8th Sep 2022 08:41
(Alliance News) - Genus PLC on Thursday reported a fall in full-year profit but shares were lifted on hopes of improving pig prices in China.
Shares in Genus were up 6.8% at 2,560.00 pence in London early Thursday, placing the stock at the top of the FTSE 250 index in morning dealings.
Revenue in the financial year ended June 30 rose 3% to GBP593.4 million from GBP574.3 million the year before.
However, pretax profit for the year fell 13% to GBP48.4 million from GBP55.8 million.
The Basingstoke, Hampshire-based producer of biotechnology products for cattle and pig farmers reported a "robust performance across the business", but said its results were hit by PIC China, its porcine sales business in the region. Adjusted operating profit for the unit declined by 13%
PIC China saw challenging market conditions in the year, with China pig prices averaging RMB14.6 per kilo, down 50% on the year before.
Positively, however, these prices have now recovered to over RMB21 per kilo, exceeding the cost of production for most producers.
This is "improving confidence that the country's porcine industry is on the path to recovery and profitability," said Chief Executive Stephen Wilson.
"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," Wilson continued. "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."
Outside of PIC China, it reported a good performance in ABS, its bovine sales business, with the unit posting adjusted operating profit growth of 9%.
Genus's dividend for the year was held at 32.0p.
By Lucy Heming; [email protected]
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