- Full year revenue up 10%
- Pre-tax profit flat reflecting higher interest charges and investments
- 2024 growth outlook tempered by higher finance costs and FX headwinds
Despite delivering 10% annual revenue growth, animal genetics company Genus (GNS) reported flat adjusted pre-tax profit for the year to 30 June 2023 reflecting higher interest expenses and increased investments in gene editing.
Looking forward to fiscal 2024, the company said based on recent strengthening of sterling against certain key currencies and higher interest rates, it anticipates ‘modest’ growth in actual adjusted pre-tax profit.
Foreign exchange headwinds and highest interest charges are expected to amount to around £8 million.
Incoming CEO Jorgen Kokke, who joined the business in May 2023, was given the cold shoulder by investors with the shares dropping 5% to £21.20, taking losses for the current year to 30% and leaving shares in Genus well shy of all-time highs of around £60 reached two years ago.
WHAT DID THE CEO SAY?
Kokke commented: ‘The group achieved a strong operational performance despite ongoing challenging market conditions for producers in several important markets. Revenues grew in all regions and both PIC (pig) and ABS (cow) delivered profit growth.
‘This also enabled us to deliver record adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) and good cashflow for the group.’
Revenue increased 16% to £689.7 million while in constant currency growth was 10%. Adjusted operating profit including joint ventures was up 10% in actual currencies and 3% in constant currency.
The company ploughed an extra 66% into gene editing research and expenditures in preparation of the commercial launch of pigs resistant to PRRSv (porcine reproductive and respiratory syndrome virus).
US food and drug administration approval is expected in the first half of 2024 with approvals for other markets progressing including China, where Genus has consent to import PRRSv pigs for in-country assessment.
Higher interest rates pushed up net finance expenses to £14.3 million from £6.2 million in 2022 as average interest rates more than doubled to 4.94%.
The company ended the period with net debt of £195.8 million representing 1.6 times EBITDA, down slightly from 1.7 times last year.
The final dividend was maintained at 21.7p per share taking the full year dividend per share to 32p, unchanged from 2022.
LEARN MORE ABOUT GENUS
Issue Date: 07 Sep 2023
