Genus PLC AGM Trading Update (2684H)
November 23 2022 - 2:44AM
UK Regulatory
TIDMGNS
RNS Number : 2684H
Genus PLC
23 November 2022
Immediate release
23 November 2022
Genus plc
('Genus' or the 'Group')
AGM TRADING UPDATE
Genus (LSE: GNS) , a leading global animal genetics company,
publishes the following trading update for the period from 1 July
2022 to 22 November 2022, to coincide with its AGM at 11:00am GMT
this morning.
In the period under review Genus saw good trading in the porcine
business, with strength and market share gains in North America and
improved trading in China, whilst the bovine business faced more
challenging market conditions particularly in LATAM and EMEA.
In the four months to 31 October 2022, PIC's volumes and revenue
were higher than the prior year. Royalty revenue achieved strong
growth, including in China. Since September the Chinese porcine
market has continued to recover with the live pig price remaining
above 22 RMB/kg and currently being approximately 24 RMB/kg. At
current prices, producers are profitable, and we anticipate this
should lead to improved confidence for producers to replace and
rebuild sow herds over time. However, COVID restrictions in China
present continuing challenges for businesses and consumers,
impacting demand for pork. The investments made in PIC China's
supply chain will support demand for PIC's elite genetics as the
market recovers and further growth of large-scale producers
continues over time.
In the period ABS's overall volumes were unchanged compared with
prior year, although revenue growth was achieved due to price
increases and changes in product mix. Sexed and beef volumes
continued to grow, while conventional dairy volume declined
markedly. Volume growth was impacted by weaker market conditions,
principally in LATAM and EMEA. In LATAM producers experienced
inflationary cost pressures and reduced their demand for dairy and
beef genetics, particularly in Brazil. EMEA similarly saw reduced
demand in certain distributor markets. ABS's profitability was
lower in the period, impacted by higher costs including travel, in
particular fuel costs, and manufacturing costs per unit arising
from lower production volume levels.
Genus continued to make good progress towards its strategic
objectives with an increase in R&D investments as planned,
supporting the long-term growth prospects of the Group. As
expected, finance costs were higher due to higher debt year on year
and the rise in interest rates, while foreign exchange translation
was a benefit to performance due to weaker sterling.
As expected, there was a seasonal net cash outflow in the
period, while n et debt of the Group at the end of October 2022 was
higher due to US dollar denominated debt being translated at a
weaker sterling exchange rate.
Outlook
While market conditions in bovine have been challenging, porcine
has performed well in the first four months. Pig prices in China
remained at a profitable level for producers, which we anticipate
will lead to improved demand for porcine genetics in the second
half of financial year 2023. Although COVID restrictions in China
continue to be a headwind to a recovery in demand, PIC China
remains well positioned to capture the growth opportunity as it
develops.
The benefit of favourable exchange rates is expected to be
largely offset by higher interest costs in the year.
Overall, the Group's profit before tax is currently anticipated
to be in line with the Board's expectations for the financial year
2023, albeit with performance weighted to the second half. The
Board remains confident in the Group's strategy and the many
opportunities ahead for Genus.
For further information please contact:
Genus plc Tel: 01256 345970
Stephen Wilson, Chief Executive Officer
Alison Henriksen, Chief Financial Officer
Buchanan Tel: 0207 466 5000
Charles Ryland /Chris Lane/Verity Parker
This announcement is available on the Genus website
www.genusplc.com
About Genus
Genus creates advances to animal breeding and genetic
improvement by applying biotechnology and sells added value
products for livestock farming and food producers. Its technology
is applicable across livestock species and is currently
commercialised by Genus in the dairy, beef and pork food production
sectors.
Genus' worldwide sales are made in over seventy-five 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 use these to supply the global dairy and meat supply
chains.
The Group's competitive edge has been created from the ownership
and control of proprietary lines of breeding animals, the
biotechnology used to improve them and its global supply chain,
technical service and sales and distribution network.
With headquarters in Basingstoke, United Kingdom, Genus
companies operate in over twenty-five countries on six continents,
with research laboratories located in Madison, Wisconsin, USA.
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