REG - Genus - AGM Trading Update

GenusAnnouncement

24/11/2021 07:00

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RNS Number : 3286T  Genus PLC  24 November 2021

 

 
 

Immediate release
 
                24 November 2021

Genus plc

('Genus' or the 'Group')

 

AGM TRADING UPDATE

 

Genus (LSE: GNS), a leading global animal genetics company, publishes the
following trading update for the period from 1 July 2021 to 23 November 2021,
to coincide with its AGM at 11:00am GMT this morning.

As anticipated in the Preliminary Results announcement in September, trading
in the period under review in both Genus's bovine and porcine businesses made
continued progress and the Group met profit expectations except in PIC China,
which continues to face challenging market conditions.  Net debt of the Group
at the end of October 2021 was in line with expectations.  Additionally,
Genus continued to make good progress towards its strategic objectives with
significant investments in R&D and capital projects supporting the
long-term growth of the Group as planned.

In the four months to 31 October 2021, PIC's volumes were lower than the prior
year due to the downturn in China, while royalty revenues showed continued
growth, and PIC achieved revenue growth overall.   In the period ABS also
achieved continued volume and revenue growth.

Since September there has been significant volatility in the Chinese porcine
market, with the live pig price falling from 20 RMB/kg to a low of 10 RMB/kg
in early October and it is currently approximately 17 RMB/kg.  At these
prices producers have been unprofitable, and consequently have sought to
reduce their sow inventory.  PIC China's customers have postponed stocking
orders and reduced their sow herd numbers significantly.  We anticipate this
inventory will need to be replaced when the market recovers and believe the
current market circumstances will accelerate further the consolidation of
production over time, increasing the medium and long-term opportunity for
PIC's elite genetics.

Outlook

Whilst pig prices have improved in China in the past month, prices need to
improve further and be sustained for producer confidence to return and lead to
improved demand for porcine genetics. Looking to FY23 the Group remains
positive as to the medium-term growth prospects of PIC China and is continuing
to invest in the local supply chain to be well positioned to capture this
growth opportunity.

Based on the first four month's trading trends in PIC China and its latest
interactions with its customers, the Board currently anticipates that the
Group's profit before tax is likely to be moderately lower than its previous
expectation for the financial year 2022.  However, we remain confident in the
Group's strategy and the many opportunities for Genus.

 

 

For further information please contact:

 Genus plc                                  Tel: 01256 345970
 Stephen Wilson, Chief Executive Officer
 Alison Henriksen, Chief Financial Officer
 Buchanan                                   Tel: 0207 466 5000
 Charles Ryland /Chris Lane/Vicky Hayns

This announcement is available on the Genus website www.genusplc.com
(http://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 livestock species and is
currently commercialised by Genus in the dairy, beef and pork food production
sectors.

 

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

 

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
over twenty-five countries on six continents, with research laboratories
located in Madison, Wisconsin, USA.

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