Interim Management Statement

RNS Number : 5284D

Genus PLC

30 April 2013

 



For Immediate Release                                                           30 April 2013

GENUS plc

("Genus" or "the Company")

Interim Management Statement

Genus, a leading global animal genetics company, today publishes its interim management statement for the period from 1 January 2013.

Market conditions for Genus' bovine and porcine customers have continued to be challenging, with pressure on their profitability from input and output prices.  In the period under review, overall demand for Genus' products and services showed double digit growth in porcine volumes driven by Asia, whilst bovine volumes were slightly lower compared with the prior year.

Genus' results for the first nine months are in line with last year's record performance, with revenue flat and profit before tax 1% lower in constant currency, despite the impact of higher feed costs and significant investments being made in the business to lay the foundations for future growth.  Results in actual currency were slightly higher in the period than constant currency due to sterling being weaker than a year ago, partially mitigating the currency drag from the first half.

Genus expects to end the year with low single digit percentage growth in profit before tax in constant currency.

Current Trading

In Genus PIC, Latin America continued its strong performance with double digit profit growth driven by a higher mix of royalty business. The North American performance was impacted by lower volumes of animal shipments to customers with their expansion plans put on hold due to low industry profitability.  In Europe, PIC was broadly consistent with the prior year and is making continued progress with the restructuring of this business.  Profits in Genus PIC for the first nine months were up 4% in constant currency.

Volumes at Genus ABS declined in the period, with difficult market conditions, caused by high feed costs, and low milk prices in key markets such as the US and parts of Latin America.  Although volume performance was under pressure, ABS maintained blend prices and costs were tightly managed.  Overall results in the period were stable in Europe, but lower in the Americas.  Profits in Genus ABS for the first nine months were 6% lower in constant currency.

Genus Asia experienced very strong growth in its porcine business, more than doubling volumes and profits in the period.  China was a very strong market for the Company's genetics but growth was also robust in the Philippines where the business model is being tailored to align with Genus global best practices.  In the bovine business, volumes grew driven by local semen in India, however revenue and profits declined in the period as Australia remained a difficult market.  Profits in Genus Asia for the first nine months were up 21% in constant currency.

Research and Development spending grew as expected by 13% in constant currency in the first nine months as investment continued in Genus' research priorities and on-going higher feed costs were incurred in the porcine genetic nucleus farms.

Financial Position

Net debt at the end of March was at a similar level to 31 December 2012 and below the level at the same time last year despite an adverse exchange rate translation of the Company's dollar denominated borrowings.

Strategy Update

In the period under review, Genus has continued to invest in the implementation of its strategy and has made further progress in building its capabilities in many areas of the business.

China is a key target market and in January a new 100% Genus nucleus farm of 1,000 sows capacity was stocked with the latest genetics from North America to increase supply capacity and reduce genetic lag.  A site for the Shennong joint venture farm has been identified which, when built, will be stocked from the new nucleus farm.  The Besun joint venture farm has continued to perform well and discussions continue with a number of further potential partners.

To increase product differentiation in the bovine business the first proprietary bull ranking index based on high volume proprietary phenotypic data from multiple countries has been released, trademarked Real World Data. Genus plans to continue investing in proprietary data and indices across the dairy, beef and porcine markets.

Genus has also continued to strengthen its teams around the world in disciplines such as technical services, supply chain and key account management.

For further information please contact:

Genus plc	Tel: [phone]
Karim Bitar, Chief Executive
Stephen Wilson, Group Finance Director
Buchanan	Tel: [phone]
Charles Ryland /Sophie McNulty

This announcement is available on the Genus website www.genusplc.com

 About Genus

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

Genus' worldwide sales are made in seventy countries under the trademarks "ABS" (dairy and beef cattle) and "PIC" (pigs) and comprise semen and breeding animals with superior genetics to those animals currently in production. Genus' customers' animals produce offspring with greater production efficiency, and quality, and use these to supply the global dairy and meat supply chain.

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

With headquarters in Basingstoke, United Kingdom, Genus companies operate in thirty countries on six continents, with research laboratories located in Madison, Wisconsin, USA.

 

END

 

 

IMSSEMFMUFDSEIL