TIDMGNS
RNS Number : 6852Y
Genus PLC
08 September 2022
For immediate release 8 September 2022
Genus plc
Preliminary results for the year ended 30 June 2022
CONTINUED STRATEGIC PROGRESS IN CHALLENGING MARKETS
Adjusted results(1) Statutory results
---------------------------------
Actual currency Constant Actual currency
currency
change(2)
Year ended 30 June 2022 2021 Change 2022 2021 Change
------ ----- ------ ------ -----
GBPm GBPm % % GBPm GBPm %
Revenue 593.4 574.3 3 2 593.4 574.3 3
Operating profit 68.8 76.9 (11) (13) 49.4 47.7 4
Operating profit inc
JVs exc gene editing 85.6 97.4 (12) (14) n/a n/a n/a
Profit before tax 71.5 84.8 (16) (18) 48.4 55.8 (13)
Free cash flow (13.5) 37.5 (136) n/m(3)
Basic earnings per share
(pence) 82.7 100.9 (18) (20) 62.5 72.6 (14)
Dividend per share (pence) 32.0 32.0 -
--------------------------- ------ ----- ------ ---------- ------ ----- ------
Robust performance across the business, despite challenging
macro-economic events; Group results adversely impacted by PIC
China
-- Group revenue up 2% in constant currency (3% in actual
currency), adjusted profit before tax ('PBT') down 18% in constant
currency (16% in actual currency)
-- Excluding PIC China, Group adjusted PBT up 25% in constant
currency (28% in actual currency) and revenue up 7% in constant
currency (9% in actual currency)
-- R&D investment increased by 6%(2) as planned
-- Statutory PBT reduced by 13% to GBP48.4m, reflecting lower
adjusted profit, lower net IAS 41 biological asset movement and
share-based payments
Challenging market conditions for PIC China as previously
indicated, strong PIC performance elsewhere
-- China pig prices averaged 14.6 RMB/kg through the year , down
50% on the prior year. Since June 2022, these have now recovered to
over 21 RMB/kg, which exceeds the cost of production for most
producers
-- Overall PIC volumes were stable, with revenue down 5% (2) but
royalty revenue up 1% (2) . Adjusted operating profit declined by
13% (2)
-- Excluding China, PIC's volumes up 8%, revenue up 4% (2) ,
royalty revenue up 8% (2) and adjusted operating profit up
11%(2)
-- Strong customer wins drove North America growth; solid
performances in Latin America and Europe despite challenging market
conditions for customers
Good performance in ABS, with adjusted operating profit growth
of 9% (2) and volume growth of 3%, despite more challenging market
for producers
-- Continued success for Sexcel(R) (supporting sexed volume
growth of 18%) and NuEra(R) beef (with volumes up 21% and total
beef volumes up 9%)
-- Strong growth in third party sales of IntelliGen sexed semen
production in North America and Europe
-- High growth in Asia , particularly China and continued growth in Latin America
-- Overall, ABS's adjusted operating profit up 9% (2)
Lower cash generation and earnings than prior year, dividends
maintained
-- Free cash outflow of GBP13.5m, reflecting lower profit from
PIC China, continued investment in the business as well as expected
working capital outflows. Solid cash conversion of 82%(1)
-- Net debt increased to GBP185.0m, with year-end net debt to
EBITDA ratio of 1.7x(1) , within 1.0x-2.0x targeted range
-- On 26 August 2022 Genus extended its multi-currency revolving
credit facility to 2025 and increased the facility by GBP40m (to
GBP190m) and USD $25m (to $150m) under an accordion option
-- Adjusted earnings per share 18% lower, final dividend in line
with prior year, with 2.6x(1) adjusted earnings cover
Continued strategic progress and investment for growth
-- Further genetic progress in pork, dairy and beef,
contributing to a reduction in use of energy, water and land in
animal protein production. Good progress on reduction of Genus's
carbon emissions, with the primary intensity ratio(4) reduced by
25% since FY19
-- Acquisition in Canada of Olymel LP's internal elite porcine
genetics programme, AlphaGene, for CAD$25m (GBP14.5m) in February
2022 progressing well, generating royalties in the second half
-- Significant capital investments to support growth including
expansion of the ABS Leeds facility in Wisconsin, completion of the
PIC Atlas facility in Canada in June 2022 and further roll out of
the GenusOne enterprise system, now live in over 60% of Genus's
business
-- Investments in digitalisation to deliver differentiation for
ABS's Gene Advance genetic offering and ecommerce capabilities
Building R&D capabilities and opportunity pipeline
-- PRRSv resistant pig programme on track, with final FDA
submissions expected to be made by December 2023
-- R&D pipeline strengthened from investments, with an
increase in the number of projects in the discovery and proof of
concept phases
Commenting on the performance and outlook, Stephen Wilson (Chief
Executive) said:
"The Group performed robustly, although challenging market
conditions in China porcine impacted the performance of PIC. We
also made good strategic progress and completed significant capital
investments including Atlas, PIC's new elite genetics farm in
Canada to support growth. Our strategic collaboration with Olymel,
which we announced during the year, is progressing well, further
strengthening PIC's North America business.
"Bovine producers faced more challenging conditions in the
second half of the year, as a result of significantly increased
input costs and the Ukraine war. However, ABS continued to grow
volumes and expand margins, driven by the success of Sexcel
(including expansion of sales through our third party IntelliGen
business), as well as strong growth in sales of our proprietary
NuEra beef genetics across all regions.
"PIC delivered strong growth in operating profits excluding PIC
China, underpinned by market share gains with key customers in
North America, Latin America, and Europe, despite challenging
political and macro-economic events. However, as expected, the
porcine market and COVID-19 lockdowns in China adversely affected
PIC China's trading during the second half of the year. The live
pig price in China remained below the cost of production and has
only showed signs of recovery since June.
"Over the summer, China's live pig prices have risen above 21
RMB/kg, improving confidence that the country's porcine industry is
on the path to recovery and profitability. Industry expectations
are that prices will continue to exceed 20 RMB/kg for the remainder
of 2022, although there could still be some further volatility.
Investments we have made to increase elite porcine supply chain
capacity position Genus well to support Chinese producers' needs
and benefit from the market recovery over time.
"The Board remains confident in the Group's strategy and the
many opportunities for Genus. Medium-term growth expectations
remain unchanged."
Results presentation today
A pre-recorded analysts and bankers briefing to discuss the
preliminary results for the year ended 30 June 2022 will be held
via a video webcast facility and will be accessible via the
following link from 7:01am today:
https://webcasting.buchanan.uk.com/broadcast/62c6c042d161177b45786de1
This will be followed by a live Q&A session to be held by
invitation via Zoom at 10:30am. Please contact Verity Parker at
Buchanan for details; verityp@buchanan.uk.com
Enquiries:
Genus plc (Stephen Wilson, Chief Executive Officer / Alison Tel: 01256 345970
Henriksen, Chief Financial Officer)
Buchanan (Charles Ryland / Chris Lane / Verity Parker) Tel: 0207 4665000
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 75 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 24 countries on six continents, with research
laboratories located in Madison, Wisconsin, USA.
(1) Adjusted results are the Alternative Performance Measures
('APMs') used by the Board to monitor underlying performance at a
Group and operating segment level, which are applied consistently
throughout. These APMs should be considered in addition to, and not
as a substitute for or as superior to statutory measures. For more
information on APMs, see APM Glossary.
(2) Constant currency percentage movements are calculated by
restating the results for the year ended 30 June 2022 at the
average exchange rates applied to adjusted operating profit for the
year ended 30 June 2021.
(3) n/m = not meaningful
(4) The primary intensity ratio is a measure of the Group's
Scope 1 and 2 emissions per tonne of animal weight
Chief Executive's Review
A robust performance was achieved by the Group despite some
highly challenging market conditions. We made good progress with
our strategy and continued to invest in the business and in
innovation, positioning us for growth and reflecting our confidence
in the future.
Group Performance
Revenue for the year was 2% higher (3% in actual currency), with
adjusted profit before tax down 18% in constant currency (16% in
actual currency). PIC China was a key factor in this performance
(see below). Excluding PIC China, adjusted profit before tax for
the Group was up 25% in constant currency (28% in actual
currency).
The macro environment proved particularly difficult for our
customers in the last year, due to a range of factors including
record grain, fuel and fertiliser prices and the ongoing impact of
COVID-19 on their operations. The Russian invasion of Ukraine sent
further shockwaves throughout producers' supply chains,
exacerbating inflationary pressures on input costs. While our
customers benefited from rising output prices in some markets,
these have generally lagged behind increases in input costs,
putting pressure on their margins.
Genus PIC revenue declined by 5% in constant currency, although
royalty revenue grew by 1%. Adjusted operating profit (including
joint ventures) was 13% lower than the previous year (all figures
in constant currency). Excluding China, PIC's revenue was up 4%,
royalty revenue was 8% higher and adjusted operating profit rose by
11%. This progress included PIC's fastest growth in North America
for a number of years, as a result of our investment in genetics
and capturing market share.
Conditions in China remained challenging, as previously
indicated. The China porcine market suffered from a combination of
reduced demand, due to COVID-19 lockdowns, and oversupply following
the heavy restocking after African Swine Fever. This resulted in
the industry making heavy losses during the year. More favourable
market conditions have emerged since the end of the financial year.
We continue to see strong long-term prospects for PIC in China as a
result of our product strength and the investments we have made to
significantly increase supply chain capacity and strengthen our
team.
Genus ABS grew volumes by 3% and increased revenue and adjusted
operating profit by 7% and 9% respectively, in constant currency,
despite the impact of an IT security incident, now fully resolved,
which affected June's trading in Brazil. The business continued to
see growing uptake of our NuEra beef genetics in dairy herds, which
contributed to a 9% increase in global beef volumes. ABS also
delivered further growth in Sexcel sexed genetics, with sexed
volumes being 18% higher.
We made further planned investments in R&D, which are
essential to the long-term development of the business, with
expenditure of GBP67.1m in the year: an increase of 6% in constant
currency. The PRRSv gene editing programme is on track and we
expect to complete FDA submissions by the end of 2023. We have also
made considerable progress in building our pipeline of other
R&D projects. Further details are set out below.
Strategic Progress
Our customers choose us because of the strength of our genetic
portfolio and we made good genetic progress across all species
during the year. In porcine, we further enhanced our portfolio
through our collaboration with Olymel in Canada. This has seen us
acquire all intellectual property in Olymel's elite porcine
genetics and sign an exclusive long-term genetics collaboration
agreement. The arrangement also increases PIC's footprint in the
Canadian market.
Our programme to produce PRRSv-resistant pigs is making
continued progress with the expansion of E2 generation homozygous
edited animals and further submissions to the FDA as planned. We
are focusing on our industry engagement and increasing production
capacity as the prospect of bringing PRRSv-resistant pigs to market
comes closer. We also have a pipeline of other gene editing
projects, primarily in porcine, and our investment in reproductive
technology is making progress.
Digitalisation is an important element of our strategy. In
particular, we are transforming ABS's digital capabilities to
improve our ability to engage with customers, demonstrate genetic
improvements in their herds and conduct digital sales and
marketing. The roll-out of our new enterprise system, GenusOne, is
also progressing, having gone live in Spain and Chile during the
year and in the UK shortly after the year end. With the UK rollout
now completed, over 60% of the Group's business is using the new
system.
This was a year of major investment in the business, which saw
our capital expenditure peaking. Atlas, our new elite porcine
genetics farm in Canada, opened in June 2022. Our investment in
ABS's facility in Leeds, Wisconsin, has given us increased bull
housing and production capacity, as well as generating efficiency
gains.
Sustainability
As a purpose-driven business focused on helping to nourish the
world, sustainability is core to our business model. We have an
important role in reducing the environmental impact of our
customers' operations, by delivering genetic improvement that helps
them achieve business goals while using fewer resources and cutting
their carbon footprints. This year, we became a founder member of
the Greener Cattle Initiative, an industry consortium that is
supporting research on how to mitigate methane emissions from
cattle. Since 2019 we have also made progress in the business with
our own carbon reduction goals, reducing by 25% our primary carbon
intensity, being tonnes of carbon emitted per tonne of animal
bodyweight. We have also reduced our absolute Scope 1 & 2
carbon footprint by 9% compared to the 2019 baseline.
People
Genus depends on attracting and retaining the best talent and I
want to thank everyone in the Group for their contribution this
year. Our Your Voice survey is a key way in which we measure
sentiment around the Group. We were pleased to achieve our
highest-ever response rate and strong results, with increases in
scores for almost all questions. Highlights included a further
increase in the percentage of our people who would recommend Genus
to their family or friends, which now stands at 82%, up from 79% in
the previous survey and 73% in 2017. In addition, some 89% of our
people said they enjoy working at Genus, versus 85% last time.
Outlook
As noted above, macro-economic conditions remain particularly
challenging for our customers in many parts of the world, however,
since the start of the 2023 fiscal year, China's live pig prices
have risen above 21 RMB/kg, improving confidence that the country's
porcine industry is on the path to recovery. There is still
uncertainty as to how sustained this will be and the implications
for demand for porcine genetics. Our investments in China position
us well to benefit from an upturn. More broadly our clear strategy,
strong product portfolio and depth of skill in our sales, services
and R&D teams give us confidence that we will continue to make
strategic and financial progress in fiscal year 2023 and beyond.
The Group remains well positioned to benefit from improving market
conditions when these occur and therefore our medium-term growth
expectations remain unchanged.
Financial and Operating Review
Financial Review
In the year ended 30 June 2022, the Group achieved revenue
growth of 3% in actual currency (2% in constant currency). However,
adjusted operating profit including joint ventures fell by 13% (15%
in constant currency), due to some significant market challenges.
These included rising inflation (driven particularly by increasing
energy prices), the impact of the war in Ukraine and, most notably,
turbulence in China's porcine industry following the sharp decline
in pig prices in 2021. The resultant decline in operating profit in
China had a significant impact on the Group's results. Excluding
PIC China, however, adjusted operating profit including joint
ventures increased by 28% (25% in constant currency).
On a statutory basis, profit before tax was GBP48.4m (2021:
GBP55.8m). The difference between statutory and adjusted profit
before tax principally reflected the reduction in the non-cash fair
value of IAS 41 biological assets and lower share-based payment
charge. Basic earnings per share on a statutory basis were 62.5
pence (2021: 72.6 pence).
The Group continued its significant R&D investment strategy,
up 7% (6% in constant currency). Excluding gene editing costs,
adjusted operating profit including joint ventures fell by 12% (14%
in constant currency) and adjusted profit before tax was down 16%
(18% in constant currency).
The effect of exchange rate movements on the translation of
overseas profits was to increase the Group's adjusted profit before
tax for the year by GBP1.8m, compared with 2021, primarily due to
the weakness of Sterling. 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 2022 at the average exchange rates applied to
adjusted operating profit for the year ended 30 June 2021.
Revenue
Revenue increased by 2% in constant currency (3% in actual
currency) to GBP593.4m (2021: GBP574.3m). PIC's revenue declined by
5% (3% in actual currency) as a result of the downturn of the
porcine market in China impacting our customers' demand for
genetics. In ABS, revenue was up 7% (9% in actual currency)
reflecting the continuing success of Genus's sexed and beef
genetics, particularly in China and Australia.
Adjusted Operating Profit Including JVs
Actual currency Constant
currency
change
---------
Year ended 30 June 2022 2021 Change
------ ------ ------ ---------
Adjusted Profit Before Tax(1) GBPm GBPm % %
Genus PIC 121.2 135.9 (11) (13)
Genus ABS 40.5 36.4 11 9
R&D (67.1) (62.5) (7) (6)
Central costs (16.9) (20.0) 16 18
------ ------ ------ ---------
Adjusted operating profit inc
JVs 77.7 89.8 (13) (15)
Net finance costs (6.2) (5.0) (24) (24)
------ ------ ------ ---------
Adjusted profit before tax 71.5 84.8 (16) (18)
====== ====== ====== =========
(1) Includes share of adjusted pre-tax profits of joint ventures
and removes share of adjusted profits of non-controlling
interests.
Adjusted operating profit including joint ventures was GBP77.7m
(2021: GBP89.8m), 15% lower in constant currency. The Group's share
of adjusted joint venture operating profit was lower at GBP9.2m
(2021: GBP13.0m), primarily due to weaker results in our porcine
JVs in China.
Gene editing investment, which is primarily focused on creating
pigs resistant to PRRSv, increased to GBP7.9m (2021: GBP7.6m) as we
expanded our population of gene-edited animals. Adjusted operating
profit including joint ventures and excluding gene editing
investment was GBP85.6m (2021: GBP97.4m), 14% lower, due to PIC
China's performance. However, the underlying business continues to
perform well and over the last five years our compound annual
growth rate in this profit measure has been 10% in constant
currency, in line with our medium-term objective.
PIC's performance during the year was affected particularly by
the situation in China and by market volatility in Latin America
and Europe. As a result, adjusted operating profit including joint
ventures was down 13% in constant currency. However, excluding
China, adjusted operating profit rose by 11%. Volumes were stable
and up 8% when China is excluded. Strategically important royalty
revenue was up 1% (8% excluding China), aided by increases of 17%
in Latin America and 7% in Europe, despite the challenging market
conditions. Royalty revenues in North America also grew by 7%,
primarily through strong sales of both our damline and sireline
products (particularly the PIC800 boar) and were further supported
by the integration of Olymel's AlphaGene breeding programme.
ABS's volumes rose by 3% and adjusted operating profit rose by
9%. The popularity of our proprietary bovine sexed product, Sexcel,
continued to increase, supporting sexed volumes up 18% compared to
a very high prior year growth rate of 29%. Increasing use of NuEra
beef genetics in dairy herds drove beef volume growth of 9%. Asia
increased adjusted operating profit by 24% in constant currency,
aided by strong growth in China and Australia. Latin America's
profits rose by 2%, lower than expected due to an IT security
incident in June which was quickly resolved but impacted the
business's ability to despatch product prior to the end of the
financial year. Europe's adjusted operating profit declined by 4%,
due particularly to market uncertainty driven by the Ukraine war
and rising input costs for producers, which were felt particularly
in the UK business and among our European distributors. In North
America, adjusted operating profit was 4% higher, with growth of
third-party sales of IntelliGen production contributing to profit
growth.
Central costs were 18% lower, at GBP16.9m (2021: GBP20.0m) in
constant currency, primarily due to a combination of prudent cost
management and lower performance related employee rewards.
Statutory Profit Before Tax
The table below reconciles adjusted profit before tax to
statutory profit before tax:
2022 2021
GBPm GBPm
Adjusted Profit Before Tax 71.5 84.8
Operating profit attributable to non-controlling
interest 0.3 0.1
Net IAS 41 valuation movement on biological
assets in JVs and associates (1.4) 3.1
Tax on JVs and associates (2.6) (3.0)
Adjusting items:
Net IAS 41 valuation movement on biological
assets (5.4) (10.8)
Amortisation of acquired intangible assets (8.3) (7.4)
Share-based payment expense (3.7) (7.7)
Exceptional items (2.0) (3.3)
------- -------
Statutory Profit Before Tax 48.4 55.8
======= =======
Statutory profit before tax was GBP48.4m (2021: GBP55.8m),
largely reflecting the decrease in the underlying trading
performance being partially offset by lower share-based payment
expense, lower exceptional items and a lower non-cash fair value
net IAS 41 biological asset movement. Within this, there was a
GBP24.5m uplift (2021: GBP6.4m uplift) in porcine biological assets
and a GBP29.9m reduction (2021: GBP17.2m reduction) in bovine
biological assets, due to certain fair value model estimate
changes. Share-based payment expense was GBP3.7m (2021: GBP7.7m).
These reconciling items are primarily non-cash, can be volatile and
do not correlate to the underlying trading performance in the
year.
Exceptional Items
There was a GBP2.0m net exceptional expense in the year (2021:
GBP3.3m expense), which included legal fees of GBP1.4m (2021:
GBP2.5m) in relation to Genus ABS's litigation with STgenetics. It
also includes a GBP3.3m credit relating to a non-refundable cash
receipt (net of fees) received for the assignment of rights to a
legacy legal claim in Brazil, and a GBP2.8m expense relating to a
restructuring programme in ABS North America's supply chain,
principally the closure of barns in Canada. Also contributing to
this expense was GBP0.5m of one-time costs to help us resolve the
IT security incident.
Net Finance Costs
Net finance costs increased to GBP6.2m (2021: GBP5.0m). This was
primarily caused by an increase in average borrowings, from
GBP122.0m in 2021 to GBP173.9m in 2022, increasing interest costs
by GBP0.8m. Higher market interest rates also increased interest
costs by GBP0.3m and there were also higher margin and utilisation
fees of GBP0.2m. Amortisation costs in the year were GBP0.9m (2021:
GBP0.9m) and within other interest there was GBP1.1m (2021:
GBP0.8m) of IFRS 16 finance lease interest and GBP0.4m (2021:
GBP0.9m) from the unwinding of discount interest on the Group's
pension liabilities and put options.
Taxation
The tax charge on the statutory profit in the year of GBP14.3m
(2021: GBP12.0m) represented an effective tax rate ('ETR') of 28.0%
(2021: 20.4%). The statutory tax charge included a one-off charge
of GBP2.2m (4.3%) in the year to reflect higher deferred tax rates
on China Porcine IAS41 assets and increased by 6.0% due to the
reduced share of Group profits arising in China, which benefits
from the availability of tax relief on owned production
agricultural activities.
The tax charge on adjusted profits in the year was GBP17.4m
(2021: GBP19.1m), which represented an adjusted ETR of 24.3% (2021:
22.5%). The adjusted tax charge for the year increased by
approximately 3% due to the reduced availability of tax relief in
China on owned production agricultural activities mentioned above.
This adverse movement was partially offset by a reduction in
foreign and withholding taxes due of 1.9%, increases in US R&D
and foreign tax credits of 1.2% and UK fixed asset timing
difference credits of 1.3%. The prior year adjusted tax rate
benefitted by 3.3% from the revaluation of UK deferred tax assets
to the future UK tax rate of 25%. The outlook for the Group
adjusted ETR is in the range of 23%-25%, consistent with the
current year and including the impact of the future UK tax rate
increase to 25% from April 2023.
Earnings Per Share
Adjusted basic earnings per share decreased by 18% (20% in
constant currency) to 82.7 pence (2021: 100.9 pence) reflecting the
impact of some significant market challenges, most notably in
China's porcine industry. Basic earnings per share on a statutory
basis were 62.5 pence (2021: 72.6 pence), as above but also
reflecting the impact of lower net IAS 41 biological asset
movement, lower share-based payments and lower exceptional
items.
Biological Assets
A feature of the Group's net assets is its substantial
investment in biological assets, which under IAS 41 are stated at
fair value. At 30 June 2022, the carrying value of biological
assets was GBP387.7m (2021: GBP337.3m), as set out in the table
below:
2022 2021
GBPm GBPm
Non-current assets 333.7 279.9
Current assets 33.1 39.6
Inventory 20.9 17.8
------ ------
387.7 337.3
====== ======
Represented by:
Porcine 278.8 227.4
Dairy and beef 108.9 109.9
------ ------
387.7 337.3
====== ======
The movement in the overall balance sheet carrying value of
biological assets of GBP50.4m includes the effect of exchange rate
translation increases of GBP36.7m. Excluding the translation effect
there was:
-- a GBP25.9m increase in the carrying value of porcine
biological assets, due principally to an increase in the number of
animals held in our new genetic nucleus farm in Canada; and
-- a GBP12.2m reduction in the bovine biological assets carrying
value, primarily due to increased production costs and higher risk
adjusted discount rate.
The historical cost of these assets, less depreciation, was
GBP77.2m at 30 June 2022 (2021: GBP65.1m), which is the basis used
for the adjusted results. The historical cost depreciation of these
assets included in adjusted results was GBP10.7m (2021:
GBP10.0m).
Retirement Benefit Obligations
The Group's retirement benefit obligations at 30 June 2022 were
GBP8.3m (2021: GBP11.1m) before tax and GBP7.0m (2021: GBP9.0m) net
of related deferred tax. The largest element of this liability now
relates to some legacy unfunded pension commitments dating prior to
the acquisition of PIC by Genus.
During the year, contributions payable in respect of the Group's
defined benefit schemes amounted to GBP3.5m (2021: GBP7.4m).
Deficit repair contributions to the Milk Pension Fund ('MPF') ended
in September 2021, which accounts for the reduction in
contributions, and we expect the cash payments for pension
contributions to reduce to GBP1.0m for FY23.
Robust investment strategies and higher bond yields during the
year for our two main defined benefit obligation schemes have led
to strengthened financial positions. Prior to any IFRIC 14
amendments, both the Dalgety Pension Fund and our share of the MPF
reported IAS 19 surpluses.
Cash Flow
2022 2021
Cash flow (before debt repayments) GBPm GBPm
Cash generated by operations 56.6 86.6
Interest and paid taxes (22.3) (19.1)
Capital expenditure (50.9) (33.8)
Cash received from JVs 3.2 3.7
Other (0.1) 0.1
------- -------
Free cash flow (13.5) 37.5
Acquisitions and investments (19.5) (16.9)
Dividends (20.9) (19.5)
Shares issued - 0.1
------- -------
Net cash (outflow)/inflow (before debt repayments) (53.9) 1.2
------- -------
Cash generated by operations of GBP56.6m (2021: GBP86.6m)
represented cash conversion of 82% (2021: 113%) of adjusted
operating profit excluding joint ventures. The cash conversion rate
of adjusted operating profit to cash was below our objective to
achieve conversion of at least 90% annually, however we expect this
to return to meeting this objective in the coming year. The
decrease in cash generation primarily reflected the impact of some
significant market challenges, most notably in China's porcine
industry and higher working capital outflows primarily due to
increased inventories, trade receivables and other receivables. The
increase in inventory is for Sexcel units and IntelliGen equipment
to support continued growth and availability of our industry
leading Sexcel product. Trade receivables increased through sales
activity, particularly in North America, and other debtors
primarily relate to China farm production security deposits.
Capital expenditure cash flow of GBP50.9m (2021: GBP33.8m)
included continued investment in the ABS supply chain (with
state-of-the-art new bull housing in Wisconsin) increasing PIC's
supply chain capacity (with a new genetic nucleus farm being
constructed in Canada) and investment in software development. Cash
inflow from joint ventures were GBP3.2m (2021: GBP3.7m). After
interest and tax paid, total free cash flow was GBP13.5m outflow
(2021: GBP37.5m inflow).
The cash outflow from investments was GBP19.5m (2021: GBP16.9m),
primarily involving GBP14.5m to acquire all intellectual property
in Olymel's elite porcine genetics, GBP2.2m to increase production
capacity through a China JV and GBP1.0m of deferred consideration
payments from previous acquisitions.
Net Debt and Credit Facilities
Net debt increased to GBP185.0m at 30 June 2022 (2021:
GBP105.6m), primarily due to the planned large capital expenditure
investments and acquisitions. On 30 June 2022, the Group had
headroom of GBP77.8m (2021:GBP129.3m) under its available credit
facilities.
During the year, the Group's principal credit facilities
comprised a GBP150m multi-currency revolving credit facility
('RCF'), a 125 million US dollar RCF and a 20 million US dollar
bond and guarantee facility. The original term of this facility was
for three years to 24 August 2023, with options to extend by a
further year before each of the first and second anniversaries. The
credit facility also included an uncommitted GBP100m accordion
option, which can be requested on a maximum of three occasions over
the lifetime of the facility. On 24 August 2021, the group and its
lenders extended the facility by a further year to 24 August 2024.
With effect from 26 August 2022, the Group and its lenders
increased the multi-currency RCF by GBP40m to GBP190m and the USD
RCF by USD 25m to USD 150m, and extended the maturity date of the
total facilities to 24 August 2025.
EBITDA, as calculated under our financing facilities, includes
cash received from joint ventures. Net debt as calculated under our
financing facilities excludes IFRS 16 lease liabilities up to a cap
of GBP30m but includes bank guarantees. The ratio of net debt to
EBITDA on this basis at the year-end has increased to 1.7 times
(2021: 0.9 times) which remains in line with our medium-term
objective of having a ratio of net debt to EBITDA of between 1.0 -
2.0 times. At the end of June 2022, interest cover was at 27 times
(2021: 45 times).
Return on Adjusted Invested Capital
The Group's return on adjusted invested capital is measured
using adjusted operating profit including joint ventures after tax,
divided by the operating net assets of the business on the
historical cost basis and excluding net debt and pension
liabilities. This removes the impact of IAS 41 fair value
accounting, the related deferred tax and goodwill. The post-tax
return on adjusted invested capital was lower at 13.9% (2021:
23.0%), reflecting the lower profit and increased asset base from
the capital investments in supply chain capacity and the
acquisition of Olymel's AlphaGene programme. The total increase in
the invested capital asset base was GBP119m of which circa GBP40m
was due to foreign exchange translation impacts.
Dividend
Recognising the importance of balancing investment for the
future with ensuring an attractive return for shareholders, the
Board is recommending a final dividend of 21.7 pence per ordinary
share, consistent with the prior year final dividend. When combined
with the interim dividend, this will result in a total dividend for
the year of 32.0 pence per ordinary share (2021: 32.0 pence per
share), the same as prior year. Dividend cover from adjusted
earnings of 2.6 times (2021: 3.2 times), is within the medium-term
target of an adjusted earnings cover range of 2.5 to 3.0 times.
It is proposed that the final dividend will be paid on 9
December 2022 to the shareholders on the register at the close of
business on 18 November 2022.
Genus PIC - Operating Review
Actual currency Constant
currency
change
---------
Year ended 30 June 2022 2021 Change
----- ----- -------- ---------
GBPm GBPm % %
Revenue 306.6 315.6 (3) (5)
Adjusted operating
profit exc JV 112.3 122.9 (9) (10)
Adjusted operating
profit inc JV 121.2 135.9 (11) (13)
Adjusted operating
margin exc JV 36.6% 38.9% (2.3)pts (2.3)pts
Pig producers across the world faced a series of significant
challenges, which increased in the second half of the year. China,
the world's largest porcine market, experienced a significant
cyclical downturn during a period of very restrictive COVID-19
lockdown measures. China pig prices averaged 14.6 RMB/kg through
the year , down 50% on the prior year. African Swine Fever (ASF) is
an ongoing challenge for Chinese producers and during the year the
virus spread into Germany. As the year went on, challenging labour
markets and the war in Ukraine contributed to rising inflation,
which had a significant impact on input costs for producers.
Greater risks faced by producers meant there was less appetite to
expand, leading to lower industry growth and lower producer
profitability in most major porcine markets.
PIC's adjusted operating profit was 13% lower than in the
previous year in constant currency. This was driven particularly by
an 84% fall in operating profit within China. Volumes were stable,
with revenue down 5% but strategically important royalty revenue up
1% (both in constant currency).
However, outside China, the business delivered solid growth.
Excluding China, PIC increased adjusted operating profit by 11%.
Volumes rose by 8%, revenue increased by 4% and royalty revenue
increased by 8% (both in constant currency).
Overall, therefore, the business continued to make progress in
many parts of the world while navigating volatility in China. We
also continued to invest in the supply chain to position for
further growth. Our largest investment was the new Atlas nucleus
farm in Canada, which was completed in June 2022.
North America
Near-record US pig prices in the first six months of the year
driven by robust domestic demand and declines in both building and
feed costs were tempered by market volatility, rising inflation and
a partial reversal in feed cost trends in the second half. However,
the market remains strong, both domestically and for exports, where
higher demand from Mexico is making up for lower demand from China.
The USDA projects pig production to remain relatively consistent in
2022.
Performance: Strongest performance in recent years, with rises
in market share of 5% for sireline products (aided by the
introduction of the PIC800 to customer herds) and 2% for damline
products. Royalties from Olymel commenced in the second half of the
year following the acquisition of Olymel's AlphaGene programme in
February 2022.
-- volumes +9%
-- revenue +9% and royalty revenue + 7%
-- adjusted operating profit +7%
Latin America
Producer profitability in Latin America was also affected by
rising production costs in the second half of the year. However,
domestic demand remained strong throughout the period, compared to
the previous year. Brazil is the region's largest exporter of pork,
but a collapse in demand from China coupled with rising inflation
means that many producers are currently experiencing margin
pressure.
Performance: Growth in royalties supported a strong revenue and
adjusted operating profit performance, with double-digit growth in
many countries, partially offset by lower joint venture income in
Brazil.
-- volumes +8%
-- revenue +16% and royalty revenue +17%
-- adjusted operating profit +5%
Europe
Producers across the region experienced challenging conditions
in a highly volatile market. While domestic demand remained stable,
the spread of ASF into Germany and the industry downturn in China
led to a 22% fall in exports. During the year, pork production and
the region's breeding herd declined. The war in Ukraine
significantly increased input costs and market uncertainty, which
meant that many European producers made losses, despite higher pig
prices.
Performance: Increased breeding stock sales supported by supply
chain investments and partnerships with Hermitage, Møllevang and
Sergal. Further success through strategic focus on royalty
revenues, strong growth in Spain and continued operations in
Russia.
-- volumes +7%
-- revenue -6% and royalty revenue +7%
-- adjusted operating profit +1%
Asia
The downturn in China contrasted with market trends elsewhere in
Asia. A cyclical oversupply and weak consumer demand (primarily
caused by COVID-19 lockdown restrictions) led to a sharp decline in
pig prices during the year, with producers incurring significant
operating losses. Higher input costs also meant the break-even
point for most producers rose to over 18 RMB/kg. However, during
June pig prices began to show recovery, as they rose to almost
19RMB/kg by the end of the month. They reached more than 21 RMB/kg
in July and August.
Performance: Growth outside China (adjusted operating profit
+25% and revenue +19%), particularly in the Philippines, contrasted
with the decline in trading in China. Commercial terms with a large
PIC China customer were changed in the period to more closely align
the economic interests of a unique outcome-based royalty contract
in place. This resulted in a one-time refund of GBP4.1m, related to
historical royalties.
-- volumes -31% (China -42%)
-- revenue -34% and royalty revenue -32% (China -48% and -39% respectively)
-- adjusted operating profit -69% (China -84%)
Genus ABS - Operating Review
Actual currency Constant
currency
change
---------
Year ended 30 June 2022 2021 Change
----- ----- ------ ---------
GBPm GBPm % %
Revenue 272.0 250.1 9 7
Adjusted operating
profit 40.5 36.4 11 9
Adjusted operating
margin 14.9% 14.6% 0.3pts 0.2pts
In the first half of the year, the Global Dairy Trade Whole Milk
Powder price continued to rise, fuelled by increasing demand
following the easing of COVID-19 lockdowns in most geographies. It
reached its highest level for over eight years in March, but
subsequently declined in the face of economic uncertainty and
rising inflation. Rising input costs in areas such as feed, fuel,
energy and labour in the second half of the year impacted dairy
producer profitability. These cost increases, to which the war in
Ukraine and weather-related issues were contributory factors, also
led to a decline in milk production during the year.
The same issues affected beef producers, but prices remained
high during the year, partially due to low cattle numbers in some
countries and strong demand from the foodservice industry following
the relaxation of COVID-19 restrictions. However, there are some
signs that consumer demand may be softening in China (due to
COVID-19 lockdowns) and in the US (as consumers spend less in the
face of rising inflation), with resultant pressure on beef
prices.
ABS maintained its growth trajectory, with volumes rising by 3%
and revenue by 7% in constant currency. The business increased
adjusted operating profit by 9% in constant currency, despite the
impact of an IT security incident, now fully resolved, which
affected Brazil's trading in June and we estimate the profit impact
to have been GBP0.9m. This progress was underpinned by a growing
number of partnerships with progressive dairy producers, using the
combination of Sexcel and NuEra beef genetics within comprehensive
genetic programmes. ABS also continued to expand and strengthen
relationships with participants across the beef supply chain. As a
result, global sexed volumes rose by 18% and beef volumes by 9%
during the year.
North America
Further dairy industry consolidation led to fewer farms with
larger herds, but no change in cow numbers. Higher input costs
reduced margins for producers, despite record milk prices,
increasing caution over investment in replacement heifers for
herds. By contrast, the beef market was buoyed by high prices for
calves, increasing production and robust export demand, although
there are signs that consumer demand is now weakening due to rising
inflation.
Performance: Strong volume increases driven by growth of
exclusive relationships with strategic accounts, continued growth
in the IntelliGen third party business and NuEra beef volumes up
33%.
-- total volumes +8%, sexed volumes +10%, beef volumes +24%
-- revenue +4%
-- adjusted operating profit +4%
Latin America
Dairy production declined during the year due to a combination
of lower herd numbers, drought, and high input costs. In contrast,
the beef industry continued to grow, with production up 6% in
Brazil (particularly following the lifting of the Chinese embargo
on Brazilian beef exports) and 2% in Mexico (with prices in Mexico
20% higher on average than the previous year). Inflation continued
to affect consumption of both beef and dairy products during the
year, as household purchasing power was eroded across middle-income
groups.
Performance: Slightly lower volumes (although 89% increase in
tropical ABS XBlack genetics, aided by further digital sales
campaigns), mitigated by robust pricing policies. Trading in June
was affected by the IT security incident, which was resolved in the
month. This impacted the business's ability to despatch product
prior to the end of the financial year which, by our estimates,
impacted FY22 volumes by 4% with an associated profit impact of
GBP0.9m. Without this, Latin America profit growth would have been
around 11%.
-- total volumes -5%, sexed volumes -3%, beef volumes -1%
-- revenue +5%
-- adjusted operating profit +2%
Europe
The war in Ukraine and its impact on input costs created
uncertainty in most markets. Despite these costs and
weather-related issues, which contributed to lower production
across the region, milk prices remained high and are expected to
rise further in the coming months. Beef production declined, with
increases in some countries failing to compensate for reductions in
countries like Germany and France. Lower production led to higher
prices, but rising inflation risks dampening consumer demand.
Performance: Partnerships with a growing range of strategic
accounts involving genomic testing and comprehensive genetic
programmes drove growth in higher-priced sexed and beef products,
as well as the IntelliGen third party business. Robust pricing
policies mitigated inflationary cost pressures, however market
uncertainty caused lower volumes and profits, particularly in the
UK and distributor markets.
-- total volumes -2%, sexed volumes +8%, beef volumes +9%
-- revenue +5%
-- adjusted operating profit -4%
Asia
Consolidation of the Chinese dairy industry drove increasing
demand for sexed genetics, supported by growth in domestic
production and imports, although this tapered off later in the year
as consumer demand weakened (a factor which also affected the beef
industry). In Australia, favourable weather conditions and low herd
numbers fuelled record beef prices, while the dairy industry
benefitted from China's demand for live heifers.
Performance: Good growth across the region, underpinned by
strong progress in China and Australia and further contract wins in
India.
-- total volumes +13%, sexed volumes +32%, beef volumes +37%
-- revenue +28%
-- adjusted operating profit +24%
Research and Development - Operating Review
Actual currency Constant
currency
change
Year ended 30 June 2022 2021 Change
----- ---- ------
GBPm GBPm % %
Porcine product development 22.5 21.9 3 1
Bovine product development 22.7 19.7 15 13
Gene editing 7.9 7.6 4 1
Other research and
development 14.0 13.3 5 5
----- ---- ------ ---------
Net expenditure in
R&D 67.1 62.5 7 6
During the year, Genus increased its investment in net research
and development expenditure by 6% in constant currency. This
investment supported gene editing projects, enhanced IntelliGen
production capacity, expanded elite porcine farm populations and
strengthened the research and development pipeline.
Porcine product development
Porcine product development maintained Genus's industry-leading
product differentiation. Further progress on genomic selection,
coupled with advances in digital phenotyping, enabled Genus to
accelerate genetic gain and amplify new traits related to
robustness and efficiency. We expect these advances, along with
initial production from new elite facilities, Barrick Family Farms
(in the United States) and PIC's Atlas facility (in Canada) which
have both now been completed, to increase availability of our
industry-leading genetics for North America and global exports
during FY23.
Bovine product development
Bovine product development delivered a highly competitive
portfolio of dairy and beef genetics. De Novo Genetics, our joint
venture with De-Su Holsteins, produced over 50% of new Holstein
bulls introduced to the market. Further investment in our
proprietary NuEra beef genetics (a rise of 25% expenditure on the
previous year) helped ABS continue to increase their representation
within total beef volumes, of which NuEra now account for one
third. In parallel, validation trials in customer systems
reinforced NuEra's superior performance over competitor genetics.
We also expanded production capacity for sexed bovine genetics,
internally and with third-party customers, and won a Government of
India tender for IntelliGen sexed semen production, which we will
begin fulfilling during FY23.
Gene editing
Genus continued to advance the PRRSv resistance project
according to plan. During the year, we expanded our population of
gene-edited animals so we could start additional regulatory studies
for the US Food and Drug Administration while pursuing our plan for
regulatory approval in target markets around the world. We also
continued proactive and positive engagement with stakeholders
within and outside the pork supply chain. Through these
engagements, we are explaining our responsible use of gene-editing
technology and exploring the benefits that PRRSv-resistant animals
will bring for animal well-being, for farmers and for efforts to
meet evolving consumer expectations around environmental
sustainability and food security.
Other research and development
Other research and development expenditure increased by 5%. This
focused on supporting research in the field of reproductive biology
and expansion of our data science capabilities, as well as further
work on genome science and the development of our bioinformatics
platform. We also continued to collaborate with external partners
in a variety of discovery areas.
Principal Risks and Uncertainties
Genus is exposed to a wide range of risks and uncertainties as
it fulfils its purpose of providing farmers with superior genetics,
which in turn supports the fulfilment of its vision of nourishing
the world more sustainably.
Some of these risks relate to the current business operations in
our global agricultural markets, while others relate to future
commercial exploitation of our leading-edge R&D programmes. We
are also exposed to global economic and political risks such as
trade restrictions heightened by the Russia-Ukraine conflict.
As part of our risk management process we monitor emerging risks
and consider when to include them in our main risk assessment
process. This year our reviews included:
-- the impact of the Russia-Ukraine conflict,
-- macroeconomic conditions,
-- cyber security, and
-- the impacts of COVID-19.
The Russia-Ukraine conflict has increased several principal
risks and we have added cyber security to the principal risks as a
result of the increasing sophistication and frequency of
cyber-crime and a recent IT security incident support elevating
cyber to a principal risk. In addition, we continue to monitor the
impact of COVID-19 across our global operations and Brexit for our
European operations, although both have not materially impacted our
operations to date.
In our first year of reporting TCFD we have undertaken a limited
qualitative analysis of climate related risks for alternative
climate scenarios (RCP 2.6 vs RCP 4.5) with the support of an
external specialist. This has informed our risk descriptions in
relation to climate change as they relate to our principal risks
and to our TCFD reporting. We continue to monitor emerging risks
related to the worsening global macroeconomic impact on our
business.
In June 2022, the company experienced an IT security incident
which had a limited impact on the company's systems. The incident,
which involved ransomware, was confined to on-premise systems, with
minimal impact to entities operating on GenusOne. However, impacts
on certain local systems did disrupt operations for a short period,
particularly in Latin America. With the support of external
specialists, management fully restored all systems and files prior
to the June month-end. Improvements to system controls and
monitoring activities to detect and help prevent future security
incidents have been implemented across the IT environment. No
ransom was paid.
From our broad risk universe, we have identified eleven
principal risks, which we regularly evaluate based on an assessment
of the likelihood of occurrence and the magnitude of potential
impact, together with the effectiveness of our risk mitigation
controls.
The Directors confirm that they have undertaken a robust
assessment of the principal and emerging risks and uncertainties
facing the Group.
Risk Risk description How we manage Risk change in
risk FY22
DEVELOPING Dedicated teams No change. Our
PRODUCTS * Development programmes fail to produce best genetics align our analysis and
WITH COMPETITIVE for customers. product benchmarking
ADVANTAGE development to continue to
customer support
* Increased competition to secure elite genetics. requirements. our genetic
We use improvements.
large-scale
data and
advanced
genomic analysis
to ensure we
meet
our breeding
goals.
We frequently
measure
our performance
against
competitors
in customers'
systems,
to ensure the
value
added by our
genetics
remains
competitive.
------------------------------------------------------------ ----------------- -----------------
CONTINUING TO Our continued Increased. New
SUCCESSFULLY * Failure to manage the technical, production and development Gen2 machines
DEVELOP financial risks associated with the rapid development of the launched
INTELLIGEN of the IntelliGen business. technology during the year
TECHNOLOGY and its are being
deployment monitored
to new markets and recalibrated
is supported by seeking to
dedicated optimise
internal performance in
resources and line with
agreements specifications.
with suppliers. Uncertainty over
Current patent further legal
infringement actions
proceedings and
initiated by uncertainties
STgenetics in relation to
in the US are patent
being infringements.
vigorously
defended.
------------------------------------------------------------ ----------------- -----------------
DEVELOPING AND We stay aware of No change. Key
COMMERCIALISING * Failure to develop successfully and commercialise new technology initiatives
GENE EDITING AND gene editing technologies due to technical, opportunities continue
OTHER NEW intellectual property ('IP'), market, regulatory or through to progress
TECHNOLOGIES financial barriers. a wide network through
of academic and the R&D
industry lifecycle,
* Competitors secure 'game-changing' new technology. contacts. and we maintain
Our Genus the high level
Portfolio of investment
Steering needed
Committee to bring the end
oversees our products to
research, market.
ensures we
correctly
prioritise our
R&D investments
and assesses the
adequacy of
resources
and the relevant
IP landscapes.
We have formal
collaboration
agreements
with key
partners,
to ensure
responsible
exploration and
development of
technologies and
the protection
of IP. The Board
is updated
regularly
on key
development
projects.
------------------------------------------------------------ ----------------- -----------------
CAPTURING VALUE We have a No change. We
THROUGH * Failure to identify appropriate investment rigorous continue
ACQUISITIONS opportunities or to perform sound due diligence. acquisition to work
analysis diligently
and due to identify
* Failure to successfully integrate an acquired diligence areas
business. process, with of opportunity
the consistent with
Board reviewing our strategic
and signing off plans
all material and our aim to
projects. accelerate
We also have a growth
structured and create value
post-acquisition for our
integration shareholders.
planning Our experiences
and execution with post
process. acquisition
integration
provide
a platform for
integrating
newly
acquired
businesses.
------------------------------------------------------------ ----------------- -----------------
SUCCEEDING IN Our organisation Increased. This
GROWTH * Failure to appropriately develop our business in blends local and is due to market
MARKETS China and other growth markets. expatriate price volatility
executives, and uncertainty
supported by the affecting
global species production
teams, to allow and
us to grow our profitability
business in key in the China
markets, while porcine
managing risks market, the
and ensuring we Russia-Ukraine
comply with our conflict and the
global standards worsening global
and comply with macroeconomic
sanctions. We conditions.
also
establish local
partnerships
where
appropriate, to
increase market
access.
------------------------------------------------------------ ----------------- -----------------
SUSTAINABILITY We have a global No change. We
* Failure to lead the market in sustainable animal sustainability have
protein production and help our customers to meet the strategy and developed our
challenge of producing meat and milk efficiently and climate 2030
sustainably as climate change increases demand. change policy emissions
that reduction
are approved, plan (and 2050
* Failure to fulfil our commitment to reduce the and net zero plan)
environmental impact of our own operations and regularly and developed
implement our Climate Change Policy and TCFD reviewed, quantifiable,
reporting. at Board level. robust
Our performance
Sustainability indicators in
Committee relation
oversees to life-cycle
the carbon
implementation reduction (per
of the strategy generation) of
and the annual pigs, beef and
objective dairy cows.
setting
process as well
as monitoring
progress
using key
performance
indicators. The
Board is updated
regularly on the
progress of the
key initiatives
and our progress
against the
annual
targets. The
Company
ensures
climate-related
responsibilities
and incentives
are appropriate
at management
levels
and considers
climate-related
implications
within
important
processes
including
capital
expenditure and
procurement.
With
support from
external
risk specialist
consultants, we
have undertaken
comprehensive
analysis
of our
climate-related
risks and
opportunities
which forms a
basis
of future
monitoring
and quantitative
assessment.
------------------------------------------------------------ ----------------- -----------------
PROTECTING IP We have a No change. We
* Failure to protect our IP could mean Genus-developed global, continue
genetic material, methods, systems and technology cross-functional actively to
become freely available to third parties. process to protect
identify our IP by filing
and protect our patents
IP. Our customer attributed
contracts and to our R&D
our activity.
selection of
multipliers
and joint
venture
partners include
appropriate
measures
to protect our
IP. We maintain
IP appropriate
landscape
watches
and where
necessary
conduct robust
'freedom to
operate'
searches, to
identify
third-party
rights
to technology.
------------------------------------------------------------ ----------------- -----------------
ENSURING We have Increased. This
BIOSECURITY * Loss of key livestock, owing to disease outbreak. stringent is due to the
AND CONTINUITY biosecurity continued
OF SUPPLY standards, global supply
* Loss of ability to move animals or semen freely with independent chain
(including across borders) due to disease outbreak, reviews challenges
environmental incident or international trade throughout imposed
sanctions and disputes. the year to by the COVID-19
ensure outbreak, the
compliance. We continued
* Lower demand for our products, due to industry-wide investigate spread of ASF,
disease outbreaks. biosecurity and trade
incidents, to sanctions.
ensure Our
learning across geographically
the diverse
organisation. production
We regularly facilities and
review the expert
the geographical knowledge
diversity of our of our supply
production chain
facilities, and commercial
to avoid teams allowed
over-reliance for
on single sites. a swift and
comprehensive
response to
these
challenges,
which
helped to reduce
their impact.
------------------------------------------------------------ ----------------- -----------------
HIRING AND We have a robust Increased. An
RETAINING * Failure to attract, recruit, develop and retain the talent and increased
TALENTED PEOPLE global talent needed to deliver our growth plans and succession demand post
R&D programmes. planning Covid-19
process, for more
including annual flexible
assessments of working, and
our global current
talent inflationary
pool and active pressures
leadership across the globe
development may lead to
programmes. The greater
Group's reward attrition.
and remuneration
policies are
reviewed
regularly, to
ensure
their
competitiveness.
We work closely
with several
specialist
recruitment
agencies,
to identify
candidates
with the skills
we need.
------------------------------------------------------------ ----------------- -----------------
CYBER SECURITY We utilise a New principal
* Failure to adequately detect and mitigate a malicious flexible risk.
cyber-attack by internal or external activists and multi-layered We have noted an
the ability to quickly recover. approach increased
that focuses on sophistication
employee and frequency of
* Failure to properly protect our data an systems from awareness cyber-crime and
an attack. and training, were subject to
policies, a ransomware
software, and a attack,
third-party 24 which was
x 7 monitoring successfully
Security resolved without
Operations payment of a
Centre and ransom.
follow
ISO 27001
standards.
We have improved
our system and
data backup
procedures
and hardened our
servers to
further
strengthen our
resilience. Our
GenusOne
programme
continues to
progress
well, improving
our operational
controls and IT
Security as we
move to the
cloud.
------------------------------------------------------------ ----------------- -----------------
MANAGING We continuously Increased. This
AGRICULTURAL * Fluctuations in agricultural markets affect customer monitor markets is due to
MARKET AND profitability and therefore demand for our products and seek to increased
COMMODITY and services. > Increase in our operating costs due balance feed input costs
PRICES VOLATILITY to commodity pricing volatility. > Longer-term our costs and as a result of
influence of climate factors on the cost and resources higher grain
availability of agricultural inputs (animal feed) > in response to prices,
Macroeconomic downturn accelerated by COVID-19 and market demand. due to the
geopolitical tensions > The Russia-Ukraine conflict We actively Russia-Ukraine
impact on agricultural markets. monitor conflict,
and update our changes
hedging strategy in weather
to manage our patterns,
exposure. and strong
Our porcine demand.
royalty In addition, the
model and China pork
extensive market
use of continued to
third-party deal
multipliers with the
mitigates challenges
the impact of of ASF, price
cyclical decline,
price and/or higher input
cost costs
changes in pig and rolling
production. Our COVID-19
R&D programmes lockdowns.
measure and
track
progress in our
breeding
programmes
which reduce the
life-cycle
carbon
footprint of
meat
and dairy
production
for each new
generation
which is
quantifiable.
------------------------------------------------------------ ----------------- -----------------
Group Income Statement
For the year ended 30 June 2022
2022 2021
Note GBPm GBPm
---------------------------------------------------------- ---- ------ ------
REVENUE 3 593.4 574.3
---- ------ ------
Adjusted operating profit 3 68.8 76.9
---- ------ ------
Adjusting items:
---- ------ ------
- Net IAS 41 valuation movement on biological assets 10 (5.4) (10.8)
---- ------ ------
- Amortisation of acquired intangible assets 9 (8.3) (7.4)
---- ------ ------
- Share-based payment expense (3.7) (7.7)
---------------------------------------------------------- ---- ------ ------
(17.4) (25.9)
---- ------ ------
Exceptional items (net) 4 (2.0) (3.3)
---------------------------------------------------------- ---- ------ ------
Total adjusting items (19.4) (29.2)
OPERATING PROFIT 49.4 47.7
---- ------ ------
Share of post-tax profit of joint ventures and associates
retained 5.2 13.1
---- ------ ------
Finance costs 5 (6.6) (5.4)
---- ------ ------
Finance income 5 0.4 0.4
---------------------------------------------------------- ---- ------ ------
PROFIT BEFORE TAX 48.4 55.8
---- ------ ------
Taxation 6 (11.7) (9.0)
---------------------------------------------------------- ---- ------ ------
PROFIT FOR THE YEAR 36.7 46.8
---------------------------------------------------------- ---- ------ ------
ATTRIBUTABLE TO:
---- ------ ------
Owners of the Company 40.9 47.3
---- ------ ------
Non-controlling interest (4.2) (0.5)
---------------------------------------------------------- ---- ------ ------
36.7 46.8
---------------------------------------------------------- ---- ------ ------
EARNINGS PER SHARE
---- ------ ------
Basic earnings per share 7 62.5p 72.6p
---- ------ ------
Diluted earnings per share 7 62.2p 72.0p
---------------------------------------------------------- ---- ------ ------
2022 2021
Note GBPm GBPm
---------------------------------------------------------- ---- ----- ------
Alternative Performance Measures
---------------------------------------------------------- ---- ----- ------
Adjusted operating profit 68.8 76.9
---------------------------------------------------------- ---- ----- ------
Adjusted operating profit attributable to non-controlling
interest (0.3) (0.1)
---------------------------------------------------------- ---- ----- ------
Pre-tax share of profits from joint ventures and
associates excluding net IAS 41 valuation movement 9.2 13.0
---------------------------------------------------------- ---- ----- ------
Gene editing costs 7.9 7.6
---------------------------------------------------------- ---- ----- ------
Adjusted operating profit including joint ventures
and associates, excluding gene editing costs 85.6 97.4
---------------------------------------------------------- ---- ----- ------
Gene editing costs (7.9) (7.6)
---------------------------------------------------------- ---- ----- ------
Adjusted operating profit including joint ventures
and associates 77.7 89.8
---------------------------------------------------------- ---- ----- ------
Net finance costs 5 (6.2) (5.0)
---------------------------------------------------------- ---- ----- ------
Adjusted profit before tax 71.5 84.8
---------------------------------------------------------- ---- ----- ------
Adjusted earnings per share
---------------------------------------------------------- ---- ----- ------
Basic adjusted earnings per share 7 82.7p 100.9p
---------------------------------------------------------- ---- ----- ------
Diluted adjusted earnings per share 7 82.3p 100.1p
---------------------------------------------------------- ---- ----- ------
Adjusted results are the Alternative Performance Measures
('APMs') used by the Board to monitor underlying performance at a
Group and operating segment level, which are applied consistently
throughout. These APMs should be considered in addition to
statutory measures, and not as a substitute for or as superior to
them. For more information on APMs, see APM Glossary.
Group Statement of Comprehensive Income
For the year ended 30 June 2022
2022 2022 2021 2021
Note GBPm GBPm GBPm GBPm
-------------------------------------------------- ---- ------ ----- ------ ------
PROFIT FOR THE YEAR 36.7 46.8
-------------------------------------------------- ---- ------ ----- ------ ------
Items that may be reclassified subsequently
to profit or loss
-------------------------------------------------- ---- ------ ----- ------ ------
Foreign exchange translation differences 66.6 (45.2)
-------------------------------------------------- ---- ------ ----- ------ ------
Fair value movement on net investment
hedges (0.7) 0.4
-------------------------------------------------- ---- ------ ----- ------ ------
Fair value movement on cash flow hedges 1.9 0.2
-------------------------------------------------- ---- ------ ----- ------ ------
Tax relating to components of other comprehensive
expense (8.2) 7.6
-------------------------------------------------- ---- ------ ----- ------ ------
59.6 (37.0)
-------------------------------------------------- ---- ------ ----- ------ ------
Items that may not be reclassified subsequently
to profit or loss
-------------------------------------------------- ---- ------ ----- ------ ------
Actuarial gains on retirement benefit
obligations 14 27.3 22.3
-------------------------------------------------- ---- ------ ----- ------ ------
Movement on pension asset recognition
restriction 14 (69.8) (0.1)
-------------------------------------------------- ---- ------ ----- ------ ------
Release/(recognition) of additional pension
liability 14 43.7 (19.9)
-------------------------------------------------- ---- ------ ----- ------ ------
(Loss)/gain on equity instruments measured
at fair value (6.1) 6.7
-------------------------------------------------- ---- ------ ----- ------ ------
Tax relating to components of other comprehensive
income/(expense) 1.1 (2.0)
-------------------------------------------------- ---- ------ ----- ------ ------
(3.8) 7.0
-------------------------------------------------- ---- ------ ----- ------ ------
OTHER COMPREHENSIVE INCOME/(EXPENSE)
FOR THE YEAR 55.8 (30.0)
-------------------------------------------------- ---- ------ ----- ------ ------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 92.5 16.8
-------------------------------------------------- ---- ------ ----- ------ ------
ATTRIBUTABLE TO:
-------------------------------------------------- ---- ------ ----- ------ ------
Owners of the Company 97.3 17.1
-------------------------------------------------- ---- ------ ----- ------ ------
Non-controlling interest (4.8) (0.3)
-------------------------------------------------- ---- ------ ----- ------ ------
92.5 16.8
-------------------------------------------------- ---- ------ ----- ------ ------
Group Statement of Changes in Equity
For the year ended 30 June 2022
Called
up Share Trans- Non-
share premium Own lation Hedging Retained controlling Total
capital account shares reserve reserve earnings Total interest equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
BALANCE AT 30 JUNE
2020 6.5 179.1 (0.1) 29.5 (0.2) 280.7 495.5 (1.0) 494.5
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Foreign exchange
translation
differences, net of
tax - - - (37.7) - - (37.7) 0.2 (37.5)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Fair value movement
on
net investment
hedges,
net of tax - - - 0.3 - - 0.3 - 0.3
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Fair value movement
on
cash flow hedges,
net
of tax - - - - 0.2 - 0.2 - 0.2
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Gain on equity
instruments
measured at fair
value,
net of tax - - - - - 5.0 5.0 - 5.0
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Actuarial gains on
retirement
benefit obligations,
net
of tax - - - - - 19.8 19.8 - 19.8
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Movement on pension
asset
recognition
restriction,
net of tax - - - - - (0.1) (0.1) - (0.1)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Recognition of
additional
pension liability,
net
of tax - - - - - (17.7) (17.7) - (17.7)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Other comprehensive
(expense)/income
for the year - - - (37.4) 0.2 7.0 (30.2) 0.2 (30.0)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Profit/(loss) for the
year - - - - - 47.3 47.3 (0.5) 46.8
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Total comprehensive
(expense)/income
for the year - - - (37.4) 0.2 54.3 17.1 (0.3) 16.8
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Recognition of
share-based
payments, net of tax - - - - - 4.9 4.9 - 4.9
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Dividends 8 - - - - - (19.5) (19.5) - (19.5)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Adjustment arising
from
change in
non-controlling
interest and written
put
option - - - - - - - (0.2) (0.2)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Issue of ordinary
shares 0.1 - - - - - 0.1 - 0.1
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
BALANCE AT 30 JUNE
2021 6.6 179.1 (0.1) (7.9) - 320.4 498.1 (1.5) 496.6
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Foreign exchange
translation
differences, net of
tax - - - 59.4 - - 59.4 (0.6) 58.8
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Fair value movement
on
net investment
hedges,
net of tax - - - (0.6) - - (0.6) - (0.6)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Fair value movement
on
cash flow hedges,
net
of tax - - - - 1.4 - 1.4 - 1.4
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Loss on equity
instruments
measured at fair
value,
net of tax - - - - - (4.6) (4.6) - (4.6)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Actuarial gains on
retirement
benefit obligations,
net
of tax - - - - - 19.5 19.5 - 19.5
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Movement on pension
asset
recognition
restriction,
net of tax - - - - - (49.7) (49.7) - (49.7)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Recognition of
additional
pension liability,
net
of tax - - - - - 31.0 31.0 - 31.0
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Other comprehensive
(expense)/income
for the year - - - 58.8 1.4 (3.8) 56.4 (0.6) 55.8
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Profit/(loss) for the
year - - - - - 40.9 40.9 (4.2) 36.7
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Total comprehensive
(expense)/income
for the year - - - 58.8 1.4 37.1 97.3 (4.8) 92.5
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Recognition of
share-based
payments, net of tax - - - - - 4.0 4.0 - 4.0
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Dividends 8 - - - - - (20.9) (20.9) - (20.9)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Adjustment arising
from
change in
non-controlling
interest and written
put
option - - - - - - - (0.1) (0.1)
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
BALANCE AT 30 JUNE
2022 6.6 179.1 (0.1) 50.9 1.4 340.6 578.5 (6.4) 572.1
--------------------- ---- -------- -------- ------- -------- -------- --------- ------ ------------ -------
Group Balance Sheet
As at 30 June 2022
2022 2021
Note GBPm GBPm
--------------------------------------------- ---- ------- -------
ASSETS
--------------------------------------------- ---- ------- -------
Goodwill 111.0 101.5
--------------------------------------------- ---- ------- -------
Other intangible assets 9 72.0 56.3
--------------------------------------------- ---- ------- -------
Biological assets 10 333.7 279.9
--------------------------------------------- ---- ------- -------
Property, plant and equipment 11 171.4 123.0
--------------------------------------------- ---- ------- -------
Interests in joint ventures and associates 41.2 34.1
--------------------------------------------- ---- ------- -------
Other investments 10.2 14.7
--------------------------------------------- ---- ------- -------
Derivative financial assets 2.2 -
--------------------------------------------- ---- ------- -------
Other receivables 12 8.6 1.8
--------------------------------------------- ---- ------- -------
Deferred tax assets 10.1 8.0
--------------------------------------------- ---- ------- -------
TOTAL NON-CURRENT ASSETS 760.4 619.3
--------------------------------------------- ---- ------- -------
Inventories 50.9 37.0
--------------------------------------------- ---- ------- -------
Biological assets 10 33.1 39.6
--------------------------------------------- ---- ------- -------
Trade and other receivables 12 129.5 106.2
--------------------------------------------- ---- ------- -------
Cash and cash equivalents 38.8 46.0
--------------------------------------------- ---- ------- -------
Income tax receivable 4.0 2.6
--------------------------------------------- ---- ------- -------
Derivative financial assets 1.0 0.1
--------------------------------------------- ---- ------- -------
Asset held for sale 0.2 0.2
--------------------------------------------- ---- ------- -------
TOTAL CURRENT ASSETS 257.5 231.7
--------------------------------------------- ---- ------- -------
TOTAL ASSETS 1,017.9 851.0
--------------------------------------------- ---- ------- -------
LIABILITIES
--------------------------------------------- ---- ------- -------
Trade and other payables 13 (124.7) (110.3)
--------------------------------------------- ---- ------- -------
Interest-bearing loans and borrowings (7.1) (13.9)
--------------------------------------------- ---- ------- -------
Provisions (1.9) (1.3)
--------------------------------------------- ---- ------- -------
Deferred consideration (0.8) (1.6)
--------------------------------------------- ---- ------- -------
Obligations under leases (10.1) (9.0)
--------------------------------------------- ---- ------- -------
Tax liabilities (4.9) (6.4)
--------------------------------------------- ---- ------- -------
Derivative financial liabilities (1.8) -
--------------------------------------------- ---- ------- -------
TOTAL CURRENT LIABILITIES (151.3) (142.5)
--------------------------------------------- ---- ------- -------
Trade and other payables 13 (0.2) (1.4)
--------------------------------------------- ---- ------- -------
Interest-bearing loans and borrowings (182.1) (109.4)
--------------------------------------------- ---- ------- -------
Retirement benefit obligations 14 (8.3) (11.1)
--------------------------------------------- ---- ------- -------
Provisions (12.0) (11.1)
--------------------------------------------- ---- ------- -------
Deferred consideration (0.7) (0.5)
--------------------------------------------- ---- ------- -------
Deferred tax liabilities (60.3) (53.0)
--------------------------------------------- ---- ------- -------
Derivative financial liabilities (6.4) (6.1)
--------------------------------------------- ---- ------- -------
Obligations under leases (24.5) (19.3)
--------------------------------------------- ---- ------- -------
TOTAL NON-CURRENT LIABILITIES (294.5) (211.9)
--------------------------------------------- ---- ------- -------
TOTAL LIABILITIES (445.8) (354.4)
--------------------------------------------- ---- ------- -------
NET ASSETS 572.1 496.6
--------------------------------------------- ---- ------- -------
EQUITY
--------------------------------------------- ---- ------- -------
Called up share capital 6.6 6.6
--------------------------------------------- ---- ------- -------
Share premium account 179.1 179.1
--------------------------------------------- ---- ------- -------
Own shares (0.1) (0.1)
--------------------------------------------- ---- ------- -------
Translation reserve 50.9 (7.9)
--------------------------------------------- ---- ------- -------
Hedging reserve 1.4 -
--------------------------------------------- ---- ------- -------
Retained earnings 340.6 320.4
--------------------------------------------- ---- ------- -------
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 578.5 498.1
--------------------------------------------- ---- ------- -------
Non-controlling interest 17 (0.7) 3.6
--------------------------------------------- ---- ------- -------
Put option over non-controlling interest 17 (5.7) (5.1)
--------------------------------------------- ---- ------- -------
TOTAL NON-CONTROLLING INTEREST (6.4) (1.5)
--------------------------------------------- ---- ------- -------
TOTAL EQUITY 572.1 496.6
--------------------------------------------- ---- ------- -------
Group Statement of Cash Flows
For the year ended 30 June 2022
2022 2021
Note GBPm GBPm
------------------------------------------------------ ---- ------ -------
NET CASH FLOW FROM OPERATING ACTIVITIES 15 34.3 67.5
------------------------------------------------------ ---- ------ -------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------------------------ ---- ------ -------
Dividends received from joint ventures and associates 3.2 4.1
------------------------------------------------------ ---- ------ -------
Joint venture and associate loan payment - (0.4)
------------------------------------------------------ ---- ------ -------
Acquisition of joint venture and associate (2.2) (2.4)
------------------------------------------------------ ---- ------ -------
Acquisition of trade and assets (0.8) (6.9)
------------------------------------------------------ ---- ------ -------
Acquisition of Olymel AlphaGene assets (14.5) -
------------------------------------------------------ ---- ------ -------
Acquisition of investments (1.0) (0.9)
------------------------------------------------------ ---- ------ -------
Payment of deferred consideration (1.0) (6.7)
------------------------------------------------------ ---- ------ -------
Purchase of property, plant and equipment (42.1) (28.7)
------------------------------------------------------ ---- ------ -------
Purchase of intangible assets (8.8) (5.1)
------------------------------------------------------ ---- ------ -------
Proceeds from sale of property, plant and equipment - 0.3
------------------------------------------------------ ---- ------ -------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (67.2) (46.7)
------------------------------------------------------ ---- ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------------------------ ---- ------ -------
Drawdown of borrowings 138.7 195.1
------------------------------------------------------ ---- ------ -------
Repayment of borrowings (83.9) (176.1)
------------------------------------------------------ ---- ------ -------
Payment of lease liabilities (11.3) (11.7)
------------------------------------------------------ ---- ------ -------
Equity dividends paid (20.9) (19.5)
------------------------------------------------------ ---- ------ -------
Dividend to non-controlling interest (0.1) (0.2)
------------------------------------------------------ ---- ------ -------
Debt issue costs (0.6) (1.9)
------------------------------------------------------ ---- ------ -------
Issue of ordinary shares - 0.1
------------------------------------------------------ ---- ------ -------
NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES 21.9 (14.2)
------------------------------------------------------ ---- ------ -------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (11.0) 6.6
------------------------------------------------------ ---- ------ -------
Cash and cash equivalents at start of the year 46.0 41.3
------------------------------------------------------ ---- ------ -------
Net (decrease)/increase in cash and cash equivalents (11.0) 6.6
------------------------------------------------------ ---- ------ -------
Effect of exchange rate fluctuations on cash and
cash equivalents 3.8 (1.9)
------------------------------------------------------ ---- ------ -------
TOTAL CASH AND CASH EQUIVALENTS AT 30 JUNE 38.8 46.0
------------------------------------------------------ ---- ------ -------
NOTES TO THE PRELIMINARY RESULTS
For the year ended 30 June 2022
1. REPORTING ENTITY
Genus plc (the 'Company') is a public company limited by shares
and incorporated in England, United Kingdom under the Companies Act
2006. Its company number is 02972325 and its registered office is
Matrix House, Basing View, Basingstoke, Hampshire RG21 4DZ.
The condensed financial information given does not constitute
the Group's financial statements for the year ended 30 June 2022 or
the year ended 30 June 2021, but is derived from those financial
statements. The financial statements for the year ended 30 June
2021 have been delivered to the Registrar of Companies and those
for the year ended 30 June 2022 will be delivered following the
Company's annual general meeting. The auditors have reported on
those financial statements; their reports were unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their reports, and did not contain statements under s. 498(2) or
(3) Companies Act 2006.
2. BASIS OF PREPARATION
We have prepared the condensed financial information for the
year ended 30 June 2022 together with the comparative year has been
computed in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards ('IFRSs'). The Group
Financial Statements have also been prepared in accordance with
IFRSs as issued by the IASB.
Functional and presentational currency
We present the Group Financial Statements in Sterling, which is
the Company's functional and presentational currency. All financial
information presented in Sterling has been rounded to the nearest
GBP0.1m.
The principal exchange rates were as follows:
Average Closing
------------------- -------------------- --------------------
2022 2021 2020 2022 2021 2020
------------------- ----- ------ ----- ----- ------ -----
US Dollar/GBP 1.32 1.36 1.26 1.22 1.38 1.24
------------------- ----- ------ ----- ----- ------ -----
Euro/GBP 1.18 1.13 1.14 1.16 1.17 1.10
------------------- ----- ------ ----- ----- ------ -----
Brazilian Real/GBP 6.94 7.33 5.74 6.39 6.87 6.77
------------------- ----- ------ ----- ----- ------ -----
Mexican Peso/GBP 26.97 28.15 26.08 24.45 27.57 28.52
------------------- ----- ------ ----- ----- ------ -----
Chinese Yuan/GBP 8.55 8.94 8.89 8.15 8.93 8.75
------------------- ----- ------ ----- ----- ------ -----
Russian Rouble/GBP 98.75 102.04 85.17 66.73 101.10 88.19
------------------- ----- ------ ----- ----- ------ -----
While the condensed financial information included in this
preliminary announcement has been computed in accordance with
IFRSs, this announcement does not itself contain sufficient
information to comply with IFRSs. The Company expects to publish
full financial statements that comply with IFRSs in October 2022.
These financial statements have also been prepared in accordance
with the accounting policies set out in the 2021 Annual Report and
Financial Statements, as amended by the following new accounting
standards.
New standards and interpretations
In the current year, the Group has applied a number of
amendments to IFRS issued by the International Accounting Standards
Board that are mandatorily effective for an accounting period that
begins after 1 January 2021 and have been implemented with effect
from 1 July 2021. These are:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 -'
Interest Rate Benchmark Reform - Phase 2'; and
Amendment to IFRS 16 - ' COVID-19-Related Rent Concessions
beyond 30 June 2021'.
Their addition has not had any material impact on the
disclosures, or amounts reported in the Group Financial
Statements.
New standards and interpretations not yet adopted
At the date of the Annual 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 UK). The Group will continue to assess the impact of
these amendments prior to their adoption. These are:
Amendments to IAS 1 - ' Classification of Liabilities as Current
or Non-Current';
Amendments to IAS 16 - ' Property, Plant and Equipment -
Proceeds before Intended Use';
Annual Improvements 2018-2020 Cycle;
Amendments to IAS 37 - ' Onerous Contracts - Cost of Fulfilling
a Contract';
Amendments to IAS 1 and IFRS Practice Statement 2 - 'Disclosure
of Accounting Policies';
Amendments to IAS 12 - ' Deferred Tax related to Assets and
Liabilities arising from a Single Transaction'; and
Amendments to IAS 8- ' Definition of Accounting Estimates'.
Impact of Russian sanctions
The Group has two group operating companies that are
incorporated in Russia - Limited Liability Co. Genus ABS Russia and
PIC Genetics LLC ("Russian based subsidiaries/entities").Following
the sanctions that have been put in place by the UK and other
governments the Group implemented a comprehensive screening process
with external counsel to ensure that its Russian entities do not
trade with sanctioned individuals or entities controlled by them.
The main impact of the sanctions regime has been to categorize the
banks in Russia into sanctioned and non-sanctioned banks . Where we
receive money from sanctioned banks we are unable to use the cash
without a licence from Her Majesty's Treasury ('HMT'). For cash
receipts from non-sanctioned banks into the entities'
non-sanctioned banks we are able to use the cash in Russia for day
to day operations.
The Group applied for a License to HMT on 25 April 2022 to allow
the use of payments from sanctioned banks by non-sanctioned Russian
customers for the delivery of porcine and bovine genetics; use
money in a non-sanctioned Russian bank account in the name of Genus
Russia to pay Russian suppliers who continue to use sanctioned
Russian bank accounts; and to remit any excess money in Genus
Russia's non-sanctioned Russian bank account (regardless of whether
it was received from a sanctioned or non-sanctioned Russian bank
account) to other Genus group company UK bank accounts. As at 7
September 2022 we are awaiting a response from HMT.
Under the requirements of IAS 7, where there is cash that is not
currently available to be used by the rest of the group this needs
to be disclosed. As at 30 June 2022 we had a cash balance of
GBP4.5m in the Russian entities of which GBP3.9m is not currently
available to be used by the group due to being received from or
held in sanctioned banks. If the Group were to obtain the License
from HMT referred to above the GBP3.9m would be available to be
used by the Group.
Management have performed an assessment of the operations and
cash flow over a period of 18 months from 30 June 2022 to 31
December 2023 based upon the 2023 operating plans to determine
whether the Russian entities have sufficient non-sanctioned cash
flow to enable them to continue day to day operations and to meet
liabilities as they fall due. The analysis indicates they do have
sufficient non-sanctioned cash flow to enable them to meet day to
day operational needs.
Critical accounting judgement - exercise of control
Management has assessed whether the actions of the UK and
Russian Governments have caused the Group to lose control of these
Russian based subsidiaries. We have concluded that we do have
control for the year ended 30 June 2022, as defined under IFRS 10
Consolidated financial statements' over the Russian based
subsidiaries and are still able to consolidate despite short term
restrictions on extracting cash. We have assessed each of the asset
balances for impairment. The material areas that could give rise to
impairment are:
- PIC Russia Farm (GBP3.7m) - The value of the farm is
predicated on the future economic benefit of the animals that are
being reared there. We would need to assess if the open market
price (less cost to sell) the property would support the carrying
value.
- Trade Receivables (GBP6.0m) - the ongoing financial sanctions
may affect the ability of our customers to pay us for their goods.
If it is determined that our customers are unlikely to repay these
amounts then they should be provided for.
- IAS 41 valuation (GBP2.9m) - the ongoing impacts of both the
local economic outlook and our customers' ability to pay us could
result in a reversal of the Fair Value of the Russian biological
assets in the June valuation.
The impairment analysis performed by management indicates that
under the current business environment and based on the plans for
the Financial Year 2023 no impairment is required as at 30 June
2022.
Management will continue to monitor the situation closely to see
if any further changes require additional analysis that may result
in a different conclusion.
In the event of changes in legislation, such as more restrictive
sanctions imposed by the UK government or actions taken by the
Russian government, we may determine that we do not exercise
control, as defined under IFRS 10 Consolidated financial
statements, over the assets and operations of the Russian entities
and we would not be able to consolidate these companies into the
financial statements of the Group. The deconsolidation would mean
that we would reclassify the Russian entities as investments and we
would need to assess for impairment. A charge of up to GBP16.6m may
need to be recognised in the Income Statement representing the
total net assets of the two Russian entities. Dependent on the
nature of the events leading to the decision to deconsolidate the
entities there may be additional expenses incurred which we are
unable to estimate at this time. In addition, revenues would not be
consolidated into the financial statements of the Genus group from
the date of any deconsolidation. Revenues from the Russian entities
were GBP14.6m in the financial year 2022.
Going Concern
As part of the directors' consideration of the appropriateness
of adopting the going concern basis in preparing the financial
statements, as well as their assessment of the Group's viability,
the Board considered several key factors, including our business
model and our strategic framework. In addition, all principal risks
identified by the Group were considered in a downside scenario
within the viability assessment with specific focus paid to those
that could reasonably have a material impact within our outlook
period, including
> Growing in emerging markets, which we have modelled through
reductions to short term growth expectations, particularly in
China;
> Managing agricultural market and commodity prices
volatility; modelled through reductions in price expectations,
particularly in China;
> Developing products with competitive advantage, modelled
through reductions to short term growth expectations because of
failing to produce best genetics for our customers or to secure
elite genetics;
> Ensuring biosecurity or continuity of supply, which is
modelled through one off impacts of disease outbreaks and border
closures; and
> Impact of the war in Ukraine, modelled through reduction in
profit expectations and cash restrictions.
We have considered the position if each of the identified
principal risks materialised individually and where multiple risks
occur in parallel. In addition, we have overlaid this downside
scenario, net of mitigating actions, with reverse stress tests on
both our headroom and banking covenants to ensure the range beyond
the downside scenario is fully assessed.
Based on this assessment our headroom under these sensitivities
and reverse stress tests, including our mitigating actions, remain
adequate.
In their assessment of the Group's viability, the Directors have
determined that a three-year time horizon, to June 2025, is an
appropriate period to adopt. This was based on the Group's
visibility of its product development pipeline, for example,
because of the genetic lag of approximately three years between the
porcine nucleus herds and customers' production systems and the
pipeline of young bulls. The Board also considered the nature of
the principal risks affecting Genus, including the agricultural
markets in which it operates.
Based on this assessment, the Directors have a reasonable
expectation that the Group has adequate resources to continue its
operational existence for the foreseeable future and for a period
of at least 12 months from the date of this report. Accordingly,
the Directors continue to adopt and consider appropriate the going
concern basis in preparing this report.
Also, based on this assessment, the Directors have a reasonable
expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period to 30
June 2025. There are no indications from this assessment that
change this expectation when looking beyond 30 June 2025 at the
Group's longer-term prospects.
Alternative Performance Measures ('APMs')
In reporting nancial information, the Group presents APMs, which
are not de ned or speci ed under the requirements of IFRS and which
are not considered to be a substitute for, or superior to, IFRS
measures.
The Group believes that these APMs provide stakeholders with
additional helpful information on the performance of the business.
The APMs are consistent with how we plan our business performance
and report on it in our internal management reporting to the Board
and GELT. Some of these measures are also used for the purpose of
setting remuneration targets.
For a full list of all APMs please see the Alternative
Performance Measures Glossary section.
Climate change
In preparing these condensed financial statements we have
considered the impact of both physical and transition climate
change risks on the current valuation of our assets and
liabilities. We do not believe that there is a material impact on
the financial reporting judgements and estimates arising from our
considerations and as a result the valuations of our assets or
liabilities have not been significantly impacted by these risks as
at 30 June 2022. In concluding, we specifically considered the
impact of climate change on the growth rates and projected cash
flows as part of our goodwill impairment testing. As government
policies evolve as a result of commitments to limit global warming
to 1.5degC, we will continue to monitor implications on the
valuations of our assets and liabilities that could arise in future
years.
A pproval
This preliminary announcement was approved by the board on 7
September 2022.
3. SEGMENTAL INFORMATION
IFRS 8 'Operating Segments' requires operating segments to be
identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Executive and the
Board, to allocate resources to the segments and to assess their
performance. The Group's operating and reporting structure
comprises three operating segments: Genus PIC, Genus ABS and Genus
Research and Development. These segments are the basis on which the
Group reports its segmental information. The principal activities
of each segment are as follows:
Genus PIC - our global porcine sales business;
Genus ABS - our global bovine sales business; and
Genus Research and Development - our global spend on research
and development.
A segmental analysis of revenue, operating profit, depreciation,
amortisation, non-current asset additions, segment assets and
liabilities and geographical information is provided below. We do
not include our adjusting items in the segments, as we believe
these do not reflect the underlying performance of the segments.
The accounting policies of the reportable segments are the same as
the Group's accounting policies, as described in the Financial
Statements.
2022 2021
Revenue GBPm GBPm
------------------------------- ----- -----
Genus PIC 306.6 315.6
------------------------------- ----- -----
Genus ABS 272.0 250.1
------------------------------- ----- -----
Genus Research and Development
------------------------------- ----- -----
Porcine product development 12.4 7.3
------------------------------- ----- -----
Bovine product development 1.7 1.3
------------------------------- ----- -----
Gene editing 0.7 -
------------------------------- ----- -----
Other research and development - -
------------------------------- ----- -----
14.8 8.6
------------------------------- ----- -----
593.4 574.3
------------------------------- ----- -----
Adjusted operating profit by segment is set out below and
reconciled to the Group's adjusted operating profit. A
reconciliation of adjusted operating profit to profit for the year
is shown on the face of the Group Income Statement.
2022 2021
Adjusted operating profit GBPm GBPm
---------------------------------- ------ ------
Genus PIC 112.3 122.9
---------------------------------- ------ ------
Genus ABS 40.5 36.4
---------------------------------- ------ ------
Genus Research and Development
---------------------------------- ------ ------
Porcine product development (22.4) (21.9)
---------------------------------- ------ ------
Bovine product development (22.8) (19.6)
---------------------------------- ------ ------
Gene editing (7.9) (7.6)
---------------------------------- ------ ------
Other research and development (14.0) (13.3)
---------------------------------- ------ ------
(67.1) (62.4)
---------------------------------- ------ ------
Adjusted segment operating profit 85.7 96.9
---------------------------------- ------ ------
Central (16.9) (20.0)
---------------------------------- ------ ------
Adjusted operating profit 68.8 76.9
---------------------------------- ------ ------
Our business is not highly seasonal and our customer base is
diversified, with no individual customer generating more than 2% of
revenue.
Exceptional items of GBP2.0m expense (2021: GBP3.3m expense)
relate to Genus ABS (GBP4.2m expense) (2021: 2.5m expense), Genus
PIC (GBP0.6m expense) (2021: GBP0.3m expense) and our central
segment (GBP2.8m credit) (2021: GBP0.5m expense). Note 4 provides
details of these exceptional items.
We consider share-based payment expenses on a Group-wide basis
and do not allocate them to reportable segments.
Other segment information
Additions to
non-current
assets (excluding
deferred taxation
and financial
Depreciation Amortisation instruments)
------------------------------- -------------- -------------- --------------------
2022 2021 2022 2021 2022 2021
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ------ ------ ------ ------ --------- ---------
Genus PIC 4.5 3.0 7.4 6.5 45.2 10.0
------------------------------- ------ ------ ------ ------ --------- ---------
Genus ABS 14.3 13.3 3.4 2.8 25.4 26.8
------------------------------- ------ ------ ------ ------ --------- ---------
Genus Research and Development
------------------------------- ------ ------ ------ ------ --------- ---------
Research 1.0 0.7 - - 3.3 1.7
------------------------------- ------ ------ ------ ------ --------- ---------
Porcine product development 2.2 1.9 - - 1.3 7.1
------------------------------- ------ ------ ------ ------ --------- ---------
Bovine product development 2.0 1.8 0.2 0.2 2.7 2.7
------------------------------- ------ ------ ------ ------ --------- ---------
5.2 4.4 0.2 0.2 7.3 11.5
------------------------------- ------ ------ ------ ------ --------- ---------
Segment total 24.0 20.7 11.0 9.5 77.9 48.3
------------------------------- ------ ------ ------ ------ --------- ---------
Central 2.4 3.3 1.6 1.6 5.8 3.9
------------------------------- ------ ------ ------ ------ --------- ---------
Total 26.4 24.0 12.6 11.1 83.7 52.2
------------------------------- ------ ------ ------ ------ --------- ---------
Segment assets Segment liabilities
------------------------------- ---------------- ---------------------
2022 2021 2022 2021
GBPm GBPm GBPm GBPm
------------------------------- --------- ----- ---------- ---------
Genus PIC 305.4 261.5 (73.4) (57.4)
------------------------------- --------- ----- ---------- ---------
Genus ABS 261.4 203.1 (78.9) (56.0)
------------------------------- --------- ----- ---------- ---------
Genus Research and Development
------------------------------- --------- ----- ---------- ---------
Research 14.7 17.8 (4.4) (6.1)
------------------------------- --------- ----- ---------- ---------
Porcine product development 275.0 213.6 (57.7) (55.0)
------------------------------- --------- ----- ---------- ---------
Bovine product development 119.6 125.0 (16.7) (25.5)
------------------------------- --------- ----- ---------- ---------
409.3 356.4 (78.8) (86.6)
------------------------------- --------- ----- ---------- ---------
Segment total 976.1 821.0 (231.1) (200.0)
------------------------------- --------- ----- ---------- ---------
Central 41.8 30.0 (214.7) (154.4)
------------------------------- --------- ----- ---------- ---------
Total 1,017.9 851.0 (445.8) (354.4)
------------------------------- --------- ----- ---------- ---------
Geographical information
The Group's revenue by geographical segment is analysed below.
This analysis is stated on the basis of where the customer is
located.
Revenue
2022 2021
GBPm GBPm
----------------------------------------------- ----- -----
North America 238.5 214.7
----------------------------------------------- ----- -----
Latin America 94.6 83.8
----------------------------------------------- ----- -----
UK 88.7 92.2
----------------------------------------------- ----- -----
Rest of Europe, Middle East, Russia and Africa 88.3 82.1
----------------------------------------------- ----- -----
Asia 83.3 101.5
----------------------------------------------- ----- -----
593.4 574.3
----------------------------------------------- ----- -----
Non-current assets (excluding deferred taxation and financial
instruments)
The Group's non-current assets by geographical segment are
analysed below and are stated on the basis of where the assets are
located.
2022 2021
GBPm GBPm
----------------------------------------------- ----- -----
North America 529.6 419.5
----------------------------------------------- ----- -----
Latin America 56.7 46.1
----------------------------------------------- ----- -----
UK 69.8 73.3
----------------------------------------------- ----- -----
Rest of Europe, Middle East, Russia and Africa 45.7 44.6
----------------------------------------------- ----- -----
Asia 46.3 27.8
----------------------------------------------- ----- -----
748.1 611.3
----------------------------------------------- ----- -----
Revenue by type
2022 2021
GBPm GBPm
------------------------------------------------------- ----- -----
Genus PIC 158.4 172.6
------------------------------------------------------- ----- -----
Genus ABS 262.5 242.2
------------------------------------------------------- ----- -----
Genus Research and Development 14.8 8.6
------------------------------------------------------- ----- -----
Sale of animals, semen, embryos and ancillary products
and services 435.7 423.4
------------------------------------------------------- ----- -----
Genus PIC 148.2 143.0
------------------------------------------------------- ----- -----
Genus ABS 1.1 0.6
------------------------------------------------------- ----- -----
Genus Research and Development - -
------------------------------------------------------- ----- -----
Royalties 149.3 143.6
------------------------------------------------------- ----- -----
Genus PIC - -
------------------------------------------------------- ----- -----
Genus ABS 8.4 7.3
------------------------------------------------------- ----- -----
Genus Research and Development - -
------------------------------------------------------- ----- -----
Consulting services 8.4 7.3
------------------------------------------------------- ----- -----
Total revenue 593.4 574.3
------------------------------------------------------- ----- -----
Revenue from contracts with customers
The Group's revenue is analysed below by the timing at which it
is recognised.
2022 2021
GBPm GBPm
------------------------------- ----- -----
Genus PIC 303.2 312.8
------------------------------- ----- -----
Genus ABS 247.2 229.1
------------------------------- ----- -----
Genus Research and Development 14.1 8.6
------------------------------- ----- -----
Recognised at a point in time 564.5 550.5
------------------------------- ----- -----
Genus PIC 3.4 2.8
------------------------------- ----- -----
Genus ABS 24.8 21.0
------------------------------- ----- -----
Genus Research and Development 0.7 -
------------------------------- ----- -----
Recognised over time 28.9 23.8
------------------------------- ----- -----
Total revenue 593.4 574.3
------------------------------- ----- -----
4. EXCEPTIONAL ITEMS
2022 2021
Operating (expense)/credit GBPm GBPm
----------------------------- ----- -----
Litigation and damages (1.4) (2.5)
----------------------------- ----- -----
Acquisition and integration (0.3) (0.3)
----------------------------- ----- -----
Pension related (0.4) (2.3)
----------------------------- ----- -----
Legacy legal claim 3.3 -
----------------------------- ----- -----
ABS production restructuring (2.8) -
----------------------------- ----- -----
Other (0.4) 1.8
----------------------------- ----- -----
(2.0) (3.3)
----------------------------- ----- -----
Litigation and damages
Litigation includes legal fees and related costs of GBP1.4m
(2021: GBP2.5m) related to the actions between ABS Global, Inc. and
certain affiliates ('ABS') and Inguran, LLC and certain affiliates
(aka STGenetics ('ST')).
Material litigation activities during the year ended 30 June
2022
In July 2014, ABS launched a legal action against ST in the US
District Court for the Western District of Wisconsin and initiated
anti-trust proceedings which ultimately enabled the launch of ABS's
IntelliGen sexing technology in the US market ('ABS I'). In June
2017, ST filed proceedings against ABS in the same District Court,
where ST alleged that ABS infringed seven patents and asserted
trade secret and breach of contract claims ('ABS II'). The ABS I
and ABS II proceedings in the periods before the year ended 30 June
2021 are more fully described in the Notes to the Financial
Statements in previous Annual Reports. ABS sought judgments as a
matter of law ('JMOL') in relation to the invalidity of all three
of the patents considered in ABS II, JMOLs in relation to the
non-infringement of two of those patents, and a reduction in
damages awarded by the jury.
On 29 January 2020, ST filed a new US complaint against ABS
('ABS III'). ABS has prepared and filed a response to the ABS III
complaint, including a motion to dismiss, on the basis that all
these issues were fully resolved in either the ABS I or ABS II
litigations.
On 10 March 2020, the USPTO issued patent 10,583,439 (the "439
patent'), and subsequently ST asked the court for permission to
file a supplemental complaint in ABS III asserting infringement of
the '439 patent. On 15 April 2020, ST filed a new complaint ('ABS
IV'), asserting the same claim of infringement of the '439 patent
alleged in its supplemental complaint and then moved to consolidate
the ABS IV and ABS III litigation. ABS opposed this action and has
filed a motion for summary dismissal. On 23 June 2020, the USPTO
issued patent 10,689,210 (the "210 patent'), and on 6 July 2020, ST
sought a second supplement of ABS III by adding a claim of '210
patent infringement. ABS opposed this action.
On 26 October 2020 and 10 December 2020, ABS filed Inter Partes
Reviews ('IPR') against the '439 and '210 patents with the USPTO.
On 4 May 2021, the Patent Trial and Appeal Board ('PTAB')
instituted the '439 patent IPR, and the hearing was completed on 2
February 2022. On 7 June 2021, PTAB declined to institute the '210
patent IPR and on 28 April 2022, PTAB issued its decision and
declined to invalidate the claims of the '439 patent.
On 20 December 2021, the Wisconsin Federal Court reached a
decision on the ABS III and IV motions, granting ABS's motion to
dismiss all claims relating to US patent 8,206,987 (the "987
patent'), and denying ST's motion to amend ABS III to add the '439
and '210 patents. The court dismissed ABS III in its entirety and
entered judgment favour of ABS. ST has appealed this decision.
On 1 July 2022 , the court reached a decision on the ABS II
post-judgment motions as well as the pending motions in ABS IV. The
Court deferred to the jury's verdict in ABS II confirming the
validity and infringement of US patents 7,311,476, 7,611,309 (the
"476 and 309 patents' respectively) and the '987 patent, and
further confirmed the award of costs to ABS of $5.3m in connection
with ABS I. In relation to ABS IV, the Court denied ABS' motion to
dismiss the '439 and '210 patent claims on the basis that the
challenges were too fact-based to be resolved at this stage. A
Court scheduling conference confirmed a hearing date of 15 July
2024 for ABS IV hearing. Appeals have been filed by ABS on the
validity and infringement of the '987, the '476 and the '309
patents and ST has appealed the award of the $5.3m costs.
Indian Litigation: In September 2019, ST also filed parallel
patent infringement proceedings against ABS in India, alleging
infringement of the Indian patent 240790 ("790 patent'). The '790
patent is the equivalent of the US patent 7,311,476 asserted in ABS
II. ABS had already sought the revocation of the '790 patent in
April 2017 before the Indian Patent Office and has now consolidated
the revocation petition as a counterclaim in the Indian court
proceedings. Progress of these proceedings has been delayed on
multiple occasions and is next before the court for consideration
on 15 September 2022.
Acquisitions and integration
During the year, GBP0.3m (2021: GBP0.3m) of expenses were
incurred in relation to acquisitions during the year, with GBP0.2m
relating the Olymel
transaction.
Legacy legal claim
A one-off credit of GBP3.3m resulted from a non-refundable
receipt of cash for the assignment of rights to a legacy legal
claim against the Instituto Brasileiro de Café (IBC) in Brazil. The
claim was for reimbursement of unpaid amounts plus interest in
respect of coffee shipments made by a group subsidiary to the IBC
in the 1990s, when the subsidiary was part of the Dalgety Group.
Under the assignment agreement, the subsidiary has assigned any
future receipt from the legal claim to an Investment Fund in
Brazil, in exchange for an immediate cash amount and a sliding
scale earn out payment which decreases over the duration of the
period to the eventual receipt of proceeds by the assignee. No
amount has been recognised in respect of the earn out payment, as
the duration to the eventual settlement of the legal claim cannot
be estimated with any certainty.
ABS production restructuring
A one-off charge of GBP2.8m was incurred primarily relating to
the closure of our Canadian ABS facilities and disposals of bulls
held in North America as part of a production restructuring.
Pension related
A pensions benefits audit on the National Pig Development
pension fund concluded during the year lead to an aggregate past
service charge of GBP0.4m, resulted from the recognition of these
additional liabilities. In the prior year, an aggregate past
service charge of GBP2.3m, resulted from recognition of additional
liabilities, relating to Guaranteed Minimum Pension ('GMP') on
historic transfer values.
Other
Included in Other is an expense of GBP0.5m relating to legal
advice, IT consultancy fees and one-time costs incurred as the
direct result of an IT security incident in June 2022. In the prior
year, a GBP2.0m credit resulting from a share forfeiture
exercise.
5. NET FINANCE COSTS
2022 2021
GBPm GBPm
----------------------------------------------------------- ----- -----
Interest payable on bank loans and overdrafts (4.1) (2.8)
----------------------------------------------------------- ----- -----
Amortisation of debt issue costs (0.9) (0.9)
----------------------------------------------------------- ----- -----
Other interest payable (0.1) -
----------------------------------------------------------- ----- -----
Unwinding of discount put options (0.2) (0.6)
----------------------------------------------------------- ----- -----
Net interest cost in respect of pension scheme liabilities (0.2) (0.3)
----------------------------------------------------------- ----- -----
Interest on lease liabilities (1.1) (0.8)
----------------------------------------------------------- ----- -----
Total interest expense (6.6) (5.4)
----------------------------------------------------------- ----- -----
Interest income on bank deposits 0.4 0.4
----------------------------------------------------------- ----- -----
Total interest income 0.4 0.4
----------------------------------------------------------- ----- -----
Net finance costs (6.2) (5.0)
----------------------------------------------------------- ----- -----
6. TAXATION AND DEFERRED TAXATION
Income tax expense
2022 2021
GBPm GBPm
-------------------------------------------------------- ----- ------
Current tax expense
-------------------------------------------------------- ----- ------
Current period 13.6 18.3
-------------------------------------------------------- ----- ------
Adjustment for prior periods 1.8 1.3
-------------------------------------------------------- ----- ------
Total current tax expense in the Group Income Statement 15.4 19.6
-------------------------------------------------------- ----- ------
Deferred tax expense
-------------------------------------------------------- ----- ------
Origination and reversal of temporary differences (0.5) (10.3)
-------------------------------------------------------- ----- ------
Adjustment for prior periods (3.2) (0.3)
-------------------------------------------------------- ----- ------
Total deferred tax credit in the Group Income Statement (3.7) (10.6)
-------------------------------------------------------- ----- ------
Total income tax expense excluding share of income tax
of equity accounted investees 11.7 9.0
-------------------------------------------------------- ----- ------
Share of income tax of equity accounted investees 2.6 3.0
-------------------------------------------------------- ----- ------
Total income tax expense in the Group Income Statement 14.3 12.0
-------------------------------------------------------- ----- ------
Reconciliation of effective tax rate
2022 2022 2021 2021
% GBPm % GBPm
------------------------------------------------- ----- ------ ----- -----
Profit before tax 48.4 55.8
------------------------------------------------- ----- ------ ----- -----
Add back share of income tax of equity accounted
investees 2.6 3.0
------------------------------------------------- ----- ------ ----- -----
Profit before tax excluding share of income
tax of equity accounted investees 51.0 58.8
------------------------------------------------- ----- ------ ----- -----
Income tax at UK corporation tax of 19% (2021:
19.0%) 19.0 9.7 19.0 11.2
------------------------------------------------- ----- ------ ----- -----
Effect of tax rates in foreign jurisdictions 9.2 4.7 10.5 6.2
------------------------------------------------- ----- ------ ----- -----
Non-deductible expenses 4.3 2.2 2.0 1.2
------------------------------------------------- ----- ------ ----- -----
Tax exempt income and incentives (1.8) (0.9) (8.7) (5.2)
------------------------------------------------- ----- ------ ----- -----
Change in tax rate 2.5 1.3 (4.4) (2.6)
------------------------------------------------- ----- ------ ----- -----
Movements in recognition of tax losses 0.2 0.1 (1.2) (0.7)
------------------------------------------------- ----- ------ ----- -----
Change in unrecognised temporary differences (3.7) (1.9) 2.2 1.3
------------------------------------------------- ----- ------ ----- -----
Tax (over)/under provided in prior periods (2.1) (1.1) 0.5 0.3
------------------------------------------------- ----- ------ ----- -----
Change in provisions (0.2) (0.1) 1.2 0.7
------------------------------------------------- ----- ------ ----- -----
Tax on undistributed reserves 0.6 0.3 (0.7) (0.4)
------------------------------------------------- ----- ------ ----- -----
Total income tax expense in the Group Income
Statement 28.0 14.3 20.4 12.0
------------------------------------------------- ----- ------ ----- -----
7. EARNINGS PER SHARE
Basic earnings per share is the profit generated for the
financial year attributable to equity shareholders, divided by the
weighted average number of shares in issue during the year.
Basic earnings per share from continuing operations
2022 2021
(pence) (pence)
------------------------- --------- --------
Basic earnings per share 62.5 72.6
------------------------- --------- --------
The calculation of basic earnings per share from continuing
operations is based on the net profit attributable to owners of the
Company from continuing operations of GBP40.9m (2021: GBP47.3m) and
a weighted average number of ordinary shares outstanding of
65,395,000 (2021: 65,108,000), which is calculated as follows:
Weighted average number of ordinary shares (basic)
2022 2021
000s 000s
---------------------------------------------------- ------ ------
Issued ordinary shares at the start of the year 65,761 65,092
---------------------------------------------------- ------ ------
Effect of own shares held (373) (180)
---------------------------------------------------- ------ ------
Shares issued on exercise of stock options 7 9
---------------------------------------------------- ------ ------
Shares issued in relation to Employee Benefit Trust - 187
---------------------------------------------------- ------ ------
Weighted average number of ordinary shares in year 65,395 65,108
---------------------------------------------------- ------ ------
Diluted earnings per share from continuing operations
2022 2021
(pence) (pence)
--------------------------- --------- ---------
Diluted earnings per share 62.2 72.0
--------------------------- --------- ---------
The calculation of diluted earnings per share from continuing
operations is based on the net profit attributable to owners of the
Company from continuing operations of GBP40.9m (2021: GBP47.3m) and
a weighted average number of ordinary shares outstanding, after
adjusting for the effects of all potential dilutive ordinary
shares, of 65,714,000 (2021: 65,662,000), which is calculated as
follows:
Weighted average number of ordinary shares (diluted)
2022 2021
000s 000s
------------------------------------------------------------ ------ ------
Weighted average number of ordinary shares (basic) 65,395 65,108
------------------------------------------------------------ ------ ------
Dilutive effect of share awards and options 319 554
------------------------------------------------------------ ------ ------
Weighted average number of ordinary shares for the purposes
of diluted earnings per share 65,714 65,662
------------------------------------------------------------ ------ ------
Adjusted earnings per share from continuing operations
2022 2021
(pence) (pence)
------------------------------------ --------- --------
Adjusted earnings per share 82.7 100.9
------------------------------------ --------- --------
Diluted adjusted earnings per share 82.3 100.1
------------------------------------ --------- --------
Adjusted earnings per share is calculated on profit before the
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 GBP54.1m (2021: GBP65.7m), which is calculated as
follows:
2022 2021
GBPm GBPm
------------------------------------------------------------ ------ ------
Profit before tax from continuing operations 48.4 55.8
------------------------------------------------------------ ------ ------
Add/(deduct):
------------------------------------------------------------ ------ ------
Net IAS 41 valuation movement on biological assets 5.4 10.8
------------------------------------------------------------ ------ ------
Amortisation of acquired intangible assets 8.3 7.4
------------------------------------------------------------ ------ ------
Share-based payment expense 3.7 7.7
------------------------------------------------------------ ------ ------
Exceptional items (see note 4) 2.0 3.3
------------------------------------------------------------ ------ ------
Net IAS 41 valuation movement on biological assets in joint
ventures 1.4 (3.1)
------------------------------------------------------------ ------ ------
Tax on joint ventures and associates 2.6 3.0
------------------------------------------------------------ ------ ------
Attributable to non-controlling interest (0.3) (0.1)
------------------------------------------------------------ ------ ------
Adjusted profit before tax 71.5 84.8
------------------------------------------------------------ ------ ------
Adjusted tax charge (17.4) (19.1)
------------------------------------------------------------ ------ ------
Adjusted profit after tax 54.1 65.7
------------------------------------------------------------ ------ ------
Effective tax rate on adjusted profit 24.3% 22.5%
------------------------------------------------------------ ------ ------
8. DIVIDS
Dividends are one type of shareholder return, historically paid
to our shareholders in late November/early December and late
March.
Amounts recognised as distributions to equity holders in the
year
2022 2021
GBPm GBPm
--------------------------------------------------------- ----- -----
Final dividend
--------------------------------------------------------- ----- -----
Final dividend for the year ended 30 June 2021 of 21.7
pence per share 14.2 -
--------------------------------------------------------- ----- -----
Final dividend for the year ended 30 June 2020 of 19.7
pence per share - 12.8
--------------------------------------------------------- ----- -----
Interim dividend
--------------------------------------------------------- ----- -----
Interim dividend for the year ended 30 June 2022 of 10.3
pence per share 6.7 -
--------------------------------------------------------- ----- -----
Interim dividend for the year ended 30 June 2021 of 10.3
pence per share - 6.7
--------------------------------------------------------- ----- -----
20.9 19.5
--------------------------------------------------------- ----- -----
The Directors have proposed a final dividend of 21.7 pence per
share for 2022. This is subject to shareholders' approval at the
AGM and we have therefore not included it as a liability in these
Financial Statements. The total proposed and paid dividend for year
ended 30 June 2022 is 32.0 pence per share (2021: 32.0 pence per
share).
9. INTANGIBLE ASSETS
Brands, Separately
Porcine multiplier identified
and bovine contracts acquired Assets Patents,
genetics and customer intangible under licences
technology relationships assets Software construction IntelliGen and other Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- ----------- ----------- -------- ------------- ---------- ---------- ------
Cost
Balance at 1 July
2020 52.0 85.9 137.9 18.4 2.0 25.4 4.4 188.1
Additions - - - 0.4 3.8 0.9 - 5.1
Acquisition - 3.7 3.7 - - - - 3.7
Disposals - - - (1.1) - - - (1.1)
Transfers - - - 3.1 (3.1) - - -
Effect of movements
in exchange rates (0.3) (8.0) (8.3) (0.8) - (2.7) (0.1) (11.9)
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Balance at 30 June
2021 51.7 81.6 133.3 20.0 2.7 23.6 4.3 183.9
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Additions 4.2 10.3 14.5 0.2 8.6 - - 23.3
Acquisition - 0.4 0.4 - - - - 0.4
Transfers - - - 7.7 (7.7) - - -
Effect of movements
in exchange rates 0.6 10.6 11.2 1.0 0.1 3.2 0.1 15.6
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Balance at 30 June
2022 56.5 102.9 159.4 28.9 3.7 26.8 4.4 223.2
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Amortisation and
impairment
losses
Balance at 1 July
2020 33.2 68.2 101.4 13.0 - 6.9 3.9 125.2
Disposals - - - (0.6) - - - (0.6)
Amortisation for
the
year 2.8 4.6 7.4 1.4 - 2.2 0.1 11.1
Effect of movements
in exchange rates - (6.6) (6.6) (0.8) - (0.7) - (8.1)
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Balance at 30 June
2021 36.0 66.2 102.2 13.0 - 8.4 4.0 127.6
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Amortisation for
the
year 3.0 5.3 8.3 1.7 - 2.5 0.1 12.6
Effect of movements
in exchange rates 0.1 8.6 8.7 0.8 - 1.4 0.1 11.0
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Balance at 30 June
2022 39.1 80.1 119.2 15.5 - 12.3 4.2 151.2
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Carrying amounts
At 30 June 2022 17.4 22.8 40.2 13.4 3.7 14.5 0.2 72.0
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
At 30 June 2021 15.7 15.4 31.1 7.0 2.7 15.2 0.3 56.3
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
At 30 June 2020 18.8 17.7 36.5 5.4 2.0 18.5 0.5 62.9
------------------- ----------- -------------- ----------- -------- ------------- ---------- ---------- ------
Included within brands, multiplier contracts and customer
relationships are carrying amounts for brands of GBP0.5m (2021:
GBP0.7m), multiplier contracts of GBP11.1m (2021: GBP0.3m) and
customer relationships of GBP11.2m (2021: GBP14.4m).
On 22 February 2022, PIC acquired all the intellectual property
in Olymel's AlphaGene elite porcine genetics for a total cash
consideration of CAD$ 25.0m (GBP14.5m), being GBP4.2m for porcine
genetic technology and GBP10.3m for multiplier contracts. The
parties have also entered into an exclusive long term genetics
collaboration agreement, where PIC will supply elite germplasm and
manage the ongoing genetic improvement of Olymel's AlphaGene
genetics.
Included within the software class of assets is GBP6.9m (2021:
GBP5.4m) and included in assets in the course of construction is
GBP2.7m (2021: GBP1.1m) that relate to the ongoing development
costs of GenusOne, our single global enterprise system.
10. BIOLOGICAL ASSETS
Bovine Porcine Total
Fair value of biological assets GBPm GBPm GBPm
------------------------------------------------ ------ ------- -------
Non-current biological assets 107.2 202.9 310.1
------------------------------------------------ ------ ------- -------
Current biological assets - 39.8 39.8
------------------------------------------------ ------ ------- -------
Balance at 30 June 2020 107.2 242.7 349.9
------------------------------------------------ ------ ------- -------
Increases due to purchases 15.2 134.8 150.0
------------------------------------------------ ------ ------- -------
Decreases attributable to sales - (223.0) (223.0)
------------------------------------------------ ------ ------- -------
Decrease due to harvest (24.4) (21.4) (45.8)
------------------------------------------------ ------ ------- -------
Business combination - 0.3 0.3
------------------------------------------------ ------ ------- -------
Changes in fair value less estimated sale costs 3.9 118.4 122.3
------------------------------------------------ ------ ------- -------
Effect of movements in exchange rates (9.9) (24.3) (34.2)
------------------------------------------------ ------ ------- -------
Balance at 30 June 2021 92.0 227.5 319.5
------------------------------------------------ ------ ------- -------
Non-current biological assets 92.0 187.9 279.9
------------------------------------------------ ------ ------- -------
Current biological assets - 39.6 39.6
------------------------------------------------ ------ ------- -------
Balance at 30 June 2021 92.0 227.5 319.5
------------------------------------------------ ------ ------- -------
Increases due to purchases 23.3 225.8 249.1
------------------------------------------------ ------ ------- -------
Decreases attributable to sales - (234.8) (234.8)
------------------------------------------------ ------ ------- -------
Decrease due to harvest (17.7) (26.3) (44.0)
------------------------------------------------ ------ ------- -------
Changes in fair value less estimated sale costs (19.6) 61.2 41.6
------------------------------------------------ ------ ------- -------
Effect of movements in exchange rates 10.0 25.4 35.4
------------------------------------------------ ------ ------- -------
Balance at 30 June 2022 88.0 278.8 366.8
------------------------------------------------ ------ ------- -------
Non-current biological assets 88.0 245.7 333.7
------------------------------------------------ ------ ------- -------
Current biological assets - 33.1 33.1
------------------------------------------------ ------ ------- -------
Balance at 30 June 2022 88.0 278.8 366.8
------------------------------------------------ ------ ------- -------
Bovine
Bovine biological assets include GBP6.9m (2021: GBP7.4m)
representing the fair value of bulls owned by third parties but
managed by the Group, net of expected future payments to such third
parties, which are therefore treated as assets held under
leases.
There were no movements in the carrying value of the bovine
biological assets in respect of sales or other changes during the
year.
A risk-adjusted rate of 12.5% (2021: 8.8%) has been used to
discount future net cash flows from the sale of bull semen.
Decreases due to harvest represent the semen extracted from the
biological assets. Inventories of such semen are shown as
biological asset harvest.
Porcine
Included in increases due to purchases is the aggregate increase
arising during the year on initial recognition of biological assets
in respect of multiplier purchases, other than parent gilts, of
GBP101.2m (2021: GBP47.5m).
Decreases attributable to sales during the year of GBP234.8m
(2021: GBP223.0m) include GBP74.0m (2021: GBP67.4m) in respect of
the reduction in fair value of the retained interest in the
genetics of animals, other than parent gilts, transferred under
royalty contracts.
Also included is GBP119.0m (2021: GBP97.9m) relating to the fair
value of the retained interest in the genetics in respect of
animals, other than parent gilts, sold to customers under royalty
contracts in the year.
Total revenue in the year, including parent gilts, includes
GBP231.4m (2021: GBP206.9m) in respect of these contracts,
comprising GBP83.2m (2021: GBP63.9m) on initial transfer of animals
and semen to customers and GBP148.2m (2021: GBP143.0m) in respect
of royalties received.
A risk-adjusted rate of 10.3% (2021: 9.3%) has been used to
discount future net cash flows from the expected output of the pure
line porcine herds. The number of future generations which have
been taken into account is seven (2021: seven) and their estimated
useful lifespan is 1.4 years (2021: 1.4 years).
Year ended 30 June 2022
Bovine Porcine Total
GBPm GBPm GBPm
------------------------------------------------------ ------ ------- ------
Changes in fair value of biological assets (19.6) 61.2 41.6
------------------------------------------------------ ------ ------- ------
Inventory transferred to cost of sales at fair value (10.3) (26.3) (36.6)
------------------------------------------------------ ------ ------- ------
Biological assets transferred to cost of sales at
fair value - (10.3) (10.3)
------------------------------------------------------ ------ ------- ------
(29.9) 24.6 (5.3)
------------------------------------------------------ ------ ------- ------
Fair value movement in related financial derivative - (0.1) (0.1)
------------------------------------------------------ ------ ------- ------
Net IAS 41 valuation movement on biological assets(1) (29.9) 24.5 (5.4)
------------------------------------------------------ ------ ------- ------
Year ended 30 June 2021
Bovine Porcine Total
GBPm GBPm GBPm
------------------------------------------------------ ------ ------- ------
Changes in fair value of biological assets 3.9 118.4 122.3
------------------------------------------------------ ------ ------- ------
Inventory transferred to cost of sales at fair value (21.1) (21.4) (42.5)
------------------------------------------------------ ------ ------- ------
Biological assets transferred to cost of sales at
fair value - (90.0) (90.0)
------------------------------------------------------ ------ ------- ------
(17.2) 7.0 (10.2)
------------------------------------------------------ ------ ------- ------
Fair value movement in related financial derivative - (0.6) (0.6)
------------------------------------------------------ ------ ------- ------
Net IAS 41 valuation movement on biological assets(1) (17.2) 6.4 (10.8)
------------------------------------------------------ ------ ------- ------
1 This represents the difference between operating profit
prepared under IAS 41 and operating profit prepared under
historical cost accounting, which forms part of the reconciliation
to adjusted operating profit (see APMs).
11. PROPERTY, PLANT AND EQUIPMENT
Plant,
motor Plant,
Land vehicles Assets Total motor Total
and and under owned Land vehicles right-of-use
buildings equipment construction assets and buildings and equipment assets Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------- ------------ ------------ ------- ------------- ------------- ------
Cost or
deemed cost
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Balance at 1
July 2020 67.9 87.8 8.2 163.9 21.9 24.0 45.9 209.8
Additions 1.1 5.9 22.3 29.3 2.3 8.1 10.4 39.7
Business
combination - 0.2 - 0.2 - - - 0.2
Transfers 4.3 3.5 (7.8) - - - - -
Disposals (0.3) (2.1) - (2.4) (1.9) (4.7) (6.6) (9.0)
Effect of
movements
in exchange
rates (6.4) (7.3) (0.6) (14.3) (1.6) (1.4) (3.0) (17.3)
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Balance at 30
June
2021 66.6 88.0 22.1 176.7 20.7 26.0 46.7 223.4
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Additions 0.2 3.9 40.3 44.4 9.2 6.1 15.3 59.7
Transfers 23.5 12.8 (36.3) - - - - -
Disposals (1.4) (2.0) - (3.4) (0.5) (6.0) (6.5) (9.9)
Effect of
movements
in exchange
rates 11.3 10.9 3.5 25.7 2.1 2.3 4.4 30.1
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Balance at 30
June
2022 100.2 113.6 29.6 243.4 31.5 28.4 59.9 303.3
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Depreciation
and
impairment
losses
Balance at 1
July 2020 24.3 53.1 - 77.4 4.4 10.1 14.5 91.9
Depreciation
for the
year 3.2 9.8 - 13.0 3.7 7.3 11.0 24.0
Disposals (0.3) (1.5) - (1.8) (1.3) (4.2) (5.5) (7.3)
Effect of
movements
in exchange
rates (2.7) (4.5) - (7.2) (0.3) (0.7) (1.0) (8.2)
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Balance at 30
June
2021 24.5 56.9 - 81.4 6.5 12.5 19.0 100.4
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Depreciation
for the
year 3.8 11.0 - 14.8 4.8 6.8 11.6 26.4
Disposals (1.3) (1.8) - (3.1) (0.5) (5.9) (6.4) (9.5)
Impairment 0.8 0.1 - 0.9 - - - 0.9
Effect of
movements
in exchange
rates 4.4 7.1 - 11.5 0.6 1.6 2.2 13.7
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Balance at 30
June
2022 32.2 73.3 - 105.5 11.4 15.0 26.4 131.9
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
Carrying
amounts
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
At 30 June
2022 68.0 40.3 29.6 137.9 20.1 13.4 33.5 171.4
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
At 30 June
2021 42.1 31.1 22.1 95.3 14.2 13.5 27.7 123.0
------------- ------------ ------------ ------------- ------- ------------- ------------- ------------- ------
12. TRADE AND OTHER RECEIVABLES
2022 2021
GBPm GBPm
------------------------------------ ----- -----
Trade receivables 105.3 87.2
------------------------------------ ----- -----
Less expected credit loss allowance (4.3) (5.0)
------------------------------------ ----- -----
Trade receivables net of impairment 101.0 82.2
------------------------------------ ----- -----
Other debtors 10.7 6.4
------------------------------------ ----- -----
Prepayments 8.5 6.6
------------------------------------ ----- -----
Contract assets 7.7 7.7
------------------------------------ ----- -----
Other taxes and social security 1.6 3.3
------------------------------------ ----- -----
Current trade and other receivables 129.5 106.2
------------------------------------ ----- -----
Other debtors 3.7 1.8
Contract assets 4.9 -
------------------------------------ ----- -----
Non-current other receivables 8.6 1.8
------------------------------------ ----- -----
138.1 108.0
------------------------------------ ----- -----
Trade receivables
The average credit period our customers take on the sales of
goods is 62 days (2021: 53 days). We do not charge interest on
receivables for the first 30 days from the date of the invoice.
The Group always measures the loss allowance for trade
receivables at an amount equal to lifetime expected credit losses
('ECLs'). The ECLs on trade receivables are estimated using a
provision matrix by reference to past default experience of the
debtor and an analysis of the debtor's current financial position,
adjusted for factors that are specific to the general economic
conditions of the industry and country in which the debtor operates
and an assessment of both the current and the forecast direction of
conditions at the reporting date. The Group writes off a trade
receivable when there is information indicating that the debtor is
in severe financial difficulty and there is no realistic prospect
of recovery, such as when the debtor has been placed under
liquidation or has entered into bankruptcy proceedings.
No customer represents more than 5% of the total balance of
trade receivables (2021: no more than 5%).
13. TRADE AND OTHER PAYABLES
2022 2021
GBPm GBPm
------------------------------------- ----- -----
Trade payables 36.0 23.7
------------------------------------- ----- -----
Other payables 8.2 7.6
------------------------------------- ----- -----
Accrued expenses 61.4 60.2
------------------------------------- ----- -----
Contract liabilities 10.1 10.6
------------------------------------- ----- -----
Other taxes and social security 9.0 8.2
------------------------------------- ----- -----
Current trade and other payables 124.7 110.3
------------------------------------- ----- -----
Contract liabilities 0.2 1.4
------------------------------------- ----- -----
Non-current trade and other payables 0.2 1.4
------------------------------------- ----- -----
The average credit period taken for trade purchases is 39 days
(2021: 27 days).
14. RETIREMENT BENEFIT OBLIGATIONS
The Group operates a number of defined contribution and defined
benefit pension schemes covering many of its employees. The
principal funds are the Milk Pension Fund ('MPF') and the Dalgety
Pension Fund ('DPF') in the UK, which are defined benefit schemes.
The assets of these funds are held separately from the Group's
assets, are administered by trustees and managed professionally.
These schemes are closed to new members.
Retirement benefit obligations
The financial positions of the defined benefit schemes, as
recorded in accordance with IAS 19 and IFRIC 14, are aggregated for
disclosure purposes. The liability split by principal scheme is set
out below.
2022 2021
GBPm GBPm
-------------------------------------- ----- -----
The Milk Pension Fund - Genus's share - 2.2
-------------------------------------- ----- -----
The Dalgety Pension Fund - -
-------------------------------------- ----- -----
National Pig Development Pension Fund 0.1 0.3
-------------------------------------- ----- -----
Post-retirement healthcare 0.6 0.6
-------------------------------------- ----- -----
Other unfunded schemes 7.6 8.0
-------------------------------------- ----- -----
Overall net pension liability 8.3 11.1
-------------------------------------- ----- -----
Overall, we expect to pay GBP1.0m (2021: GBP4.1m) in
contributions to defined benefit plans in the 2023 financial
year.
Aggregated position of defined benefit schemes
2022 2021
GBPm GBPm
---------------------------------------------------------- ------- ---------
Present value of funded obligations (includes Genus's 86%
share of MPF (2021: 86%)) 857.6 1,097.7
Present value of unfunded obligations 8.4 8.9
---------------------------------------------------------- ------- ---------
Total present value of obligations 866.0 1,106.6
---------------------------------------------------------- ------- ---------
Fair value of plan assets (includes Genus's 86% share of
MPF (2021: 86%)) (936.3) (1,147.2)
---------------------------------------------------------- ------- ---------
Restricted recognition of asset (MPF and DPF) 78.6 8.8
---------------------------------------------------------- ------- ---------
Recognition of additional liability (MPF) - 42.9
---------------------------------------------------------- ------- ---------
Recognised liability for defined benefit obligations 8.3 11.1
---------------------------------------------------------- ------- ---------
Summary of movements in Group deficit during the year
2022 2021
GBPm GBPm
---------------------------------------------- ------ ------
Deficit in schemes at the start of the year (11.1) (18.1)
---------------------------------------------- ------ ------
Administration expenses (0.4) (0.4)
---------------------------------------------- ------ ------
Exceptional cost (0.4) (2.3)
---------------------------------------------- ------ ------
Reclassified from accruals - (0.4)
---------------------------------------------- ------ ------
Contributions paid into the plans 3.5 7.4
---------------------------------------------- ------ ------
Net pension finance cost (0.2) (0.3)
---------------------------------------------- ------ ------
Actuarial gains recognised during the year 27.3 22.3
---------------------------------------------- ------ ------
Movement in restriction of assets (69.8) (0.1)
---------------------------------------------- ------ ------
Release/(recognition) of additional liability 43.7 (19.9)
---------------------------------------------- ------ ------
Exchange rate adjustment (0.9) 0.7
---------------------------------------------- ------ ------
Deficit in schemes at the end of the year (8.3) (11.1)
---------------------------------------------- ------ ------
The expense is recognised in the following line items in the
Group Income Statement
2022 2021
GBPm GBPm
------------------------ ----- -----
Administrative expenses 0.4 0.4
------------------------ ----- -----
Exceptional cost 0.4 2.3
------------------------ ----- -----
Net finance charge 0.2 0.3
------------------------ ----- -----
1.0 3.0
------------------------ ----- -----
Actuarial assumptions and sensitivity analysis
Principal actuarial assumptions (expressed as weighted averages)
are:
2022 2021
--------------------- ----- -----
Discount rate 3.90% 1.90%
--------------------- ----- -----
Consumer Price Index 2.40% 2.10%
--------------------- ----- -----
Retail Price Index 2.90% 2.85%
--------------------- ----- -----
The mortality assumptions used are consistent with those
recommended by the schemes' actuaries and reflect the latest
available tables, adjusted for the experience of the scheme where
appropriate. For 2022, the mortality tables used are 100% of the
S3PMA (males)/S3PFA_M(females) all lives tables, with birth year
and 2021 CMI projections with a smoothing parameter of Sk = 7.0 and
A=0.5%, subject to a long-term rate of improvement of 1.5% for
males and females and for 2021, the mortality tables used are 97%
of the S2NA tables, with birth year and 2021 CMI projections with a
smoothing parameter of Sk = 7.0 and A=0%, subject to a long-term
rate of improvement of 1.25% for males and females.
15. NOTES TO THE CASH FLOW STATEMENT
2022 2021
GBPm GBPm
------------------------------------------------------------- ------ ------
Profit for the year 36.7 46.8
-------------------------------------------------------------- ------ ------
Adjustment for:
------------------------------------------------------------- ------ ------
Net IAS 41 valuation movement on biological assets 5.4 10.8
-------------------------------------------------------------- ------ ------
Amortisation of acquired intangible assets 8.3 7.4
-------------------------------------------------------------- ------ ------
Share-based payment expense 3.7 7.7
-------------------------------------------------------------- ------ ------
Share of profit of joint ventures and associates (5.2) (13.1)
-------------------------------------------------------------- ------ ------
Finance costs (net) 6.2 5.0
-------------------------------------------------------------- ------ ------
Income tax expense 11.7 9.0
-------------------------------------------------------------- ------ ------
Exceptional items 2.0 3.3
-------------------------------------------------------------- ------ ------
Adjusted operating profit from continuing operations 68.8 76.9
-------------------------------------------------------------- ------ ------
Depreciation of property, plant and equipment 26.4 24.0
-------------------------------------------------------------- ------ ------
Loss on disposal of plant and equipment 0.4 0.4
-------------------------------------------------------------- ------ ------
Loss on disposal of intangible assets - 0.5
-------------------------------------------------------------- ------ ------
Amortisation and impairment of intangible assets 4.3 3.7
-------------------------------------------------------------- ------ ------
Adjusted earnings before interest, tax, depreciation
and amortisation 99.9 105.5
-------------------------------------------------------------- ------ ------
Cash impact of exceptional items 1.1 (3.0)
-------------------------------------------------------------- ------ ------
Other movements in biological assets and harvested
produce (19.1) (12.8)
-------------------------------------------------------------- ------ ------
Decrease in provisions and release in deferred consideration - (0.4)
-------------------------------------------------------------- ------ ------
Additional pension contributions in excess of pension
charge (3.1) (7.0)
-------------------------------------------------------------- ------ ------
Other 0.2 (1.3)
-------------------------------------------------------------- ------ ------
Operating cash flows before movement in working capital 79.0 81.0
-------------------------------------------------------------- ------ ------
Increase in inventories (6.1) (1.3)
-------------------------------------------------------------- ------ ------
Increase in receivables (18.5) (11.0)
-------------------------------------------------------------- ------ ------
Increase in payables 2.2 17.9
-------------------------------------------------------------- ------ ------
Cash generated by operations 56.6 86.6
-------------------------------------------------------------- ------ ------
Interest received 0.4 0.4
-------------------------------------------------------------- ------ ------
Interest and other finance costs paid (4.0) (2.8)
-------------------------------------------------------------- ------ ------
Interest on leased assets (1.1) (0.8)
-------------------------------------------------------------- ------ ------
Cash flow from derivative financial instruments (0.1) 0.2
-------------------------------------------------------------- ------ ------
Income taxes paid (17.5) (16.1)
-------------------------------------------------------------- ------ ------
Net cash from operating activities 34.3 67.5
-------------------------------------------------------------- ------ ------
Analysis of net debt
Total changes in liabilities due to financing activities are as
follows:
At 1 Net Other
July cash Foreign non-cash At 30
2021 flows exchange movements June 2022
GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------- ------- ---------- ---------- -----------
Cash and cash equivalents 46.0 (11.0) 3.8 - 38.8
-------------------------------------- ------- ------- ---------- ---------- -----------
Interest-bearing loans - current (13.9) 8.9 (1.2) (0.9) (7.1)
-------------------------------------- ------- ------- ---------- ---------- -----------
Lease liabilities - current (9.0) 11.3 (0.7) (11.7) (10.1)
-------------------------------------- ------- ------- ---------- ---------- -----------
(22.9) 20.2 (1.9) (12.6) (17.2)
------------------------------------- ------- ------- ---------- ---------- -----------
Interest-bearing loans - non-current (109.4) (63.1) (9.6) - (182.1)
-------------------------------------- ------- ------- ---------- ---------- -----------
Lease liabilities - non-current (19.3) - (1.6) (3.6) (24.5)
-------------------------------------- ------- ------- ---------- ---------- -----------
(128.7) (63.1) (11.2) (3.6) (206.6)
------------------------------------- ------- ------- ---------- ---------- -----------
Total debt financing (151.6) (42.9) (13.1) (16.2) (223.8)
-------------------------------------- ------- ------- ---------- ---------- -----------
Net debt (105.6) (53.9) (9.3) (16.2) (185.0)
-------------------------------------- ------- ------- ---------- ---------- -----------
Included within non-cash movements is GBP15.3m in relation to
net new leases and GBP0.9m in the unwinding of debt issue
costs.
At 1 Net Other
July cash Foreign non-cash At 30
2020 flows exchange movements June 2021
GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------- ------- ---------- ---------- -----------
Cash and cash equivalents 41.3 6.6 (1.9) - 46.0
-------------------------------------- ------- ------- ---------- ---------- -----------
Interest-bearing loans - current (9.2) (4.4) 0.6 (0.9) (13.9)
-------------------------------------- ------- ------- ---------- ---------- -----------
Lease liabilities - current (10.0) 11.7 0.2 (10.9) (9.0)
-------------------------------------- ------- ------- ---------- ---------- -----------
(19.2) 7.3 0.8 (11.8) (22.9)
------------------------------------- ------- ------- ---------- ---------- -----------
Interest-bearing loans - non-current (103.6) (12.7) 6.9 - (109.4)
-------------------------------------- ------- ------- ---------- ---------- -----------
Lease liabilities - non-current (21.1) - 0.3 1.5 (19.3)
-------------------------------------- ------- ------- ---------- ---------- -----------
(124.7) (12.7) 7.2 1.5 (128.7)
------------------------------------- ------- ------- ---------- ---------- -----------
Total debt financing (143.9) (5.4) 8.0 (10.3) (151.6)
-------------------------------------- ------- ------- ---------- ---------- -----------
Net debt (102.6) 1.2 6.1 (10.3) (105.6)
-------------------------------------- ------- ------- ---------- ---------- -----------
Included within non-cash movements is GBP9.4m in relation to net
new leases and GBP0.9m in the unwinding of debt issue costs.
16. CONTINGENCIES AND BANK GUARANTEES
Contingent liabilities are potential future cash outflows, where
the likelihood of payments is considered more than remote but is
not considered probable or cannot be measured reliably. Assessing
the amount of liabilities that are not probable is highly
judgemental.
The retirement benefit obligations referred to in note 14
include obligations relating to the MPF defined benefit scheme.
Genus, together with other participating employers, is joint and
severally liable for the scheme's obligations. Genus has accounted
for its section and its share of any orphan assets and liabilities,
collectively representing approximately 86% (2021: 86%) of the MPF.
As a result of the joint and several liability, Genus has a
contingent liability for the scheme's obligations that it has not
accounted for. The total deficit of the MPF from the most recent
triennial valuation can be found in note 14.
The Group has widespread global operations and is consequently a
defendant in many legal, tax and customs proceedings incidental to
those operations. In addition, there are contingent liabilities
arising in the normal course of business in respect of indemnities,
warranties and guarantees. These contingent liabilities are not
considered to be unusual in the context of the normal operating
activities of the Group. Provisions have been recognised in
accordance with the Group accounting policies where required. None
of these claims are expected to result in a material gain or loss
to the Group.
As described in note 3, the Group is involved in ongoing
litigation proceedings and investigations with ST that are at
various legal stages. The Group makes a provision for amounts to
the extent where an outflow of economic benefit is probable and can
be reliably estimated. However, there are specific claims
identified in the litigation which the Group considers the outcome
of the claim is not probable and will not result in the outflow of
economic benefit.
The Group's future tax charge and effective tax rate could be
affected by factors such as countries reforming their tax
legislation to implement the OECD's BEPS recommendations and by
European Commission initiatives including state aid
investigations.
At 30 June 2022, we had entered into bank guarantees totalling
GBP20.2m (2021: GBP19.1m).
17. NON-CONTROLLING INTEREST
2022 2021
GBPm GBPm
------------------------------------------------------ ----- -----
Non-controlling interest (0.7) 3.6
------------------------------------------------------ ----- -----
Put option over non-controlling interest at inception (5.7) (5.1)
------------------------------------------------------ ----- -----
Total non-controlling interest (6.4) (1.5)
------------------------------------------------------ ----- -----
Summarised financial information in respect of each of the
Group's subsidiaries that has a material non-controlling interest
is set out below before intra-Group eliminations.
De Novo PIC Italia
Genetics S.r.l. 2022
LLC GBPm GBPm GBPm
-------------------------------------------------- --------- ---------- ------
Revenue 3.7 3.4 7.1
-------------------------------------------------- --------- ---------- ------
Expenses (12.6) (2.6) (15.2)
-------------------------------------------------- --------- ---------- ------
Total comprehensive (expense)/income for the year (8.9) 0.8 (8.1)
-------------------------------------------------- --------- ---------- ------
Total comprehensive (expense)/income attributable
to owners of the Company (4.5) 0.6 (3.9)
-------------------------------------------------- --------- ---------- ------
Total comprehensive (expense)/income attributable
to the non-controlling interest (4.4) 0.2 (4.2)
-------------------------------------------------- --------- ---------- ------
Biological assets 15.2 - 15.2
-------------------------------------------------- --------- ---------- ------
Current assets 0.9 1.0 1.9
-------------------------------------------------- --------- ---------- ------
Other non-current assets 0.8 2.3 3.1
-------------------------------------------------- --------- ---------- ------
Current liabilities (19.6) (1.8) (21.4)
-------------------------------------------------- --------- ---------- ------
Net (liabilities)/ assets (2.7) 1.5 (1.2)
-------------------------------------------------- --------- ---------- ------
Equity attributable to owners of the Company 1.8 (1.3) 0.5
-------------------------------------------------- --------- ---------- ------
Non-controlling interest (0.9) 0.2 (0.7)
-------------------------------------------------- --------- ---------- ------
Dividends of GBP0.1m were paid to non-controlling interests
(2021: GBP0.2m).
De Novo PIC Italia
Genetics S.r.l. 2021
LLC GBPm GBPm GBPm
--------------------------------------------------------------- --------- ---------- ------
Revenue 3.4 4.1 7.5
--------------------------------------------------------------- --------- ---------- ------
Expenses (4.9) (3.3) (8.2)
--------------------------------------------------------------- --------- ---------- ------
Total comprehensive income for the year (1.5) 0.8 (0.7)
--------------------------------------------------------------- --------- ---------- ------
Total comprehensive income attributable to owners
of the Company (0.8) 0.6 (0.2)
--------------------------------------------------------------- --------- ---------- ------
Total comprehensive income attributable to the non-controlling
interest (0.7) 0.2 (0.5)
--------------------------------------------------------------- --------- ---------- ------
Biological assets 15.8 - 15.8
--------------------------------------------------------------- --------- ---------- ------
Current assets 0.9 1.2 2.1
--------------------------------------------------------------- --------- ---------- ------
Other non-current assets 0.8 1.8 2.6
--------------------------------------------------------------- --------- ---------- ------
Current liabilities (11.5) (1.4) (12.9)
--------------------------------------------------------------- --------- ---------- ------
Net assets 6.0 1.6 7.6
--------------------------------------------------------------- --------- ---------- ------
Equity attributable to owners of the Company (2.6) (1.4) (4.0)
--------------------------------------------------------------- --------- ---------- ------
Non-controlling interest 3.4 0.2 3.6
--------------------------------------------------------------- --------- ---------- ------
18. POST BALANCE SHEET EVENTS
With effect from 26 August 2022, the Group and its lenders
increased the Company's multi-currency RCF by GBP40m to GBP190m and
the USD RCF by USD 25m to USD 150m, and extended the maturity date
of the total facilities to 24 August 2025.
Alternative Performance Measures GLOSSARY
The Group tracks a number of APMs in managing its business,
which are not defined or specified under the requirements of IFRS
because they exclude amounts that are included in, or include
amounts that are excluded from, the most directly comparable
measure calculated and presented in accordance with IFRS, or are
calculated using financial measures that are not calculated in
accordance with IFRS.
The Group believes that these APMs, which are not considered to
be a substitute for or superior to IFRS measures, provide
stakeholders with additional helpful information on the performance
of the business. These APMs are consistent with how the business
performance is planned and reported within the internal management
reporting to the Board and GELT. Some of these APMs are also used
for the purpose of setting remuneration targets.
These APMs should be viewed as supplemental to, but not as a
substitute for, measures presented in the consolidated financial
information relating to the Group, which are prepared in accordance
with IFRS. The Group believes that these APMs are useful indicators
of its performance. However, they may not be comparable to
similarly-titled measures reported by other companies, due to
differences in the way they are calculated.
The key APMs that the Group uses include:
Alternative Calculation methodology and closest Reasons why we believe
Performance Measures equivalent IFRS measure the
(where applicable) APMs are useful
---------------------- ---------------------------------------------- ----------------------------------
Income Statement measures
----------------------------------------------------------------------------------------------------------
Adjusted operating Adjusted operating profit is operating Allows the comparison
profit exc JVs profit with the net IAS 41 valuation of underlying financial
movement on biological assets, amortisation performance by excluding
of acquired intangible assets, share-based the impacts of exceptional
payment expense and exceptional items items and is a performance
added back and excludes JV and associate indicator against which
results. short-term and long-term
incentive outcomes
Closest equivalent IFRS measure: for our senior executives
Adjusted operating Operating profit (1) are measured:
profit inc JVs net IAS 41 valuation
See reconciliation below. movements on biological
assets - these movements
Including adjusted operating profit can be materially volatile
from JV and associate results. and do not directly
Adjusted operating correlate to the underlying
profit inc JVs trading performance
exc gene editing See reconciliation below. in the period. Furthermore,
costs the movement is non-cash
related and many assumptions
Including adjusted operating profit used in the valuation
from JV and associate results but model are based on
excluding gene editing costs. projections rather
than current trading;
Adjusted operating amortisation of acquired
profit inc JVs See reconciliation below. intangible assets -
after tax excluding this improves
the comparability between
Adjusted operating profit including acquired and organically
JV less adjusted effective tax. grown operations, as
Adjusted profit the latter cannot recognise
inc JVs before internally generated
tax See reconciliation below. intangible assets.
Adjusting for amortisation
provides a more consistent
Adjusted operating profit including basis for comparison
Adjusted profit JVs less net finance costs. between the two;
inc JVs share-based payments
after tax - this expense is considered
See reconciliation below. to be relatively volatile
and not fully reflective
of the current period
Adjusted profit including JVs before trading, as the performance
tax less adjusted effective tax. criteria are based
on EPS performance
See reconciliation below. over a three-year period
and include estimates
of future performance;
and
exceptional items -
these are items which
due to either their
size or their nature
are excluded, to improve
the understanding of
the Group's underlying
performance.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted effective Total income tax charge for the Group Provides an underlying
tax rate excluding the tax impact of adjusting tax rate to allow comparability
items, divided by the adjusted operating of underlying financial
profit. performance, by excluding
the impacts of net
Closest equivalent IFRS measure: IAS 41 valuation movement
Effective tax rate on biological assets,
amortisation of acquired
See reconciliation below. intangible assets,
share-based payment
expense and exceptional
items.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted basic Adjusted profit after tax profit On a per share basis,
earnings divided by the this allows the comparability
per share weighted basic average number of of underlying financial
shares. performance by excluding
the impacts of adjusting
Closest equivalent IFRS measure: items.
Earnings per share
See calculation below.
Adjusted diluted
earnings per
share Underlying attributable profit divided
by the diluted weighted basic average
number of shares.
Closest equivalent IFRS measure:
Diluted earnings per share
See calculation below.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted earnings Adjusted earnings per share divided The Board dividend
cover by the expected dividend for the policy targets the
year. adjusted earning cover
to be between 2.5-3
See calculation below. times.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted EBITDA This is adjusted operating profit, This APM is presented
- calculated adding back cash received from our because it is used
in accordance JVs, depreciation of property, plant in calculating our
with the definitions and equipment, depreciation of the ratio of net debt to
used in our financing historical cost of biological assets, EBITDA and our interest
facilities operational amortisation (i.e. excluding cover, which we report
amortisation of acquired intangibles) to our banks to ensure
and deducting the amount attributable compliance with our
to minority interest. bank covenants.
Closest equivalent IFRS measure:
Operating profit (1)
See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted operating Adjusted operating profit (including Allows for the comparability
margin JVs) divided by revenue. of underlying financial
performance by excluding
the impacts of exceptional
items.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted operating Adjusted operating profit divided
margin (exc JVs) by revenue.
---------------------- ---------------------------------------------- ----------------------------------
Constant currency The Group reports certain financial The Group's business
basis measures, on both a reported and operates in multiple
constant currency basis and retranslates countries worldwide
the current year's results at the and its trading results
average actual exchange rates used are translated back
in the previous financial year. into the Group's functional
currency of Sterling.
This measure eliminates
the effects of exchange
rate fluctuations when
comparing year-on-year
reported results.
---------------------- ---------------------------------------------- ----------------------------------
Revenue excluding Revenue made by excluding revenue Allows for the comparison
Genus PIC China made by Genus PIC China. of the financial performance
See reconciliation below. of Genus PIC by excluding
the results of Genus
PIC China, which has
been impacted by volatile
and challenging market
conditions.
Allows for the comparison
of
underlying financial
performance of
Genus by excluding
Genus PIC China.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted operating Adjusted operating profit including
profit inc JVs JVs for Genus PIC excluding adjusted
for Genus PIC operating profit including JVs made
and exc PIC China by Genus PIC China .
See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Adjusted Profit Adjusted profit before tax excluding
before tax exc PIC China.
PIC China See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Balance Sheet measures
----------------------------------------------------------------------------------------------------------
Net debt Net debt is gross debt, made up of This allows the Group
unsecured bank loans and overdrafts to monitor its levels
and obligations under finance leases, of debt.
with a deduction for cash and cash
equivalents.
See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Net debt - calculated Net debt excluding the impact of This is a key metric
in accordance adopting IFRS 16 and adding back that we report to our
with the definitions guarantees and deferred purchase banks to ensure compliance
used in our financing arrangements. with our bank covenants.
facilities
See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Cash flow measures
----------------------------------------------------------------------------------------------------------
Cash conversion Cash generated by operations as a This is used to measure
percentage of adjusted operating how much operating
profit excluding JVs. cash flow we are generating
and how efficient we
See calculation below. are at converting our
operating profit into
cash.
---------------------- ---------------------------------------------- ----------------------------------
Free cash flow Cash generated by the Group before Shows the cash retained
debt repayments, acquisitions and by the Group in the
investments, dividends and proceeds year.
from share issues.
Closest IFRS measure: Net cash flow
from operating activities
See reconciliation below.
---------------------- ---------------------------------------------- ----------------------------------
Other measures
----------------------------------------------------------------------------------------------------------
Interest cover The ratio of adjusted net finance This APM is used to
costs, calculated in accordance with understand our ability
the definitions used in our financing to meet our interest
facilities, is net finance costs payments and is also
with a deduction for pension interest, a key metric that we
interest from adopting IFRS 16, unwinding report to our banks
of discount on put options and amortisation to ensure compliance
of refinancing fees, to adjusted with our bank covenants.
EBITDA.
Closest equivalent IFRS components
for the ratio: The equivalent IFRS
components are finance costs, finance
income and operating profit
See calculation and reconciliation
below.
---------------------- ---------------------------------------------- ----------------------------------
Ratio of net The ratio of net debt, calculated This APM is used as
debt to adjusted in accordance with the definitions a measurement of our
EBITDA used in our financing facilities, leverage and is also
is gross debt, made up of unsecured a key metric that we
bank loans and overdrafts and obligations report to our banks
under finance leases, with a deduction to ensure compliance
for cash and cash equivalents and with our bank covenants.
adding back amounts related to guarantees
and deferred purchase arrangements,
to adjusted EBITDA.
Closest equivalent IFRS components
for the ratio: The equivalent IFRS
components are gross debt, cash and
cash equivalents and operating profit
See calculation below.
---------------------- ---------------------------------------------- ----------------------------------
Return on adjusted The Group's return on adjusted invested This APM is used to
invested capital capital is measured on the basis measure our ability
of adjusted operating profit including to efficiently invest
JVs after tax, which is operating our capital and gives
profit with the pre-tax share of us a sense of how well
profits from JVs and associates, we are using our resources
net IAS 41 valuation movement on to generate returns.
biological assets, amortisation of
acquired intangible assets, share-based
payment expense and exceptional items
added back, net of amounts attributable
to non-controlling interest and tax.
The adjusted operating profit including
JVs after tax is divided by adjusted
invested capital, which is the equity
attributable to owners of the Company
adding back net debt, pension liability
net of related deferred tax and deducting
biological assets (less historical
cost) and goodwill, net of related
deferred tax.
Closest equivalent IFRS components
for the ratio:
Return on invested capital
See calculation and reconciliation
below.
---------------------- ---------------------------------------------- ----------------------------------
1 Operating profit is not defined per IFRS. It is presented in
the Group Income Statement and is shown as profit before tax,
finance income/costs and share of post-tax profit of JVs and
associates retained.
The tables below reconcile the closest equivalent Ifrs measure
to the apm or outline the calculation of the apm
Income statement measures
Adjusted operating profit exc JVs
Adjusted operating profit inc JVs
Adjusted operating profit inc JVs and exc gene editing costs
2022 2021
------------------------------------ ----------- ------------ ----------------------
GBPm GBPm GBPm GBPm Reference
------------------------------------ ---- ----- ----- ----- ----------------------
Operating profit 49.4 47.7 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Add back:
------------------------------------ ---- ----- ----- ----- ----------------------
Net IAS 41 valuation movement
on biological assets 5.4 10.8 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Amortisation of acquired intangible
assets 8.3 7.4 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Share-based payment expense 3.7 7.7 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Exceptional items 2.0 3.3 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Adjusted operating profit exc
JVs 68.8 76.9 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Less: amounts attributable to
non-controlling interest (0.3) (0.1) Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Operating profit from JVs and
associates 5.2 13.1 Group Income Statement
------------------------------------ ---- ----- ----- ----- ----------------------
Note 6 - Income
Tax on JVs and associates 2.6 3.0 tax expense
------------------------------------ ---- ----- ----- ----- ----------------------
Net IAS 41 valuation movement 1.4 (3.1) No direct reference
------------------------------------ ---- ----- ----- ----- ----------------------
Adjusted operating profit from
JVs 9.2 13.0
------------------------------------ ---- ----- ----- ----- ----------------------
Adjusted operating profit inc
JVs 77.7 89.8
------------------------------------ ---- ----- ----- ----- ----------------------
Note 3 - Segmental
Gene editing costs 7.9 7.6 information
------------------------------------ ---- ----- ----- ----- ----------------------
Adjusted operating profit inc
JVs and exc gene editing costs 85.6 97.4
------------------------------------ ---- ----- ----- ----- ----------------------
Adjusted operating profit inc JVs after tax
2022 2021
------------------------------ ------------- ------------- -------------------
GBPm GBPm Reference
------------------------------ ----- ------ ----- ------ -------------------
Adjusted operating profit inc
JVs 77.7 89.8 See APM
------------------------------ ----- ------ ----- ------ -------------------
Note 7 - Earnings
Effective tax rate 24.3% 22.5% per share
------------------------------ ----- ------ ----- ------ -------------------
Adjusted tax (18.9) (20.2) No direct reference
------------------------------ ----- ------ ----- ------ -------------------
Adjusted operating profit inc
JVs after tax 58.8 69.6
------------------------------ ----- ------ ----- ------ -------------------
Adjusted profit inc JVs before tax
Adjusted profit inc JVs after tax
2022 2021
------------------------------- ------- ------ --------------------
GBPm GBPm Reference
------------------------------- ------ ------ --------------------
Adjusted operating profit inc
JVs 77.7 89.8 See APM
-------------------------------- ------ ------ --------------------
Note 5 - Net finance
Less net finance costs (6.2) (5.0) costs
-------------------------------- ------ ------ --------------------
Adjusted profit inc JVs before
tax 71.5 84.8
-------------------------------- ------ ------ --------------------
Note 7 - Earnings
Adjusted tax (17.4) (19.1) per share
-------------------------------- ------ ------ --------------------
Adjusted profit inc JVs after
tax 54.1 65.7
-------------------------------- ------ ------ --------------------
Adjusted effective tax GBPm/rate
2022 2021
------------------------------------ ------------- ------------- ----------------------
GBPm % GBPm % Reference
------------------------------------ ----- ------ ----- ------ ----------------------
Note 7 - Earnings
Adjusted effective tax GBPm/rate 17.4 24.3 19.1 22.5 per share
------------------------------------ ----- ------ ----- ------ ----------------------
Exceptional items (0.8) (40.0) (1.1) (33.3) No direct reference
------------------------------------ ----- ------ ----- ------ ----------------------
Share-based payment expense (0.5) (13.5) (1.6) (20.8) No direct reference
------------------------------------ ----- ------ ----- ------ ----------------------
Amortisation of acquired intangible
assets (3.3) (39.8) (1.5) (20.3) No direct reference
------------------------------------ ----- ------ ----- ------ ----------------------
Net IAS 41 valuation movement
on biological assets 1.5 27.8 (2.9) (26.9) No direct reference
------------------------------------ ----- ------ ----- ------ ----------------------
Note 6 - Taxation
Effective tax GBPm/rate 14.3 28.0 12.0 20.4 and deferred taxation
------------------------------------ ----- ------ ----- ------ ----------------------
Adjusted basic earnings per share
2022 2021 Reference
------------------------------------ ------ ------ -----------------
Adjusted profit inc JVs after
tax (GBPm) 54.1 65.7 See APM
------------------------------------- ------ ------ -----------------
Weighted average number of ordinary Note 7 - Earnings
shares (000s) 65.395 65.108 per share
------------------------------------- ------ ------ -----------------
Adjusted basic earnings per
share (pence) 82.7 100.9
------------------------------------- ------ ------ -----------------
Adjusted diluted earnings per share
2022 2021 Reference
----------------------------------- ------ ------ -----------------
Adjusted profit inc JVs after
tax (GBPm) 54.1 65.7 See APM
------------------------------------ ------ ------ -----------------
Weighted average number of diluted Note 7 - Earnings
ordinary shares (000s) 65.714 65.662 per share
------------------------------------ ------ ------ -----------------
Adjusted diluted earnings per
share (pence) 82.3 100.1
------------------------------------ ------ ------ -----------------
Adjusted earnings cover
2022 2021
---------------------------- ------------ ------------ ------------------
pence Times pence times Reference
---------------------------- ----- ----- ----- ----- ------------------
Adjusted earnings per share 82.7 100.9 See APM
---------------------------- ----- ----- ----- ----- ------------------
Dividend for the year 32.0 32.0 Note 8 - Dividends
---------------------------- ----- ----- ----- ----- ------------------
Adjusted earnings cover 2.6 3.2
---------------------------- ----- ----- ----- ----- ------------------
Adjusted EBITDA - as calculated under our financing
facilities
2022 2021
------------------------------------ ------------- ------------- ----------------------
GBPm GBPm GBPm GBPm Reference
------------------------------------ ------ ----- ------ ----- ----------------------
Operating profit 49.4 47.7 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Add back:
------------------------------------ ------ ----- ------ ----- ----------------------
Net IAS 41 valuation movement
on biological assets 5.4 10.8 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Amortisation of acquired intangible
assets 8.3 7.4 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Share-based payment expense 3.7 7.7 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Exceptional items 2.0 3.3 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Adjusted operating profit exc
JVs 68.8 76.9 Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Adjust for:
------------------------------------ ------ ----- ------ ----- ----------------------
Cash received from JVs (dividend Group Statement
and loan repayment) 3.2 4.1 of Cash Flows
------------------------------------ ------ ----- ------ ----- ----------------------
Depreciation: property, plant Note 11 - Property,
and equipment 26.4 24.0 plant and equipment
------------------------------------ ------ ----- ------ ----- ----------------------
Operational lease payments (12.4) (12.5) No direct reference
------------------------------------ ------ ----- ------ ----- ----------------------
Depreciation: historical cost
of biological assets 10.7 10.0 See Financial Review
Amortisation and impairment
(excluding separately identifiable Note 9 - Intangible
acquired intangible assets) 4.3 3.7 assets
Less amounts attributable to
non-controlling interest (0.3) (0.1) Group Income Statement
------------------------------------ ------ ----- ------ ----- ----------------------
Adjusted EBITDA - as calculated
under our financing facilities 100.7 106.1
------------------------------------ ------ ----- ------ ----- ----------------------
Revenue excluding Genus PIC China
30 June 2022 30 June 2021
-------------------------------- -------------- --------------
GBPm GBPm GBPm GBPm Reference
-------------------------------- ------- ----- ------- ----- -------------------
Note 3 - Segmental
Revenue 593.4 574.3 information
-------------------------------- ------- ----- ------- ----- -------------------
Less revenue in Genus PIC China (29.9) (55.0) No direct reference
-------------------------------- ------- ----- ------- ----- -------------------
Revenue excluding Genus PIC
China 563.5 519.3
-------------------------------- ------- ----- ------- ----- -------------------
PIC Adjusted operating profit inc JVs and exc PIC China
30 June 2022 30 June 2021
-------------- --------------
GBPm GBPm GBPm GBPm Reference
----------------------------------- ------ ------ ------ ------ -------------------
Adjusted operating profit in Note 3 - Segmental
Genus PIC 112.3 122.9 information
----------------------------------- ------ ------ ------ ------ -------------------
Adjusted operating profit from
PIC JV's and associates 9.1 13.2 No direct reference
----------------------------------- ------ ------ ------ ------ -------------------
Less amounts attributable to
non-controlling interest (0.2) (0.2) No direct reference
----------------------------------- ------ ------ ------ ------ -------------------
Adjusted operating profit inc
JVs 121.2 135.9
----------------------------------- ------ ------ ------ ------ -------------------
Less: PIC China adjusted operating
profit inc JVs (5.6) (33.4) No direct reference
----------------------------------- ------ ------ ------ ------ -------------------
PIC Adjusted operating profit
inc JVs exc PIC China 115.6 102.5
----------------------------------- ------ ------ ------ ------ -------------------
Adjusted Profit before tax exc PIC China
30 June 2022 30 June 2021
---------------------------- --------------- --------------
GBPm GBPm GBPm GBPm Reference
---------------------------- ------- ------ ----- ------- ----------------------
Adjusted profit before tax 71.5 84.8 Group Income statement
------------------------------------- ------ ----- ------- ----------------------
Less adjusted profit before
tax in Genus PIC China (5.6) (33.4) No direct reference
------------------------------------- ------ ----- ------- ----------------------
Adjusted profit before tax
exc PIC China 65.9 51.4
------------------------------------- ------ ----- ------- ----------------------
Balance sheet measures
Net debt
Net debt as calculated under our financing facilities
2022 2021
------------------------------------ ------------- ------------- -----------------------
GBPm GBPm GBPm GBPm Reference
------------------------------------ ----- ------ ----- ------ -----------------------
Current unsecured bank loans
and overdrafts 7.1 13.9
------------------------------------ ----- ------ ----- ------ -----------------------
Non-current unsecured bank loans
and overdrafts 182.1 109.4
------------------------------------ ----- ------ ----- ------ -----------------------
Unsecured bank loans and overdrafts 189.2 123.3 Group Balance Sheet
------------------------------------ ----- ------ ----- ------ -----------------------
Current obligations under finance
leases 10.1 9.0
------------------------------------ ----- ------ ----- ------ -----------------------
Non-current obligations under
finance leases 24.5 19.3
------------------------------------ ----- ------ ----- ------ -----------------------
Obligations under finance leases 34.6 28.3 Group Balance Sheet
------------------------------------ ----- ------ ----- ------ -----------------------
Note 15 - Notes
to the cash flow
Total debt financing 223.8 151.6 statement
------------------------------------ ----- ------ ----- ------ -----------------------
Deduct:
------------------------------------ ----- ------ ----- ------ -----------------------
Cash and cash equivalents (38.8) (46.0) Group Balance Sheet
------------------------------------ ----- ------ ----- ------ -----------------------
Net debt 185.0 105.6
------------------------------------ ----- ------ ----- ------ -----------------------
Deduct:
------------------------------------ ----- ------ ----- ------ -----------------------
Lower of obligations under finance
leases or GBP30m (30.0) (28.3)
------------------------------------ ----- ------ ----- ------ -----------------------
Add back:
------------------------------------ ----- ------ ----- ------ -----------------------
Note 16 - Contingencies
Guarantees 20.2 19.1 and bank guarantees
------------------------------------ ----- ------ ----- ------ -----------------------
Deferred purchase arrangements - 0.1 No direct reference
------------------------------------ ----- ------ ----- ------ -----------------------
Net debt - as calculated under
our financing facilities 175.2 96.5
------------------------------------ ----- ------ ----- ------ -----------------------
Cash flow measures
Cash conversion
2022 2021
------------------------------------ ---------- ---------- ----------------------
GBPm GBPm GBPm GBPm Reference
------------------------------------ ---- ---- ---- ---- ----------------------
Note 15 - Notes
to the cash flow
Cash generated by operations 56.6 86.6 statement
------------------------------------ ---- ---- ---- ---- ----------------------
Operating profit 49.4 47.7 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Add back:
------------------------------------ ---- ---- ---- ---- ----------------------
Net IAS 41 valuation movement
on biological assets 5.4 10.8 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Amortisation of acquired intangible
assets 8.3 7.4 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Share-based payment expense 3.7 7.7 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Exceptional items 2.0 3.3 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Adjusted operating profit exc
JVs 68.8 76.9 Group Income Statement
------------------------------------ ---- ---- ---- ---- ----------------------
Cash conversion (%) 82% 113%
------------------------------------ ---- ---- ---- ---- ----------------------
Free cash flow
2022 2021
-------------------------------- ------------- ------------ -----------------------
GBPm GBPm GBPm GBPm Reference
-------------------------------- ----- ------ ---- ------ -----------------------
Note 15 - Notes
Cash generated by operations 56.6 86.6 to cash flow statement
--------------------------------------- ------ ---- ------ -----------------------
Note 15 - Notes
Net interest and tax paid (22.3) (19.1) to cash flow statement
--------------------------------------- ------ ---- ------ -----------------------
Group Statement
Capital expenditure (50.9) (33.8) of Cash Flows
--------------------------------------- ------ ---- ------ -----------------------
Dividends received from JV and Group Statement
associates 3.2 4.1 of Cash Flows
--------------------------------------- ------ ---- ------ -----------------------
Joint venture and associate - Group Statement
loan (payment)/repayment (0.4) of Cash Flows
-------------------------------- ----- ------ ---- ------ -----------------------
Proceeds from sale of property, - Group Statement
plant and equipment 0.3 of Cash Flows
-------------------------------- ----- ------ ---- ------ -----------------------
Dividend to non-controlling Group Statement
interest (0.1) (0.2) of Cash Flows
--------------------------------------- ------ ---- ------ -----------------------
Free cash flow (13.5) 37.5
--------------------------------------- ------ ---- ------ -----------------------
Other measures
Interest cover
2022 2021
---------------------------------- ------------ ------------ ----------------------
GBPm Times GBPm Times Reference
---------------------------------- ----- ----- ----- ----- ----------------------
Finance costs 6.6 5.4 Group Income Statement
---------------------------------- ----- ----- ----- ----- ----------------------
Finance income (0.4) (0.4) Group Income Statement
---------------------------------- ----- ----- ----- ----- ----------------------
Note 5 - Net finance
Net finance costs 6.2 5.0 costs
---------------------------------- ----- ----- ----- ----- ----------------------
Deduct:
---------------------------------- ----- ----- ----- ----- ----------------------
Note 5 - Net finance
Pension interest (0.2) (0.3) costs
---------------------------------- ----- ----- ----- ----- ----------------------
Note 5 - Net finance
Interest on lease liabilities (1.1) (0.8) costs
---------------------------------- ----- ----- ----- ----- ----------------------
Note 5 - Net finance
Unwinding discount on put options (0.2) (0.6) costs
---------------------------------- ----- ----- ----- ----- ----------------------
Amortisation of refinancing Note 5 - Net finance
fees (0.9) (0.9) costs
---------------------------------- ----- ----- ----- ----- ----------------------
Adjusted net finance costs 3.8 2.4
---------------------------------- ----- ----- ----- ----- ----------------------
Adjusted EBITDA - as calculated
under our financing facilities 100.7 106.1 See APM
---------------------------------- ----- ----- ----- ----- ----------------------
Interest cover 27 45
---------------------------------- ----- ----- ----- ----- ----------------------
Ratio of net debt to adjusted EBITDA
2022 2021
-------------------------------- ------------ ------------ ---------
GBPm Times GBPm Times Reference
-------------------------------- ----- ----- ----- ----- ---------
Net debt - as calculated under
our financing facilities 175.2 96.5 See APM
-------------------------------- ----- ----- ----- ----- ---------
Adjusted EBITDA - as calculated
under our financing facilities 100.7 106.1 See APM
-------------------------------- ----- ----- ----- ----- ---------
Ratio of net debt to EBITDA 1.7 0.9
-------------------------------- ----- ----- ----- ----- ---------
Return on adjusted invested capital
2022 2021
----------------------------------- -------------- -------------- --------------------
GBPm % GBPm % Reference
----------------------------------- ------- ----- ------- ----- --------------------
Adjusted operating profit inc
JVs after tax 58.8 69.6 See APM
----------------------------------- ------- ----- ------- ----- --------------------
Equity attributable to owners
of the Company 578.5 498.1 Group Balance Sheet
----------------------------------- ------- ----- ------- ----- --------------------
Add back:
----------------------------------- ------- ----- ------- ----- --------------------
Note 15 - Notes
to the cash flow
Net debt 185.0 105.6 statement
----------------------------------- ------- ----- ------- ----- --------------------
Pension liability 8.3 11.1 Group Balance Sheet
----------------------------------- ------- ----- ------- ----- --------------------
Related deferred tax (1.3) (2.1) No direct reference
----------------------------------- ------- ----- ------- ----- --------------------
Adjust for:
----------------------------------- ------- ----- ------- ----- --------------------
Biological assets - carrying Note 10 - Biological
value (366.8) (319.5) assets
----------------------------------- ------- ----- ------- ----- --------------------
Biological assets' harvest classed
as inventories (20.9) (17.8) No direct reference
----------------------------------- ------- ----- ------- ----- --------------------
Biological assets - historic
cost 77.2 65.1 See Financial Review
----------------------------------- ------- ----- ------- ----- --------------------
Goodwill (111.0) (101.5) Group Balance Sheet
----------------------------------- ------- ----- ------- ----- --------------------
Related deferred tax 73.0 63.7 No direct reference
----------------------------------- ------- ----- ------- ----- --------------------
Adjusted invested capital 422.0 302.7
----------------------------------- ------- ----- ------- ----- --------------------
Return on adjusted invested
capital 13.9% 23.0%
----------------------------------- ------- ----- ------- ----- --------------------
Return on invested capital
2022 2021
--------------------------------------- ------------- ------------- ----------------------
GBPm % GBPm % Reference
--------------------------------------- ------ ----- ------ ----- ----------------------
Return on adjusted invested
capital 13.9% 23.0% see APM
--------------------------------------- ------ ----- ------ ----- ----------------------
Adjusted operating profit inc
JVs after tax 58.8 69.6 see APM
--------------------------------------- ------ ----- ------ ----- ----------------------
Note 7 - Earnings
Tax rate 18.9 24.3% 20.2 22.5% per share
--------------------------------------- ------ ----- ------ ----- ----------------------
Adjusted operating profit inc
JVs 77.7 89.8 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Adjusted operating profit attributable
to non-controlling interest 0.3 0.1 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Pre-tax share of profits from
JVs exc net IAS 41 valuation
movement (9.2) (13.0) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Adjusted operating profit exc
JVs 68.8 76.9 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Fair value movement on biological
assets (5.4) (10.8) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Amortisation of acquired intangibles (8.3) (7.4) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Share-based payment expense (3.7) (7.7) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Exceptional items (2.0) (3.3) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Share of post-tax profit of
JVs 5.2 13.1 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Finance costs (6.2) (5.0) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Profit before tax 48.4 55.8 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Tax (11.7) (9.0) Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Profit 36.7 46.8 Group Income Statement
--------------------------------------- ------ ----- ------ ----- ----------------------
Equity attributable to owners
of the Company 578.5 498.1 Group Balance Sheet
--------------------------------------- ------ ----- ------ ----- ----------------------
Return on invested capital 6.3% 9.4%
--------------------------------------- ------ ----- ------ ----- ----------------------
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