3rd Sep 2013 08:04
LONDON (Alliance News) - Genus PLC Tuesday reported lower profits for its last financial year as its biological assets were given a lower valuation, but revenues and profits excluding the revaluation rose, driven by growth in Asia which helped offset the impact of higher feed costs.
The animal genetics company, which uses genetic techniques to boost the health and productivity of beef and dairy cattle and pigs, said pretax profit fell to GBP38.1 million in the year to end-June, from GBP54.4 million a year earlier as its biological assets were given a lower valuation under accounting rules, compared with a credit last year.
Excluding the valuation of those assets, its pretax profit rose to GBP47.2 million, from GBP46.5 million as revenues increased to GBP345.3 million, from GBP341.8 million. It raised its full-year dividend 10% to 16.1 pence, from 14.6 pence, a move it said signalled its confidence.
The revenue increase was led by 15% growth in Asia, although a shift towards high-margin products in its porcine business reduced revenues by 3%.
It said cash inflow of GBP8.1 million reduced its net debt to GBP52.9 million by the end of the year.
"We expect to make further progress in the year ahead and anticipate an improving rate of growth from the second half of 2014 fiscal year onwards," the company said.
However, the company shares were down heavily early Tuesday. The stock was down 9% at 1,348 pence, leading the FTSE 250 decliners, with Shore Capital blaming profit taking after a recent run up that the broker thinks made the shares overvalued. It is maintaining a sell rating on the stock.
Shore thinks the company's profitability will improve because a better northern hemisphere harvest should bring down feed costs.
By Steve McGrath; [email protected]; @SteveMcGrath1
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