Genus plc Preliminary Results for the Year Ended 30 June 2024
STRUCTURALLY STRENGTHENING GENUS IN A CHALLENGING YEAR
WEBCAST AVAILABLE AT 7:01AM GMT, 2.01 EST
LONDON--(BUSINESS WIRE)--September 05, 2024--
Genus (LSE:GNS), a leading global animal genetics company, today announces its preliminary results for the year ended 30 June 2024. The full report has been made available on the investors section of the Genus plc website. The Company will discuss its corporate, operational and financial highlights in a pre-recorded webcast at 7:01 AM GMT, 2.01 EST.
Commenting on the performance and outlook, Jorgen Kokke, Chief Executive Officer, said:
"Genus made significant progress against its strategic priorities during FY24. I am confident that our decisive actions to structurally strengthen the Group will yield significant benefits in the years to come.
In FY25, we will continue to execute against our strategic priorities and we expect to achieve significant growth in Group adjusted profit before tax in constant currency, in-line with market expectations. However, Sterling has continued to appreciate against key foreign currencies since our trading update on 17 July 2024, and we now expect a currency headwind of approximately GBP8-9m in FY25, if current exchange rates continue throughout the fiscal year."
Outlook
-- Market conditions stable to slowly improving although we remain
cautious, particularly in China
-- Solid adjusted operating profit growth expected from PIC in constant
currency
-- ABS expected to return to adjusted operating profit growth in constant
currency, a stronger business with actions from VAP
-- Management expects significant growth in FY25 Group adjusted profit
before tax in constant currency, in-line with current market
expectations
-- Currency headwind of approximately GBP8-9m in FY25 if current exchange
rates continue throughout the fiscal year
Results presentation and live Q&A session today
A pre-recorded investors, analysts and bankers briefing to discuss the preliminary results for the year ended 30 June 2024 will be accessible via the following link from 7:01am UK time today:
https://webcasting.buchanan.uk.com/broadcast/66b0dea408f685532e0148c7
This will be followed by at 10.30 UKT time by a live Q&A session by invitation at Peel Hunt, 100 Liverpool Street, EC2M 2AT. Those unable to attend in person can also join via Zoom. Please contact Verity Parker at Buchanan for details: verity.parker@buchanancomms.co.uk
Results Highlights
Adjusted results(1) Statutory results
----------------------------------- ---------------------
Constant
currency
Actual currency change(2) Actual currency
-------------------- ------------- ---------------------
Year ended 30
June 2024 2023 Change 2024 2023 Change
----- ----- ------ ------------- ------ ----- ------
GBPm GBPm % % GBPm GBPm %
Revenue 668.8 689.7 (3) 2 668.8 689.7 (3)
Operating
profit 67.0 74.6 (10) (3) 6.4 40.5 (84)
Operating
profit inc
JVs 78.1 85.8 (9) (3) n/a n/a n/a
Profit before
tax 59.8 71.5 (16) (8) 5.5 39.4 (86)
Net cash
flows from
operating
activities 55.1 45.9 20 n/m(5) 29.8 50.4 (41)
Free cash
flow(6) (3.2) 9.1 n/m(5) n/m(5)
Basic
earnings per
share
(pence) 65.5 84.8 (23) (15) 12.0 50.8 (76)
Dividend per
share
(pence) 32.0 32.0 -
-------------- ----- ----- ------ ------------- ------ ----- ------
Strategic progress achieved despite challenging markets
-- Management actions limited the impact on adjusted operating profit in a
difficult year for volumes:
-- ABS Value Acceleration Programme ("VAP") initiated to
structurally improve Bovine's margins, cash generation and returns
profile; Phase 1 delivered GBP7.3m of adjusted operating profit
benefit in FY24 (GBP10m annualised benefit); Phase 2 underway and
expected to deliver GBP5m of adjusted operating profit benefit in
FY25 (GBP10m annualised)
-- R&D strategic review completed, resulting in a sharper focus on
key workstreams and savings of GBP2.4m realised in FY24 (GBP5m of
annualised adjusted operating profit benefit in FY25)
-- Exceptional restructuring costs related to management actions of
GBP6.7m in FY24
-- Encouraging regulatory progress on the PRRS3 Resistant Pig ("PRP"):
-- Favourable regulatory determinations from Brazil (April 2024)
and Colombia (October 2023)
-- Continuing positive engagement with the US FDA4, with approval
expected in 2025
-- Initial submissions to Canadian and Japanese authorities made,
as planned
-- PIC PRPs arriving in China imminently for in-country testing
Financial performance as expected, with structural changes driving stronger performance in the second half
-- Second half adjusted operating profit including JVs of GBP40.0m, 15%
higher year on year in constant currency, with GBP9.4m of benefit from
management actions. Compares with first half adjusted operating profit
including JVs of GBP38.1m, 17% lower year on year in constant currency
-- Adjusted operating profit including JVs 3%2 lower in constant currency
(9% lower in actual currency). Good PIC ex-China growth and the
realisation of benefits across ABS and R&D were offset by poor China
performances and ABS volume trends
-- Adjusted profit before tax $(PBT)$ of GBP59.8m, 8%2 lower in constant
currency (16% lower in actual currency). Statutory PBT of GBP5.5m, 86%
lower in actual currency, primarily due to a GBP8.6m decrease in the
non-cash fair value IAS41 valuation of Group biological assets (including
JV's) and net exceptional expenses of GBP24.6m8 (2023: GBP3.5m net
expense)
-- New cash conversion1 metric introduced which includes investments in
biological assets, capital expenditure, lease repayments and cash
received from JVs; 71% achieved in FY24 (2023: 53%)
-- Net Debt1 increased to GBP248.7m with a net debt to adjusted EBITDA1
ratio of 2.0x, as expected, within our target range of 1.0x to 2.0x
Divisional headlines(7)
-- PIC -- Resilient growth ex-China, in a difficult market PIC China
doubled its royalty customer numbers:
-- Continued genetic improvement, delivering $4.39/pig of genetic
profit gain (2023: $3.74/pig)
-- PIC volumes increased 3%, revenue decreased 1%2 and
strategically important royalty revenue increased 4%2, in constant
currency
-- PIC trading regions ex-China adjusted operating profit increased
4%2 in constant currency
-- PIC China adjusted operating profit decreased 60%2 in constant
currency due to the challenging market environment and planned
supply chain investments; good commercial progress -- 13 new
royalty customers won since June 2023
-- ABS -- Challenging markets, particularly China; VAP delivering
structural improvements and significant cost efficiencies:
-- Volumes decreased 6% (ABS ex-China volumes decreased 1%) with
sexed volumes up 3%, beef volumes decreased 6%
-- Revenue increased 4%2 in constant currency as price actions, mix
and IntelliGen growth offset volume declines
-- Adjusted operating profit decreased 3%2 in constant currency
mitigated by VAP actions
-- VAP Phase 1 achieved GBP10m run-rate of annualised adjusted
operating profit improvement by the end of FY24; Phase 2 underway
and expected to deliver GBP5m of savings in FY25 (GBP10m
annualised)
(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 statutory measures, and not as a substitute for or
as superior to them.
(2) Constant currency percentage movements are calculated by representing the
results for the year ended 30 June 2024 at the average exchange rates applied
to adjusted operating profit for the year ended 30 June 2023
(3) Porcine Reproductive and Respiratory Syndrome
(4) United States Food and Drug Administration
(5) n/m = not meaningful
(6) Free cash flow definition has changed this year to include lease
repayments, the 2023 comparative has also been restated
(7) Prior year period restated.
(8) Net exceptional expenses of GBP24.6m predominantly comprised GBP10.4m
related to ST litigation and settlements, GBP6.7m related to restructuring
activity and GBP7.4m related to a number of potential corporate transactions
which are no longer active
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.
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