9m after the acquisition of Génétiporc and completion of
the investment in the Besun joint venture
-- Interim dividend increased to 5.5 pence per share payable on 28 March 2014
-- Continuing good progress in implementation of strategy:
o Génétiporc porcine acquisition completed in October and
Génétiporc do Brasil acquired by our 49% joint venture, Agroceres
PIC, in February 2014, further strengthening our position in the
Americas and adding valuable complementary genetics
o Bovine production joint venture announced in India with B G
Chitale, the largest dairy processor in Maharashtra, to increase
our capacity in this large market
o Memorandum of Understanding signed with large pig producer in
China for new porcine joint venture
o Continued focus and investment in research & development
led by Dr Jonathan Lightner, the new Chief Scientific Officer
Karim Bitar, Chief Executive, commented:
"As expected, our results in the first half reflected a good
performance in PIC and ABS. While results in Asia and specifically
China were impacted by the planned investments in expanding our
porcine capacity compared with the strong prior year, the
significant expansion of our capacity in China positions us to take
advantage of the considerable growth opportunities in the
region.
"We are also pleased to have successfully completed the
acquisition of Génétiporc and are making rapid progress with its
integration into PIC, which is on track. We continue active
discussions with a number of companies in China to create further
porcine joint ventures to expand our capacity in the market and
signed an MOU with a large pig producer during the first half.
"While we face near term headwinds from the strengthening of
sterling and from a virus that is new in the North American porcine
industry, our confidence in the strategy for the business and in
the future prospects for the Company is reflected in the ten
percent increase in our interim dividend."
An analyst meeting will be held at 9.00am today at Buchanan's
offices (107 Cheapside, London EC2V 6DN). A live audio feed will be
available to those unable to attend this meeting in person. To
connect to the web cast facility, please go to the following link:
http://mediaserve.buchanan.uk.com/2014/genus250214/registration.asp
approximately 10 minutes (8.50am) before the start of the
meeting.
For further information please contact:
Genus plc Tel: 01256 345970
Karim Bitar, Chief Executive
Stephen Wilson, Group Finance Director
Buchanan Tel: 0207 466 5000
Charles Ryland /Sophie McNulty
This announcement is available on the Genus website
www.genusplc.com
About Genus
Genus creates advances to animal breeding and genetic
improvement by applying biotechnology and sells added value
products for livestock farming and food producers. Its technology
is applicable across all livestock species and is currently
commercialised by Genus in the dairy, beef and pork food production
sectors.
Genus's worldwide sales are made in seventy countries under the
trademarks "ABS" (dairy and beef cattle) and "PIC" (pigs) and
comprise semen and breeding animals with superior genetics to those
animals currently in production. Genus's customers' animals produce
offspring with greater production efficiency, and quality, and use
these to supply the global dairy and meat supply chain.
The Group's competitive edge has been created 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.
GROUP PERFORMANCE
Genus's results for the six months to 31 December 2013 showed
growth in constant currency across all measures. In actual
currency, adjusted profit before tax was unchanged from the prior
year but adjusted earnings per share were up 4% at 24.6 pence per
share (2012: 23.6 pence). In addition, Genus has made good progress
in implementing its growth strategy.
RESULTS
Revenue of GBP181.7m for the six months to 31 December 2013 grew
by 9% (2012: GBP167.2m). This reflects underlying constant currency
growth of 10% offset by the impact of sterling appreciation.
Porcine volumes were up 7%, driven by strong growth in Asia and the
Americas including the initial contribution from Génétiporc, whilst
bovine volumes were up 4% on strong volume growth in Latin America
following the adverse weather conditions of the previous year.
Adjusted operating profit including joint ventures was little
changed at GBP23.4m (up 2% in constant currency). Genus PIC and
Genus ABS performed strongly with profit increases of 6% and 13%
respectively. Against a strong comparative which had benefited from
initial stocking profits at the new Besun joint venture, as
expected, Genus Asia's profits were held back by the planned
start-up costs at Besun and the Chun Hua genetic nucleus farm. In
addition, performance in bovine in Asia was down on lower semen
volumes in China and mixed results in other Asian markets.
Operating profits in Asia were 45% lower overall.
Finance costs were GBP2.8m (2012: GBP2.9m), as reduced interest
rates offset higher net borrowings. These costs have been restated
for the adoption of IAS 19 (revised). Adjusted profit before tax
was GBP20.6m, unchanged from last year in actual currency but up 2%
in constant currency. With the benefit of a lower tax rate of 27.7%
from more efficient tax management compared with 31.1% last year,
adjusted earnings per share rose 4% (6% in constant currency) to
24.6 pence (2012: 23.6 pence).
The Group monitors performance principally through these
adjusted profit measures which exclude certain non-cash items
including the fair value movement on biological assets. The
statutory results, including these items, show a 1% reduction in
profit before tax to GBP22.0m (2012: GBP22.3m) and an 11% increase
in earnings per share to 28.4 pence (2012: 25.6 pence). This
increase in statutory earnings per share results from lower UK
statutory tax rates applied to the deferred tax liabilities on
biological assets and intangible assets.
Cash Flow and Net Debt
The Group had a cash inflow from operating activities of
GBP11.2m in the period (2012: GBP1.5m) due to improved working
capital management and the payment, as expected, of accounts
receivable from Besun. Investments totalled GBP36.3m (2012:
GBP3.7m), including the acquisition of Génétiporc for GBP22.4m, a
capital increase in Agroceres PIC of GBP2.4m to fund the purchase
of Génétiporc do Brasil, and an investment of GBP8.8m in the Besun
joint venture during the period. Net debt at 31 December 2013 was
GBP79.9m (31 December 2012: GBP63.9m) after these investments, and
the balance sheet remains strong with net debt to EBITDA of 1.5
times (31 December 2012: 1.2 times).
Dividend
Based on its confidence in the Company's strategy and growth
prospects, the Board has approved an interim dividend of 5.5 pence
per share, an increase of 10% on last year's interim dividend of
5.0 pence. The interim dividend is payable on 28 March 2014 to
those shareholders on the register at 7 March 2014.
Progress on Strategy
Genus completed the acquisition of Génétiporc, a leading porcine
genetics business in North and Latin America, in October 2013 for
GBP22.2m. In addition, Agroceres PIC, Genus's 49% joint venture in
Brazil, acquired Génétiporc do Brasil in February 2014 for GBP4.9m.
Génétiporc's complementary product portfolio expands PIC's genetic
diversity and supports future global product development. The
combination of the business with PIC brings significant
opportunities to offer an enhanced service to an enlarged customer
base and the broadened supply chain supports PIC's future growth.
We are on track to realise annualised synergies of $11m (GBP6.7m)
over the first two years.
There has been further progress on the Company's strategy to
expand capacity in the important Chinese porcine market. During the
first half, we commenced sales of the first animals from the Besun
joint venture and will start sales from the 100% owned Chun Hua
nucleus farm in the second half of the fiscal year. Shennong, our
second porcine joint venture partner in China announced last year,
has identified suitable land for the construction of the joint
venture farm. We continue positive discussions with a number of
other significant companies in China for further joint ventures and
signed a memorandum of understanding with a large pig producer
during the first half of the year.
Genus ABS has continued to build its presence in the large
Indian dairy market in the first half. During the period we made
the first sales of high quality genomic semen from the bulls which
originated from North American embryos imported into India. In
addition, we formed a production joint venture with B G Chitale,
the largest dairy processor in Maharashtra, which will
significantly increase our capacity to produce high quality semen
in India.
Initiatives to improve product differentiation have included
completing the implementation of our single-step genomic evaluation
across the porcine development programme for all traits under
selection during the first quarter. We believe we are leading the
industry in developing these techniques, which are now also being
applied through our common scientific computing infrastructure in
bovine product development, enabling the introduction of our
proprietary tailored customer indices (Real World Data(TM)). There
are now over 2,500 ABS bulls evaluated for the monthly Real World
Data bull fertility evaluations based on data from more than 15
million cows and over 1,000 herds. New indices of economically
important traits will be launched in the second half of the fiscal
year.
People
Saskia Korink, who joined the Group in January 2013 as Chief
Marketing Officer, has been appointed Chief Operating Officer of
Genus ABS after a short period acting in that role. During the half
year, Dr. Denny Funk retired as Chief R&D and Scientific
Officer, after a successful career with Genus spanning 18 years. He
has been succeeded in that role by Dr. Jonathan Lightner who was
previously Vice President of Agricultural Biotechnology at DuPont
Pioneer.
Outlook
Market conditions for Genus's customers have improved in terms
of input costs and output prices and progress has been made towards
our strategic goals including the acquisition of Génétiporc.
Although trading was in line with our expectations for the first
half of the year, Genus faces short-term headwinds from the
currency appreciation of sterling and a virus([1]) in the North
American porcine industry which will negatively affect porcine
revenues in the near term. These factors introduce more uncertainty
to our second half outlook. However, as a sign of the Board's
confidence in the Group's future prospects, and the success of our
strategy in driving underlying trading, the interim dividend has
been raised by 10%.
[1] Porcine epidemic diarrhoea virus (PEDv) is a virus that has
been prevalent in Asia for some time that has now reached the North
American porcine industry for the first time. Affected herds
experience a loss of 5-6 weeks of pig production as piglets die.
Older animals including sows acquire immunity, though longer-term
impacts on herd productivity are still somewhat uncertain. PEDv has
been spreading rapidly and has been reported in large numbers of
sites. It is estimated that over 30% of the US sow herd has been
affected, reducing farmers' pig production (on which Genus receives
royalties) and disrupting expansion plans.
REVIEW OF OPERATIONS
Genus PIC
Actual Currency Constant Currency
________________________________
2013 2012 Movement Movement
GBPm GBPm % %
Revenue 72.9 64.4 13 12
Adjusted operating
profit exc joint venture
('JV') 25.1 23.6 6 6
Adjusted operating
profit inc JV 26.1 24.6 6 6
Adjusted operating
margin exc JV 34% 37%
Genus PIC comprises the Group's porcine business in North
America, Latin America and Europe. It also includes the technical
services and supply chain functions supporting the porcine business
globally.
Market
Market conditions across the businesses improved through the six
months with declining feed costs following good harvests. In the
important North American markets, producer margins have been
positive. Lean hog prices were higher than the previous year,
although they did decline from the summer highs, and slaughter
weights were on average 5lbs higher than a year ago. Since the
summer, there has been a rapid spread of porcine epidemic diarrhoea
virus (PEDv) throughout the North American industry. It is
estimated that over 30% of the US sow herd has now been infected
and the pace of outbreaks is continuing to accelerate. Infected
herds typically lose 5-6 weeks of pig production before herds
acquire immunity. In Latin America, feed prices have reduced in all
territories and hog prices increased particularly in Brazil. In
Europe, pig prices fell off towards the end of the year, however
margins for producers were still positive.
Performance
During the period, Genus PIC performed strongly with operating
profits including joint ventures up 6% to GBP26.1m on revenue
growth of 13% to GBP72.9m. Volumes grew by 3%, with strong growth
in North and Latin America, but volumes declined in Europe as we
continued to exit the parent gilt business and move to a
royalty-based model. Overall, operating margins declined to 34%
(2012: 37%) due to the initially dilutive effect of the Génétiporc
acquisition prior to the execution of cost synergies. The initial
integration of Génétiporc has progressed rapidly and we are pleased
with customer reactions. Delivery of the expected $11m (GBP6.7m)
per annum of synergies over the first two years is on track.
In North America, profits were up 2% in constant currency on
volume growth of 7% driven by strong royalty income from improved
performances across our customer base, enhanced by additional CBV
Max royalties, and the initial two months of sales from Génétiporc.
However, looking forward there is increased risk to near term
results from the impact of PEDv on producers.
Latin American margins improved through the first half as the
region further benefited from the transition to royalty contracts,
and profits increased by 25% in constant currency on the same
period last year, driven in particular by Mexico which benefited
from its focus on growing key accounts. In Brazil, profits rose by
19% in constant currency, as we executed the PIC global strategy
there, including successfully launching CBV Max, supported by
additional high index AI boar availability from Agroceres PIC's
investment in a new boar stud.
The European region is re-focusing its product offering,
supported by the Genus PIC global business unit and locally
appointed technical services directors. We are actively marketing
these new products to key integrated pork producers and engaging in
product validation trials. A premium boar line (CBV) was
successfully launched in Germany. During this half year, profits
were down 11% in constant currency and volumes were down 13%.
PIC has achieved progress against its strategic objectives for
the year. Genetic control and product differentiation is
accelerating through the successful full implementation of a
single-step genomic evaluation for all populations and traits - a
first in the porcine industry. Two new terminal sire products
focused on global markets requiring high robustness have entered
commercial test. We are targeting key markets through bespoke
account plans for our top 80 customers globally and continuing to
pursue implementation of best practice in all countries. Core
competencies have been strengthened during the period by more than
doubling the product validation trials underway with customers.
Genus ABS
Actual Currency Constant Currency
________________________________
2013 2012 Movement Movement
GBPm GBPm % %
Revenue 77.9 70.0 11 13
Adjusted operating
profit 12.4 11.0 13 15
Adjusted operating
margin 16% 16%
Genus ABS comprises the Group's dairy and beef businesses in
North America, Latin America and Europe. It also includes the
technical services, marketing, production and supply chain
functions supporting the dairy and beef businesses globally.
Market
The last six months have seen the stabilisation and subsequent
steady decline of customer input costs and recovering milk prices,
giving rise to improved customer profitability and restored
confidence. There has been no repeat of the severe weather
conditions experienced last year. The current outlook for the
remainder of FY14 looks favourable, with projected milk to feed
ratios set to remain strong.
Performance
Genus ABS revenues were up 11% for the half year at GBP77.9m (up
13% in constant currency) and profits increased by 13% to GBP12.4m
(an increase of 15% in constant currency). Volumes were up 6% on
last year and operating profit margin was maintained at 16%, as
customer confidence continues to improve, a trend first being seen
during the fourth quarter of FY13.
North America profits increased 4% in constant currency on
volumes that declined 3% on last year, leveraging growth of the
InFocus (beef on dairy) initiatives as well as ancillary products
such as udder care. There has been continued focus on expense
efficiencies and on increasing non-semen revenues.
In Latin America, profits increased 19% in constant currency and
volumes by 18%, driven by very strong performances in Brazil and
Mexico. Brazil achieved record beef sales, with profits 30% up in
constant currency on last year, with the country returning to a
normal beef season after last year's severe weather conditions.
Mexico continued a steady growth trend first seen during the third
quarter of last year, with profits up 25% in constant currency on
last year driven by conventional dairy volume growth.
Europe's volumes were 1% ahead of last year, but profits grew by
6% in constant currency, mainly through trading in the UK, which
benefited from solid conventional dairy and sorted sales as well as
strong service and product offerings. Solid trading was also
evident in Italy and France, offsetting some challenges in the
European distributor network.
Genus ABS strengthened its genetic line up in proven bulls,
genomic bulls and its recently initiated elite female programme. In
parallel, it has continued to develop its Real World Data(TM) (RWD)
platform and will introduce new indices in the second half. It is
using these indices to pioneer new selling approaches in key
geographies based on recently completed customer segmentation. Work
has continued to ensure best practice is shared across the global
dairy and beef businesses, with the approach to technical services
being standardised across the Group. Additionally, Genus ABS has
invested in its marketing and supply chain functions in the period
to ensure full optimisation of product across the globe.
Genus Asia
Actual Currency Constant
__________________________________ Currency
2013 2012 Movement Movement
GBPm GBPm % %
Revenue 24.4 28.3 (14) (10)
Adjusted operating
profit exc joint venture
('JV') 3.8 6.9 (45) (40)
Adjusted operating
profit inc JV 3.9 7.1 (45) (41)
Adjusted operating
margin exc JV 16% 24%
Genus Asia includes the porcine, dairy and beef businesses
across the region. In addition to the businesses in China, the
Philippines and India, the region also includes the Group's
operations in Russia and Australia.
Market
Market conditions across the region have been generally
favourable for producers. Higher pork prices in Russia saw producer
profitability and confidence return to the sector. In China, demand
for high quality genetics is increasing as the market consolidates
and slaughter prices increased through the period. Elsewhere across
the region, pig prices continued to be favourable compared with
last year. In bovine, milk prices in China continued an upward
trend as further consolidation in the dairy processing market, and
reduction in backyard milk production, continued through the
period. However, semen prices in China were under competitive
pressure in the period. In Russia, the number of dairy cows fell
year on year, pushing milk prices up and returning profitability to
the sector. Climatic conditions improved on last year in Australia,
but buying behaviour in the bovine industry there continued to be
overshadowed by prior year losses.
Performance
Genus Asia's profits decreased in the period by 45% to GBP3.9m
(41% in constant currency) on a revenue decline of 14%, with
results in China causing both the revenue and profit decline. In
China, porcine grandparent gilt sales in the period increased 37%
on last year and a strong order book has been established for the
second half. However, this was more than offset by the expected
start-up costs on the Besun joint venture farm and the Chun Hua
genetic nucleus farm ahead of them reaching full capacity. In
addition, the prior year had benefited from revenues and profits
associated with the initial stocking of the Besun farm.
Overall, volume growth in Asia porcine was 26% up on last year.
In Russia, volumes grew by 49% on last year generating a profit
improvement of 30% in constant currency, mainly through higher
direct sales to key accounts and from a greater contribution of
royalty income which rose to 37% of the total gross margin (2012:
27%). In the Philippines, year on year profit growth was 65% in
constant currency, as further successful transition to the royalty
model continued through the period. Despite the positive
performance in Russia and the Philippines, Asia's porcine profits
were down 31% in constant currency due to the planned costs
associated with strengthening the China supply chain for future
growth.
In bovine, the region's profits were down 38% in constant
currency on volumes that were flat on last year. While results were
mixed across other countries, profits and volumes in China were the
most affected in the region during this period as competitive
pressure in the market increased. In order to sell more effectively
to the growing enterprise and large commercial segment in China, we
have made a number of changes. We have moved to a non-exclusive
bull supply and distribution agreement with SK-Xing, and as a
result are starting to work directly with several 'tier one'
customers and made the first direct sales during the second
quarter. We continue to review our approach to penetrate further
the China bovine market.
In Australia, the poor market conditions reported last year
adversely impacted semen spend through the first half of this year.
We restructured this business during the period to provide clearer
focus and lower expenses in the future. India achieved 23% volume
growth during the first half and price improvement of 22%, as it
continues to establish product differentiation in this vast market
with an increased genomic offering and best-in-class bulls. A
production joint venture with B G Chitale, the largest dairy
producer in Maharashtra, was signed in November to expand our
capacity to serve the market with high quality genetics.
We have continued to strengthen both the bovine and porcine
management teams in the Asia region, with an emphasis on key
account management and technical service support. Genetic
dissemination in the region has been accelerated and our new farms
in China are operationally on track to reach full production
capacity in mid-2014. We continue active joint venture discussions
with a number of other companies in China and have signed a
memorandum of understanding with a large pig producer.
Research and Product Development
Actual Currency Constant Currency
________________________________
2013 2012 Movement Movement
GBPm GBPm % %
Research 1.4 1.2 (17) (17)
Porcine product
development 7.0 7.6 8 8
Bovine product development 5.9 5.6 (5) (9)
---------- ----------
14.3 14.4 1 (1)
Overall, investment in research and development for the half
year decreased by 1% to GBP14.3m (up 1% in constant currency), with
increased investment in core research (up 17%). Porcine product
development costs reduced as feed costs fell and slaughter
by-product prices increased. Bovine product development costs
increased as we invested in Real World Data (TM) (RWD) and bovine
genomics.
Investment in research is centred around three core platforms
aimed at accelerating our competitive lead: disease resilience,
gender skewing and genomic selection. In disease resilience, we are
working on projects to deliver animals that are more robust and
less affected by diseases such as porcine reproductive and
respiratory syndrome (PRRS). Genus has embarked on a multi-year
collaborative research agreement with The Roslin Institute and the
University of Edinburgh to support this approach.
In porcine product development, significant progress has been
made in implementing single-step genomic evaluation, where we
believe Genus is leading the industry in the application of these
techniques. Implementation is significantly improving selection
accuracy and as a result, the rate of genetic progress.
In dairy product development, our successful launch of
proprietary customer-tailored indices (RWD) for our enterprise and
large commercial customers is accelerating. The elite female
programme was initiated this year and is on track, producing more
than 70 confirmed pregnancies and our first offspring have been
born and are being genotyped. In beef product development, we are
extending our genetic expertise to accelerating the genetic
progress in beef cattle in order to address unique customer
needs.
Genus Products
Constant
Actual Currency Currency
2013 2012 Movement Movement
GBPm GBPm % %
Revenue
Porcine 89.4 81.8 9 9
Bovine 85.8 80.9 6 8
Research & product development 6.5 4.5
181.7 167.2
Adjusted operating profit
inc JV
Porcine 21.2 20.4 4 5
Bovine 8.4 9.1 (8) (5)
Research & central costs (6.2) (6.0)
23.4 23.5
Genus manages its global operations through the three
businesses, Genus PIC, Genus ABS and Genus Asia, but also monitors
product performance globally, after allocating product development
costs specific to each species.
Porcine revenue grew 9% overall on volume growth of 7% for the
Group. The initial results from Génétiporc contributed to these
increases but, as expected, were dilutive to margins ahead of the
delivery of planned synergies. Margins were also affected by
start-up losses in Besun and the Chun Hua nucleus farms, compared
with Besun stocking profits in the prior period. Overall, profits
rose by 4% (5% in constant currency) with solid growth in North and
Latin America offsetting the investment costs in China.
In bovine, volumes rose 4% overall with particularly strong
growth in Brazil, due to strong beef season demand, and in India,
where currently selling prices are low. Revenue grew by 6% (up 8%
in constant currency). Profits decreased by 8% at GBP8.4m (5% lower
in constant currency), with the increases in North and Latin
America and Europe offset by the tough trading conditions in
Asia.
PRINCIPAL RISKS AND UNCERTAINTIES
Our 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 2013 (a copy of which is
available on the Genus plc website at www.genusplc.com) sets out a
number of risks and uncertainties that might impact upon the
performance of the Group. The principal risks and uncertainties are
set out below. The risk that industry-wide disease in porcine will
affect the performance of the Group in the second half of this
financial year has increased due to the rapid and accelerating
spread of porcine epidemic diarrhoea virus (PEDv) in North America.
There has been no change to the principal risks that might affect
the performance of the Group in the current financial year.
RISK RISK DESCRIPTION MITIGATING ACTIONS
------------ ----------------------------------------------------------- ---------------------------------------------------------
Strategic
risks
------------ ----------------------------------------------------------- ---------------------------------------------------------
Product
development * Development programme fails to produce best genetics * Formal communication process, to ensure devel
and for customers opment
competitive is aligned with customer requirements
edge
* Increased competition in developed and emerging
markets drives down market share and margins * Dedicated product development team, with clea
r
objectives and measurable targets
* Technical services and support for customers,
to
enable them to make best use of our products
* Frequent benchmarking of performance against
competitors in customers' systems
------------ ----------------------------------------------------------- ---------------------------------------------------------
Commercialisation
of * Failure to focus research initiatives on commercially * Regular oversight of research by R&D Portfolio
research important areas Management Team and executive management
* Failure to lead on 'game-changing' technology or to * Allocation of appropriate budget to research and
bring new initiatives to commercial viability development
* Regular Board updates on key development projects
------------------ ------------------------------------------------------------ ---------------------------------------------------------------
Emerging markets
* Failure to appropriately develop business in China * Experienced management team, blending local and
and emerging markets expatriate executives
* Separate Asia business unit, reporting directly to
CEO, ensures appropriate focus on region
* High level of Board oversight
* Dedicated development, technical services and
veterinary staff within emerging markets
* Adoption of joint venture business model in
appropriate regions, with a robust process in place
for selecting JV partners
* Global species team supports the growth initiatives
and ensures compliance with global standards
------------------ ------------------------------------------------------------ ---------------------------------------------------------------
Capturing value
through * Failure to identify appropriate investment * Board review of all investment opportunities and
acquisitions opportunities or perform sound due diligence approval of transactions
* Failure to successfully integrate an acquired * Rigorous due diligence process
business
* Structured post-acquisition integration planning and
execution
------------------ ------------------------------------------------------------ ---------------------------------------------------------------
Operational
risks
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Intellectual
property * Genus-developed genetic material, methods and * Global cross-functional process, to identify and
protection technology could become freely available to third protect intellectual property
parties
* Strict contractual restrictions imposed on
counterparties, to limit use of genetic material
within pure lines
* Careful selection of multipliers and joint venture
partners (including in emerging markets) to ensure
trustworthiness
* Ability to genetically test animals, to determine
genetic origin
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Bio-security
and * Loss of key livestock, owing to disease outbreak * Formal bio-security standards, including movement
continuity controls and veterinary inspection
of supply
* Loss of ability to move animals or semen freely
(including across borders) owing to, for example, * Independent reviews of bio-security measures, to
disease outbreak, environmental incident or assess standards and ensure compliance
international trade sanctions
* Products sourced from increasing number of facilities
in different countries, to avoid over-reliance on
* Reduced revenues due to lower customer productivity single production site
and delayed expansion in the event of industry wide
epidemics
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Human
resources * Failure to attract or retain skills and experience * Comprehensive talent and people plans, covering
within executive, management and employee cohorts recruitment, performance management, reward,
organisation design, talent, communication and
engagement
* Regular review of senior management performance and
remuneration at Remuneration Committee, with external
advice where appropriate
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Business
continuity * Unavailability of key research, production or * Business Continuity Plans in place for key locations
administrative site
* Testing programme established, to ensure continuity
* Failure of IT system plans are effective
* Care taken to avoid over-reliance on single
production sites, with key facilities placed in
different countries
* Formal IT Disaster Recovery Plans in place, with
testing programme
* Property Damage and Business Interruption insurance
cover in place
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Financial
risks
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Agricultural
market * Fluctuations in agricultural markets affect customer * Global footprint balances our exposure across
and profitability and demand for our products and different markets
commodity services
prices
volatility * Porcine royalty model mitigates impact of cyclical
* Increase in our operating costs, owing to commodity price reductions or cost increases in hog production
pricing volatility
* Hedging transactions fix pricing of inputs and
outputs, where appropriate
------------- ----------------------------------------------------------- ----------------------------------------------------------------
Pensions
* Exposure to costs associated with failure of third * Actuarial valuations performed as at March 2012 and
party member of joint and several pension scheme deficit recovery plans agreed with pension fund
trustees
* Exposure to costs as a result of external factors
affecting size of pension deficit (e.g. mortality * Review of investment strategy, to ensure appropriate
rates, investment values etc.) risk/reward profile
* Closure of pension funds to future service
* Monitoring of joint and several liability in the Milk
Pension Fund
* Appointed principal employer for the Milk Pension
Fund in 2012 and chair the group of participating
employers
------------- ----------------------------------------------------------- ----------------------------------------------------------------
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 31 December 2013
Six months
ended Six months ended
31 December 31 December Year ended
2013 2012* 30 June 2013*
--------------- ------------------- -----------------
Note GBPm GBPm GBPm
Revenue from continuing
operations 4 181.7 167.2 345.3
Adjusted operating profit
from continuing operations 22.3 22.3 45.0
Net IAS 41 valuation movement
on biological assets 9 5.8 6.1 (4.9)
Amortisation of acquired
intangible assets (2.6) (2.6) (5.2)
Share-based payment expense (1.5) (1.2) (2.8)
24.0 24.6 32.1
Exceptional items
Acquisition and integration 5 (1.5) - -
Other (including restructuring) 5 0.8 (0.3) (2.8)
Release of pension provision 5 - - 7.0
Operating profit from
continuing operations 23.3 24.3 36.3
Share of post-tax profit
of joint ventures and
associates 10 1.5 0.9 2.8
Net finance costs 6 (2.8) (2.9) (5.7)
Profit before tax from
continuing operations 22.0 22.3 33.4
Taxation 7 (4.8) (6.9) (10.0)
Profit for the period
from continuing operations 17.2 15.4 23.4
Earnings per share from
continuing operations
Basic earnings per share 12 28.4p 25.6p 38.8p
Diluted earnings per share 12 28.1p 25.3p 38.3p
Non statutory measure
of profit
Adjusted operating profit
from continuing operations 4 22.3 22.3 45.0
Pre-tax share of profits
from joint ventures and
associates excluding net
IAS 41 valuation movement 1.1 1.2 3.2
Adjusted operating profit
including joint ventures
and associates 23.4 23.5 48.2
Net finance costs 6 (2.8) (2.9) (5.7)
Adjusted profit before
taxation from continuing
operations 20.6 20.6 42.5
Adjusted earnings per
share from continuing
operations
Basic adjusted earnings
per share 12 24.6p 23.6p 49.1p
Diluted adjusted earnings
per share 12 24.3p 23.3p 48.4p
*restated see note 2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2013
Six months Six months
ended ended
31 December 31 December Year ended
2013 2012* 30 June 2013*
----------------- ----------------- -----------------
GBPm GBPm GBPm GBPm GBPm GBPm
Profit for the period 17.2 15.4 23.4
Items that may be reclassified
subsequently to profit
or loss
Foreign exchange translation
differences (40.7) (12.3) 13.8
Fair value movement on
net investment hedges 4.7 2.2 (2.4)
Fair value movement on
cash flow hedges 0.1 0.1 0.2
Tax relating to items that
may be reclassified 8.3 3.2 (3.1)
(27.6) (6.8) 8.5
Items that will not be
reclassified subsequently
to profit or loss
Actuarial gain/(loss) on
retirement benefit obligations 4.6 (6.2) (3.7)
Tax relating to items not
reclassified (2.2) 0.8 0.3
2.4 (5.4) (3.4)
Other comprehensive (expense)/income
for the period net of tax (25.2) (12.2) 5.1
Total comprehensive (expense)/income
for the period (8.0) 3.2 28.5
Attributable to:
Owners of the Company (8.0) 3.2 28.5
Minority interests - - -
(8.0) 3.2 28.5
*restated see note 2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2013
Called
up Share Trans-
share premium Own lation Hedging Retained Minority Total
capital account shares reserve reserve earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Note
Balance at
1 July 2012 6.0 112.1 (0.1) 17.1 (0.5) 143.0 277.6 0.4 278.0
Foreign exchange
translation
differences,
net of tax - - - 10.1 - - 10.1 - 10.1
Fair value
movement on
net investment
hedges, net
of tax - - - (1.8) - - (1.8) - (1.8)
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* - - - - - (3.4) (3.4) - (3.4)
Other comprehensive
income/(expense)
for the period* - - - 8.3 0.2 (3.4) 5.1 - 5.1
Profit for
the period* - - - - - 23.4 23.4 - 23.4
Total comprehensive
income for
the period - - - 8.3 0.2 20.0 28.5 - 28.5
Recognition
of share-based
payments, net
of tax - - - - - 3.0 3.0 - 3.0
Issue of ordinary
shares 0.1 - - - - - 0.1 - 0.1
Dividends 8 - - - - - (9.1) (9.1) - (9.1)
Balance at
30 June 2013 6.1 112.1 (0.1) 25.4 (0.3) 156.9 300.1 0.4 300.5
Foreign exchange
translation
differences,
net of tax - - - (32.4) - - (32.4) - (32.4)
Fair value
movement on
net investment
hedges, net
of tax - - - 4.7 - - 4.7 - 4.7
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 - - - - - 2.4 2.4 - 2.4
Other comprehensive
(expense)/
income for
the period - - - (27.7) 0.1 2.4 (25.2) - (25.2)
Profit for
the period - - - - - 17.2 17.2 - 17.2
Total comprehensive
(expense)/income
for the period - - - (27.7) 0.1 19.6 (8.0) - (8.0)
Recognition
of share-based
payments, net
of tax - - - - - 1.4 1.4 - 1.4
Issue of ordinary
shares - 0.1 - - - - 0.1 - 0.1
Dividends 8 - - - - - (6.7) (6.7) - (6.7)
Balance at
31 December
2013 6.1 112.2 (0.1) (2.3) (0.2) 171.2 286.9 0.4 287.3
*restated see note 2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(CONTINUED)
For the six months ended 31 December 2013
Called
up Share Trans-
share premium Own lation Hedging Retained Minority Total
capital account shares reserve reserve earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Note
Balance at
1 July 2012 6.0 112.1 (0.1) 17.1 (0.5) 143.0 277.6 0.4 278.0
Foreign exchange
translation
differences,
net of tax - - - (8.6) - - (8.6) - (8.6)
Fair value
movement on
net investment
hedges, net
of tax - - - 1.7 - - 1.7 - 1.7
Fair value
movement on
cash flow hedges,
net of tax - - - - 0.1 - 0.1 - 0.1
Actuarial loss
on retirement
benefit obligations,
net of tax* - - - - - (5.4) (5.4) - (5.4)
Other comprehensive
(expense)/income
for the period* - - - (6.9) 0.1 (5.4) (12.2) - (12.2)
Profit for
the period* - - - - - 15.4 15.4 - 15.4
Total comprehensive
(expense)/income
for the period - - - (6.9) 0.1 10.0 3.2 - 3.2
Recognition
of share-based
payments, net
of tax - - - - - 1.4 1.4 - 1.4
Issue of ordinary
shares 0.1 - - - - - 0.1 - 0.1
Dividends 8 - - - - - (6.1) (6.1) - (6.1)
Balance at
31 December
2012 6.1 112.1 (0.1) 10.2 (0.4) 148.3 276.2 0.4 276.6
*restated see note 2
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 December 2013
31 December 31 December 30 June
Note 2013 2012* 2013
GBPm GBPm GBPm
Assets
Goodwill 69.7 65.0 67.8
Other intangible assets 68.3 67.8 68.3
Biological assets 9 214.9 221.0 224.0
Property, plant and equipment 41.8 42.8 45.0
Interests in joint ventures
and associates 10 22.4 9.6 11.4
Available for sale investments 0.1 0.1 0.1
Derivative financial assets - 0.2 -
Deferred tax assets 17.4 24.0 20.4
Total non-current assets 434.6 430.5 437.0
Inventories 31.6 30.4 34.9
Biological assets 9 43.1 38.7 40.5
Trade and other receivables 78.8 78.8 78.9
Cash and cash equivalents 20.7 11.4 18.4
Income tax receivable 0.4 0.9 0.4
Asset held for sale - 0.3 0.3
Derivative financial assets 0.2 - -
Total current assets 174.8 160.5 173.4
Total assets 609.4 591.0 610.4
Liabilities
Trade and other payables (50.7) (43.2) (51.7)
Interest-bearing loans
and borrowings (10.5) (9.9) (7.5)
Provisions (1.1) (2.3) (1.1)
Obligations under finance
leases (1.1) (0.9) (1.2)
Current tax liabilities (5.0) (5.8) (6.7)
Derivative financial liabilities (1.2) (0.3) (0.8)
Total current liabilities (69.6) (62.4) (69.0)
CONDENSED CONSOLIDATED BALANCE SHEET As at 31 December 2013
31 December 31 December 30 June
Note 2013 2012* 2013
GBPm GBPm GBPm
Interest-bearing loans and
borrowings (87.6) (62.6) (60.7)
Retirement benefit obligations 14 (59.5) (74.3) (65.0)
Provisions (0.1) (0.1) (0.1)
Deferred tax liabilities (103.9) (112.4) (113.1)
Derivative financial liabilities - (0.7) (0.1)
Obligations under finance
leases (1.4) (1.9) (1.9)
Total non-current liabilities (252.5) (252.0) (240.9)
Total liabilities (322.1) (314.4) (309.9)
Net assets 287.3 276.6 300.5
Equity
Called up share capital 6.1 6.1 6.1
Share premium account 112.2 112.1 112.1
Own shares (0.1) (0.1) (0.1)
Translation reserve (2.3) 10.2 25.4
Hedging reserve (0.2) (0.4) (0.3)
Retained earnings 171.2 148.3 156.9
Equity attributable to owners of
the Company 286.9 276.2 300.1
Minority interest 0.4 0.4 0.4
Total equity 287.3 276.6 300.5
*restated see note 2
ANALYSIS OF NET DEBT
For the six months ended 31 December 2013
Six months Six months Year
ended ended ended
31 December 31 December 30 June
Note 2013 2012 2013
GBPm GBPm GBPm
Net cash inflow from operating activities 13 11.2 1.5 24.0
Cash flows from investing activities
Dividend received from joint ventures
and associates 0.3 0.2 0.6
Acquisition of subsidiary - Génétiporc (20.4) - -
Purchase of trade and assets - Génétiporc (2.0) - -
Acquisition of investment in joint
ventures and associates (11.2) - -
Purchase of property, plant and
equipment (2.8) (3.3) (6.7)
Purchase of intangible assets (0.7) (0.6) (1.9)
Proceeds from sale of property,
plant and equipment 0.5 - 1.1
Net cash outflow from investing
activities (36.3) (3.7) (6.9)
Cash flows from financing activities
Drawdown of borrowings 37.6 13.1 20.8
Repayment of borrowings (4.9) (10.4) (26.3)
Payment of finance lease liabilities (0.6) (0.7) (1.3)
Equity dividends paid (6.7) (6.1) (9.1)
Debt issue cost (0.8) - -
Issue of ordinary shares 0.1 0.1 0.1
Increase/(decrease) in bank overdrafts 3.9 (1.0) (2.0)
Net cash inflow/(outflow) from financing
activities 28.6 (5.0) (17.8)
Net increase/(decrease) in cash
and cash equivalents 3.5 (7.2) (0.7)
Cash and cash equivalents at beginning
of period 18.4 18.6 18.6
Net increase/(decrease) in cash
and cash equivalents 3.5 (7.2) (0.7)
Effect of exchange rate fluctuations
on cash and cash equivalents (1.2) - 0.5
Total cash and cash equivalents
at end of period 20.7 11.4 18.4
At 1 July Foreign Non-cash At 31 December
2013 Cash flows exchange movements 2013
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 18.4 3.5 (1.2) - 20.7
Interest-bearing loans
- current (7.5) (3.5) 0.7 (0.2) (10.5)
Obligation under finance
leases - current (1.2) 0.6 0.1 (0.6) (1.1)
(8.7) (2.9) 0.8 (0.8) (11.6)
Interest-bearing loans
- non-current (60.7) (32.3) 5.4 - (87.6)
Obligation under finance
lease - non-current (1.9) - 0.2 0.3 (1.4)
(62.6) (32.3) 5.6 0.3 (89.0)
Net debt (52.9) (31.7) 5.2 (0.5) (79.9)
At 1 July Foreign Non-cash At 31 December
2012 Cash flows exchange movements 2012
GBPm GBPm GBPm GBPm GBPm
Cash and cash equivalents 18.6 (7.2) - - 11.4
Interest-bearing loans
- current (8.2) (1.7) 0.3 (0.3) (9.9)
Obligation under finance
leases - current (0.9) 0.7 - (0.7) (0.9)
(9.1) (1.0) 0.3 (1.0) (10.8)
Interest-bearing loans
- non-current (64.6) - 2.0 - (62.6)
Obligation under finance
lease - non-current (1.3) - - (0.6) (1.9)
(65.9) - 2.0 (0.6) (64.5)
Net debt (56.4) (8.2) 2.3 (1.6) (63.9)
Net debt is defined as the total of cash and cash equivalents,
interest-bearing loans, unamortised debt issue costs and obligation
under finance leases.
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the six months ended 31 December 2013
1. Basis of preparation
The unaudited Condensed Set of Financial Statements for the six
months ended 31 December 2013:
-- were prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting' ('IAS 34') and thereby
International Financial Reporting Standards ('IFRSs'), both as
issued by the International Accounting Standards Board ('IASB') and
as adopted by the European Union ('EU');
-- 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 2013 Annual Report;
-- 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 2014.
The information relating to the year ended 30 June 2013 is an
extract from the published financial statements for that year,
restating for the impact of adopting IAS 19'Employee Benefits',
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 impact of adopting IAS 19 on financial
information for the year ended 30 June 2013 is outlined in note
2.
The unaudited Condensed Set of Financial Statements for the six
months ended 31 December 2013 has not been reviewed by our
Auditor.
The Group's business activities and principal risks and
uncertainties are summarised in the Principal Risks and
Uncertainties section in this interim report. Having considered
these risks and uncertainties under the current economic
environment, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence
for the foreseeable future. Therefore they continue to adopt 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.
2. Accounting policies and non-GAAP measures
The same accounting policies, presentation and methods of
computation are followed in the Condensed Set of Financial
Statements as applied in the Group's latest annual audited
financial statements, dated 2 September 2013, which are available
on the Group's website www.genusplc.com except as described
below.
Certain comparative amounts have been reclassified to conform to
the current period's presentation.
New standards and interpretations
The following new standards and interpretation have been adopted
in the current period:
-- Amendments to IAS 19 'Employee Benefits', IFRS 1 'Government
loans', and IFRS 7 'Disclosures - offsetting financial assets and
financial liabilities';
-- IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint
Arrangements', IFRS 12 'Disclosure of Interests in Other Entities',
IFRS 13 'Fair Value Measurement'; and
-- IAS 27 (2011) 'Separate Financial Statements' and IAS 28
(2011) 'Investments in Associates and Joint Ventures',
'Improvements to IFRS 2009-2011 cycle', 'Consolidated Financial
Statement, Joint Arrangements and Disclosure of Interest in Other
Entities: Transition Guidance' and IFRIC 20 'Stripping costs in the
production phase of a surface mine'.
Except for the amendments to IAS 19, there has been no
significant impact on the results or disclosures for the current
period from the adoption of these new standards and
interpretations.
Adoption of the amendments to IAS 19
The impact of restating key financial information for the impact
of adopting the amendments to IAS 19 for the six months ended 31
December 2012 and year ended 30 June 2013 is described below:
Consolidated income statement and statement of comprehensive
income for the periods ended:
Six months ended Year ended
31 December 2012 30 June 2013
As New As New
reported Adjustments basis reported Adjustments basis
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 167.2 - 167.2 345.3 - 345.3
Operating profit 24.8 (0.5) 24.3 37.2 (0.9) 36.3
Net finance costs (0.9) (2.0) (2.9) (1.9) (3.8) (5.7)
Profit before tax 24.8 (2.5) 22.3 38.1 (4.7) 33.4
Profit for the financial period 17.3 (1.9) 15.4 27.0 (3.6) 23.4
Other comprehensive (expense)/income (14.1) 1.9 (12.2) 1.5 3.6 5.1
Total comprehensive income
for the period 3.2 - 3.2 28.5 - 28.5
Basic earnings per share 28.7p (3.1p) 25.6p 44.7p (5.9p) 38.8p
The expected return on plan assets in excess of the discount
rate has been moved to the statement of other comprehensive income,
increasing the net finance costs. Administration expenses in
respect of pension schemes are now included within operation profit
and not offset against return on plan assets.
There has been no net effect on the consolidated statement of
financial position or consolidated statement of cash flows recorded
as a result of this restatement.
The balance sheet comparative for the six months ended 31
December 2012 has been restated to recognise trade receivables due
under royalty contract when they become receivable.
The amounts involved are an increase in trade receivables at 31
December 2012 of GBP3.7m, an increase in deferred tax liabilities
at 31 December 2012 of GBP1.3m and an increase in shareholders'
equity at 31 December 2012 of GBP2.4m.
There has been no effect on the income statement or cash flows
recorded as a result of this restatement.
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 by the EU):
-- IFRS 9 'Financial Instruments'; and
-- IAS 32 'Offsetting Financial Assets and Financial Liabilities' and IFRIC 21 'Levies'.
The Group is currently assessing the impact of the new
pronouncements on its results, financial position and cash
flows.
Non-GAAP measures - adjusted operating profit, adjusted profit
before tax and adjusted earnings per share
Adjusted operating profit, adjusted operating profit before tax
from continuing operations and adjusted earnings per share are
defined before the net IAS 41 valuation movement on biological
assets, amortisation of acquired intangible assets, share-based
payment expense, exceptional items and other gains and losses.
These additional non-GAAP measures of operating performance are
included as the Directors believe that they provide useful
alternative measures for shareholders of the trading performance of
the Group. The reconciliation between operating profit from
continuing operations and adjusted operating profit from continuing
operations is shown on the face of the Condensed Consolidated
Income Statement.
3. Foreign currency
The principal exchange rates used were as follows:
Average Closing
----------------------------------- ------------------------------------
Six months Six months Year
ended 31 ended 31 ended
December December 30 June 31 December 31 December 30 June
2013 2012 2013 2013 2012 2013
US Dollar/GBP 1.60 1.60 1.57 1.66 1.63 1.52
Euro/GBP 1.18 1.25 1.21 1.20 1.23 1.17
Brazilian Real/GBP 3.67 3.28 3.22 3.91 3.33 3.35
Mexican Peso/GBP 20.91 20.92 20.16 21.69 21.11 19.76
Assets and liabilities of overseas undertakings are translated
into Sterling at the rate of exchange ruling at the balance sheet
date and the income statement is translated into Sterling at
average rates of exchange.
4. Segmental information
The Group presents its segmental information on the basis
reviewed regularly for assessing business performance and for the
purposes of resource allocation, by the chief operating decision
maker.
The Group's business is not highly seasonal and its customer
base is diversified, with no individual customer generating in
excess of 2% of revenue.
Revenue+
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012 2013
GBPm GBPm GBPm
Genus PIC 72.9 64.4 133.5
Genus ABS 77.9 70.0 146.8
Genus Asia 24.4 28.3 55.5
Research and product development
---------------------------------------- ------------- ------------- ------------
Research - - -
Porcine product development 6.5 4.5 9.5
Bovine product development - - -
---------------------------------------- ------------- ------------- ------------
6.5 4.5 9.5
------------- ------------- ------------
181.7 167.2 345.3
------------- ------------- ------------
Operating profit by segment and a reconciliation to adjusted
operating profit for the Group is set out below. A reconciliation
of adjusted operating profit to profit for the period is shown on
the Condensed Consolidated Income Statement.
Operating profit+
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012* 2013
GBPm GBPm GBPm
Genus PIC 25.1 23.6 48.2
Genus ABS 12.4 11.0 22.8
Genus Asia 3.8 6.9 12.3
Research and product development
---------------------------------- ------------- ------------- -------------
Research (1.4) (1.2) (2.7)
Porcine product development (7.0) (7.6) (14.7)
Bovine product development (5.9) (5.6) (10.6)
---------------------------------- ------------- ------------- -------------
(14.3) (14.4) (28.0)
Segment operating profit 27.0 27.1 55.3
Central costs (4.7) (4.8) (10.3)
Adjusted operating profit 22.3 22.3 45.0
------------- ------------- -------------
4. SEGMENTAL INFORMATION (CONTINUED)
Segment assets+ Segment liabilities+
31 December 31 December 30 June 31 December 31 December 30 June
2013 2012* 2013 2013 2012* 2013
GBPm GBPm GBPm GBPm GBPm GBPm
Genus PIC 204.0 189.7 194.6 (45.3) (49.9) (45.4)
Genus ABS 114.2 108.8 118.5 (22.7) (19.3) (28.1)
Genus Asia 44.1 34.1 36.5 (9.0) (6.3) (9.0)
Research and product development
------------------------------------------ ----------- ----------- ------- ----------- ----------- -------
Research 2.5 0.6 1.1 - (0.1) -
Porcine product development 80.4 74.5 80.6 (34.7) (34.3) (36.8)
Bovine product development 156.6 170.5 166.3 (47.3) (51.9) (51.6)
------------------------------------------ ----------- ----------- ------- ----------- ----------- -------
239.5 245.6 248.0 (82.0) (86.3) (88.4)
Segment total 601.8 578.2 597.6 (159.0) (161.8) (170.9)
Central and unallocated 7.6 12.8 12.8 (163.1) (152.6) (139.0)
Total 609.4 591.0 610.4 (322.1) (314.4) (309.9)
* restated see note 2
+ The segmental information disclosed has been changed to
reflect changes in the organisational structure and differs from
those presented in previous periods.
5. Exceptional items
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012 2013
GBPm GBPm GBPm
Acquisition and integration (1.5) - -
Other (including restructuring) 0.8 (0.3) (2.8)
Release of pension provision - - 7.0
(0.7) (0.3) 4.2
------------ ------------ --------
During the period, GBP1.5m of expenses were incurred in relation
to the acquisition and integration of Génétiporc (see note 17).
Included within Other was GBP0.8m of income, net of legal fees,
which relates to a cash settlement received in the period from a
long standing legal claim.
During the year ended 30 June 2013, the multi-employer Milk
Pension Fund ('MPF') triennial valuation as at 31 March 2012 was
completed and a new funding agreement between the employers was
agreed. In addition, two participating employers exited the scheme
and made cash payments of GBP31m. These changes gave rise to an
exceptional credit of GBP7.0m.
During the year ended 30 June 2013, restructuring charge of
GBP2.8m relates principally to a refocusing of the European porcine
business as it continued to reduce direct farm operations, whilst
widening its restructuring programme in line with the Group's
global strategy.
6. Net finance costs
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012* 2013*
GBPm GBPm GBPm
Interest payable on bank loans and overdrafts (0.8) (0.8) (1.6)
Amortisation of debt issue costs (0.2) (0.3) (0.5)
Other interest payable (0.2) - (0.1)
Net interest cost in respect of pension
scheme liabilities (1.5) (1.6) (3.1)
Net interest cost on derivative financial
instruments (0.2) (0.2) (0.5)
Total interest expense (2.9) (2.9) (5.8)
Interest income on bank deposits 0.1 - 0.1
Total interest income 0.1 - 0.1
Net finance costs (2.8) (2.9) (5.7)
* restated see note 2
7. Income tax expense
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012* 2013*
GBPm GBPm GBPm
Current tax 4.7 5.9 12.0
Deferred tax 0.1 1.0 (2.0)
4.8 6.9 10.0
* restated see note 2
The taxation charge for the period is based on the estimated
effective tax rate on adjusted profits for the full year of 27.7%
(2012: 31.1 %).
The tax charge for the period of GBP4.8m (2012: GBP6.9m) on
statutory profit represents a statutory tax rate of 21.8% (2012:
30.9%). The statutory tax rate for the period includes a 5.9%
change of rate benefit which arises principally from the reduction
in the applicable tax rate from 23% to 21% on UK deferred tax
liabilities on intangible assets and biological assets.
There is a deferred tax liability at the period end of GBP103.9m
(2012: GBP112.4m) which mainly relates to the recognition at fair
value of biological assets and intangible assets arising on
acquisition and a deferred tax asset of GBP17.4m (2012: GBP24.0m)
which mainly relates 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 June
2013 2012 2013
GBPm GBPm GBPm
Amounts recognised as distributions to equity
holders in the period:
Final dividend for the year ended 30 June
2012 of 10.1 pence per share - 6.1 6.1
Interim dividend for the year ended 30 June
2013 of 5.0 pence per share - - 3.0
Final dividend for the year ended 30 June 6.7 - -
2013 of 11.1 pence per share
6.7 6.1 9.1
The final dividend for the year ended 30 June 2013 was approved
at the Company Annual General Meeting on 15 November 2013 and paid
on 6 December 2013.
On 24 February 2014 the Board proposed an interim dividend of
5.5 pence per share payable on 28 March 2014.
9. biological assets
Fair value of biological assets Bovine Porcine Total
GBPm GBPm GBPm
Balance at 1 July 2013 147.0 117.5 264.5
Increases due to purchases 1.9 44.1 46.0
Decreases attributable to sales - (71.3) (71.3)
Decrease due to harvest (14.4) (5.2) (19.6)
Changes in fair value less estimated sale
costs 16.3 36.4 52.7
Acquisition of Génétiporc (see
note 17) - 8.9 8.9
Effect of movements in exchange rates (11.5) (11.7) (23.2)
Balance at 31 December 2013 139.3 118.7 258.0
Non-current biological assets 139.3 75.6 214.9
Current biological assets - 43.1 43.1
Balance at 31 December 2013 139.3 118.7 258.0
Balance at 1 July 2012 152.2 107.6 259.8
Increases due to purchases 1.9 41.9 43.8
Decreases attributable to sales - (57.9) (57.9)
Decrease due to harvest (13.2) (4.6) (17.8)
Changes in fair value less estimated sale
costs 13.2 26.6 39.8
Effect of movements in exchange rates (4.6) (3.4) (8.0)
Balance at 31 December 2012 149.5 110.2 259.7
Non-current biological assets 149.5 71.5 221.0
Current biological assets - 38.7 38.7
Balance at 31 December 2012 149.5 110.2 259.7
Balance at 1 July 2012 152.2 107.6 259.8
Increases due to purchases 5.4 89.0 94.4
Decreases attributable to sales - (131.2) (131.2)
Decrease due to harvest (27.2) (9.4) (36.6)
Changes in fair value less estimated sale
costs 12.2 57.5 69.7
Effect of movements in exchange rates 4.4 4.0 8.4
Balance at 30 June 2013 147.0 117.5 264.5
Non-current biological assets 147.0 77.0 224.0
Current biological assets - 40.5 40.5
Balance at 30 June 2013 147.0 117.5 264.5
9. biological assets (continued)
Bovine biological assets include GBP2.5m (2012: GBP1.2m)
representing the fair value of bulls owned by third parties but
managed by the Group, net of expected future payments to such third
parties and 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
year. Decreases due to harvest represent the semen extracted from
the biological assets. Inventories of such semen are shown as
biological asset harvest.
The current market determined post-tax rate used to discount
expected future net cash flows from the sale of bull semen is the
Group's weighted average cost of capital. This has been assessed as
8.0% (2012: 8.0%).
Porcine biological assets include GBP30.2m (2012: GBP34.3m)
relating to the fair value of the retained interest in the genetics
in respect of animals transferred to customers under royalty
contracts. Total revenue in the period includes GBP38.8m (2012:
GBP36.1m) of revenue in respect of these contracts comprising
GBP5.0m (2012: GBP5.9m) on initial transfer of animals to customers
and GBP33.8m (2012: GBP30.2m) in respect of royalties received.
Decreases attributable to sales during the period of GBP71.3m
(2012: GBP57.9m) include GBP16.3m (2012: GBP17.2m) in respect of
the reduction in fair value of the retained interest in the
genetics of animals sold under royalty contracts.
For pure line porcine herds, the net cash flows from the
expected output of the herds are discounted at the Group's required
rate of return adjusted for the greater risk implicit in including
output from future generations. This adjusted rate has been
assessed as 11.0% (2012: 11.0%). The number of future generations
which have been taken into account is seven (2012: seven) and their
estimated useful lifespan is 1.4 years (2012: 1.4 years).
Included in increases due to purchases, the aggregate gain
arising during the period on initial recognition of biological
assets in respect of multiplier purchases was GBP13.2m (2012:
GBP13.1m).
Six months ended 31 December 2013 Bovine Porcine Total
GBPm GBPm GBPm
Net IAS 41 valuation movement on biological
assets*
Changes in fair value of biological assets 16.3 36.4 52.7
Inventory transferred to cost of sales at
fair value (14.8) (5.2) (20.0)
Biological assets transferred to cost of
sales at fair value - (26.9) (26.9)
1.5 4.3 5.8
Six months ended 31 December 2012 Bovine Porcine Total
GBPm GBPm GBPm
Net IAS 41 valuation movement on biological
assets*
Changes in fair value of biological assets 13.2 26.6 39.8
Inventory transferred to cost of sales at
fair value (12.7) (4.6) (17.3)
Biological assets transferred to cost of
sales at fair value - (16.4) (16.4)
0.5 5.6 6.1
Year ended 30 June 2013 Bovine Porcine Total
GBPm GBPm GBPm
Net IAS 41 valuation movement on biological
assets*
Changes in fair value of biological assets 12.2 57.5 69.7
Inventory transferred to cost of sales at
fair value (21.5) (9.4) (30.9)
Biological assets transferred to cost of
sales at fair value - (43.7) (43.7)
(9.3) 4.4 (4.9)
*This represents the difference between operating profit
prepared under IAS 41 and operating profit prepared under historic
cost accounting, which forms part of the reconciliation to adjusted
operating profit.
10. equity accounted investees
The Group's share of profit after tax in its equity accounted
investees for the six months ended 31 December 2013 was GBP1.5m
(2012: GBP0.9m).
2013 2012
GBPm GBPm
Balance at 1 July 11.4 9.2
Share of post-tax profits of joint ventures and
associates retained 1.5 0.9
Dividends received (0.3) (0.2)
Addition - investment in Besun joint venture and
Agroceres - PIC Suinos (Brasil) 11.2 -
Effect of movements in exchange rates (1.4) (0.3)
Balance at 31 December 22.4 9.6
Summary financial information for equity accounted investees,
adjusted for the percentage ownership held by the Group:
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
2013 8.6 0.6 (7.5) (0.2) 1.5
Six months ended 31 December
2012 10.2 - (9.0) (0.3) 0.9
Year ended 30 June 2013 19.1 0.2 (15.9) (0.6) 2.8
In preparation for the acquisition of Génétiporc do Brasil, the
group increased its investment in Agroceres - PIC Suinos (Brasil)
by GBP2.4m.
11. Related parties
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and its
joint ventures and associates are described below:
Other related party transactions
Transaction value Balance outstanding
----------------------------------- ------------------------------------
Six months Six months Year
ended 31 ended 31 ended
December December 30 June 31 December 31 December 30 June
2013 2012 2013 2013 2012 2013
Sale of goods and services GBPm GBPm GBPm GBPm GBPm GBPm
Joint ventures and
associates 1.4 2.3 3.1 0.1 0.1 0.1
All transactions and related outstanding balances with joint
ventures and associates are based on an arm's length basis and are
to be settled in cash within three months of the reporting date.
None of the balances are secured.
In addition, in the prior year, to 31 December 2012, the Group
sold GBP3.6m of goods to a subsidiary of Shaanxi Yangling Besun
Agricultural Group Co. ('Besun'), which has now become a 49% joint
venture entity of the Group.
12. Earnings per share
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012 2013
m m m
Weighted average number of ordinary shares
(basic) 60.5 60.2 60.4
Dilutive effect of share options 0.7 0.8 0.6
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 61.2 61.0 61.0
Six months Six months Year
ended ended ended
31 December 31 December* 30 June*
2013 2012 2013
Earnings per share from continuing operations
Basic earnings per share 28.4p 25.6p 38.8p
Diluted earnings per share 28.1p 25.3p 38.3p
Adjusted earnings per share from continuing
operations
Adjusted earnings per share 24.6p 23.6p 49.1p
Diluted adjusted earnings per share 24.3p 23.3p 48.4p
Earnings per share measures are calculated on the weighted
average number of ordinary shares in issue during the period. As in
previous years, adjusted earnings per share have been shown, since
the Directors consider that this alternative measure gives a more
comparable indication of the Group's underlying trading
performance.
Continuing operations
Basic earnings per share from continuing operations is
calculated on the profit for the period of GBP17.2m (six months
ended 31 December 2012: GBP15.4m; year ended 30 June 2013:
GBP23.4m) 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 GBP14.9m (six months ended 31 December 2012:
GBP14.2m; year ended 30 June 2013: GBP29.6m), as follows:
Adjusted earnings from continuing
operations
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2013 2012* 2013*
GBPm GBPm GBPm
Profit before tax from continuing
operations 22.0 22.3 33.4
Add/(deduct):
Net IAS 41 valuation movement on
biological assets (5.8) (6.1) 4.9
Amortisation of acquired intangible
assets 2.6 2.6 5.2
Share-based payment expense 1.5 1.2 2.8
Acquisition and integration and
restructuring costs 1.5 - -
Other (including restructuring) (0.8) 0.3 2.8
Release of pension provision and
exit fees - - (7.0)
Net IAS 41 valuation movement on
biological assets in joint ventures
and associates (0.6) - (0.2)
Tax on joint ventures and associates 0.2 0.3 0.6
Adjusted profit before tax 20.6 20.6 42.5
Adjusted tax charge (5.7) (6.4) (12.9)
Adjusted profit after taxation 14.9 14.2 29.6
Effective tax rate on adjusted profit 27.7% 31.1% 30.4%
*restated see note 2
13. cash flow from operating activities
Six months Six months Year
ended ended ended
31 December 31 December* 30 June
2013 2012 2013*
GBPm GBPm GBPm
Profit for the period 17.2 15.4 23.4
Adjustment for:
- Net IAS 41 valuation movement on biological
assets (5.8) (6.1) 4.9
- Amortisation of intangible assets 2.6 2.6 5.2
- Share-based payment expense 1.5 1.2 2.8
- Share of profit of joint ventures
and associates (1.5) (0.9) (2.8)
- Finance costs 2.8 2.9 5.7
- Income tax expense 4.8 6.9 10.0
* Other exceptional items 0.7 0.3 (4.2)
Adjusted operating profit from continuing
operations 22.3 22.3 45.0
* Depreciation of property, plant and equipment 2.6 2.5 5.3
- Gain on disposal of plant and equipment - - (0.3)
- Amortisation of intangible assets 0.3 0.3 0.6
Adjusted earnings before interest, tax,
depreciation and amortisation 25.2 25.1 50.6
Exceptional items cash (0.7) (0.3) (2.8)
Other movements in biological assets
and harvested produce (0.4) (1.4) (3.1)
Decrease in provisions - (0.1) (1.3)
Pension contribution in excess of pension
charge (2.9) (0.8) (2.0)
Other (0.2) (0.1) (0.1)
Operating cash flows before movement
in working capital 21.0 22.4 41.3
Increase in inventories (0.8) (1.2) (1.1)
Increase in receivables (2.0) (9.3) (7.3)
(Decrease)/increase in payables (0.4) (5.0) 2.0
Cash generated by operations 17.8 6.9 34.9
Interest received 0.1 - 0.1
Interest and other finance costs paid (0.8) (0.8) (1.6)
Cash flow from derivative financial instruments (0.2) (0.2) (0.5)
Income taxes paid (5.7) (4.4) (8.9)
Net cash inflow from operating activities 11.2 1.5 24.0
* restated see note 2
14. retirement benefit obligations
The Group provides employee benefits under various arrangements,
including defined benefit and defined contribution pension plans,
the details of which are disclosed in the most recent annual
financial statements. Details of the total recognised defined
benefit obligations are provided below:
31 December 31 December 30 June
2013 2012 2013
GBPm GBPm GBPm
Present value of funded obligations 353.7 187.9 347.2
The Milk Pension Fund - additional provision - 22.7 -
Present value of unfunded obligations 7.5 7.2 8.0
Total present value of obligations 361.2 217.8 355.2
Fair value of plan assets (306.1) (148.5) (294.1)
Restricted recognition of asset 4.4 5.0 3.9
Recognised liability for defined benefit
obligations before taxation 59.5 74.3 65.0
The Milk Pension Fund ('MPF')
The Milk Pension Fund is that previously operated by the Milk
Marketing Board, and was also open to membership of staff working
for Milk Marque Ltd (now known as Community Foods Group Limited),
National Milk Records plc, First Milk Ltd, hauliers associated to
First Milk Ltd, Dairy Farmers of Britain Ltd (which went into
receivership in June 2009) and Milk Link Ltd.
Genus has accounted for its section and its share of any orphan
assets and liabilities, collectively representing approximately 75%
of the MPF (2012: 37% of the MPF and GBP22.7m provision). Although
managed on a sectionalised basis, the MPF is a "last man standing
scheme", which means that all participating employers are jointly
and severally liable for all of the fund's liabilities.
Further details of the Milk Pension Fund can be found in the
Genus Annual Report 2013.
The principal actuarial assumptions at the date of the most
recent actuarial valuations (expressed as weighted averages)
are:
31 December 31 December 30 June
2013 2012 2013
% % %
Discount rate 4.4 4.3 4.6
Expected return on plan assets 7.1 6.3 7.1
Future salary increases n/a 3.9 4.4
Medical cost trend rate 7.4 6.8 7.4
Future pension increases 3.2 2.9 3.3
15. Other matters
Contingencies
There have been no material changes to the Group's contingent
liabilities relating to the Group's ongoing joint and several
liability for the Milk Pension Fund, more fully described in the
Annual Report 2013.
There have been no changes to any other contingent liabilities
involving the Group in the six months ended 31 December 2013 which
are expected to have, or have had, a material effect on the
financial position or profitability of the Group.
16. Financial instruments fair value disclosures
The table below sets out the categorisation of the financial
instruments held by the Group at 31 December 2013. Where the
financial instruments are held at fair value the valuation level
indicates the priority of the inputs to the valuation technique.
The fair value 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, the category level is based on the lowest
priority level input that is significant to the fair value
measurement of the instrument in its entirety.
Valuation 31 December
level 2013
GBPm
Financial assets
Derivative instrument in a non-designated hedge
accounting relationship 2 0.2
Financial liabilities
Derivative instrument in a designated hedge
accounting relationship 2 (0.2)
Derivative instrument in a non-designated hedge
accounting relationship 2 (1.0)
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.
17. Acquisition of subsidiary and related assets
On 18 October 2013 the group acquired 100% of the share capital
of Génétiporc International Minnesota Inc. and Génétiporc Servicios
Tecnicos, S.A.de C.V., together with specific related assets from
Génétiporc Inc., collectively "Génétiporc".
Genus identified that the acquisition of Génétiporc would be a
good strategic fit, providing a complementary product portfolio
which will support global product development. As a result of the
acquisition, there is also a broadened customer base, supply chain
and multiplier base to further support future growth in Genus's
North and Latin American businesses.
The amounts recognised in respect of the identifiable assets
acquired and liabilities assumed are as set out in the table
below.
GBPm
Intangible assets identified 5.0
Property plant and equipment 0.2
Biological assets 8.9
Financial assets 3.3
Financial liabilities (2.5)
Total identifiable assets 14.9
Goodwill 7.3
Total consideration 22.2
Satisfied by:
Cash 22.2
Net cash outflow arising on acquisition of
subsidiary
Cash consideration 20.2
Add: Overdraft acquired 0.2
20.4
Net cash outflow arising on acquisition of
trade and assets 2.0
The goodwill of GBP7.3m arising from the acquisition consists
largely of synergies expected from combining the acquired
operations with existing Genus operations. None of the goodwill
recognised is expected to be deductible for income tax
purposes.
The fair value of the financial assets includes trade
receivables with a fair value of GBP3.2m and a gross contractual
value of GBP3.7m. The best estimate at acquisition date of the cash
flows unlikely to be collected is GBP0.5m.
Acquisition and integration related costs included within
exceptional items amount to GBP1.5m.
Génétiporc contributed GBP5.5m revenue and GBPnil profit to the
Group for the period between date of acquisition and the balance
sheet date.
Due to the nature of the transaction it is impracticable to
obtain the information required to disclose what the group revenues
and group profit would have been, if the acquisition of
theGénétiporc had been completed on the first day of the financial
period.
GENUS PLC
Responsibility Statement
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 Group Finance Director
Karim Bitar Stephen Wilson
24 February 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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