REG - Genus - INTERIM RESULTS <Origin Href="QuoteRef">GENS.L</Origin> - Part 2
23/02/2016 07:13
- Part 2: For the preceding part double click ID:nRSW7986Pa
Profit for the period - - - - 39.9 39.9 0.6 40.5
Total comprehensive income for the period - - - 2.0 33.0 35.0 0.3 35.3
Recognition of share-based payments, net of tax - - - - 2.2 2.2 - 2.2
Adjustment arising from change in non-controlling interest and written put option - - - - - - (6.6) (6.6)
Dividends 8 - - - - (11.1) (11.1) - (11.1)
Balance at 30 June 2015 6.1 112.2 (0.1) (10.1) 202.7 310.8 (5.7) 305.1
Foreign exchange translation differences, net of tax - - - 13.1 - 13.1 1.1 14.2
Fair value movement on net investment hedges, net of tax - - - (4.0) - (4.0) - (4.0)
Actuarial loss on retirement benefit obligations, net of tax - - - - (5.5) (5.5) - (5.5)
Other comprehensive income/(expense) for the period - - - 9.1 (5.5) 3.6 1.1 4.7
Profit for the period - - - - 10.6 10.6 0.4 11.0
Total comprehensive income for the period - - - 9.1 5.1 14.2 1.5 15.7
Recognition of share-based payments, net of tax - - - - 1.0 1.0 - 1.0
Issue of ordinary shares - 0.1 - - - 0.1 - 0.1
Adjustment arising from change in non-controlling interest and written put option - - - - - - (0.8) (0.8)
Dividends 8 - - - - (8.1) (8.1) - (8.1)
Balance at 31 December 2015 6.1 112.3 (0.1) (1.0) 200.7 318.0 (5.0) 313.0
Called up Share premium account Own shares Translation reserve Retained earnings Total Non-controlling interest Total equity
share
capital
£m £m £m £m £m £m £m £m
Note
Balance at 1 July 2014 6.1 112.2 (0.1) (12.1) 178.6 284.7 0.6 285.3
Foreign exchange translation differences, net of tax - - - 19.1 - 19.1 - 19.1
Fair value movement on net investment hedges, net of tax - - - (5.4) - (5.4) - (5.4)
Actuarial loss on retirement benefit obligations, net of tax - - - - (16.8) (16.8) - (16.8)
Other comprehensive income/(expense) for the period - - - 13.7 (16.8) (3.1) - (3.1)
Profit for the period - - - - 20.0 20.0 - 20.0
Total comprehensive income for the period - - - 13.7 3.2 16.9 - 16.9
Recognition of share-based payments, net of tax - - - - 0.7 0.7 - 0.7
Dividends 8 - - - - (7.4) (7.4) - (7.4)
Balance at 31 December 2014 6.1 112.2 (0.1) 1.6 175.1 294.9 0.6 295.5
GENUS PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 December 2015
Note 31 December 31 December 30 June
2015 2014 2015
£m £m £m
Assets
Goodwill 9 75.1 76.0 73.9
Other intangible assets 9 71.4 68.6 69.8
Biological assets 10 252.9 237.7 242.7
Property, plant and equipment 53.2 47.8 50.3
Interests in joint ventures and associates 11 23.2 23.3 19.6
Available for sale investments 0.2 0.1 0.2
Deferred tax assets 8.5 9.7 7.8
Total non-current assets 484.5 463.2 464.3
Inventories 33.9 32.4 32.2
Biological assets 10 51.4 44.7 50.2
Trade and other receivables 73.2 77.0 74.7
Cash and cash equivalents 27.0 23.8 21.3
Income tax receivable 0.1 0.5 0.4
Derivative financial assets 17 0.1 - 0.7
Asset held for sale - 0.8 0.5
Total current assets 185.7 179.2 180.0
Total assets 670.2 642.4 644.3
Liabilities
Trade and other payables (51.6) (60.1) (58.9)
Interest-bearing loans and borrowings (11.5) (10.6) (12.2)
Provisions (2.9) (1.0) (2.4)
Obligations under finance leases (1.1) (1.1) (1.1)
Current tax liabilities (3.2) (6.6) (6.3)
Derivative financial liabilities 17 (0.3) (0.3) (0.2)
Total current liabilities (70.6) (79.7) (81.1)
Note 31 December 31 December 30 June
2015 2014 2015
£m £m £m
Interest-bearing loans and borrowings (100.2) (83.3) (77.4)
Retirement benefit obligations 15 (67.7) (77.6) (63.1)
Deferred tax liabilities (108.0) (104.3) (105.2)
Derivative financial liabilities 17 (8.3) - (10.0)
Obligations under finance leases (2.4) (2.0) (2.4)
Total non-current liabilities (286.6) (267.2) (258.1)
Total liabilities (357.2) (346.9) (339.2)
Net assets 313.0 295.5 305.1
Equity
Called up share capital 6.1 6.1 6.1
Share premium account 112.3 112.2 112.2
Own shares (0.1) (0.1) (0.1)
Translation reserve (1.0) 1.6 (10.1)
Retained earnings 200.7 175.1 202.7
Equity attributable to owners of the Company 318.0 294.9 310.8
Non-controlling interest 3.3 0.6 4.3
Put option over non-controlling interest (8.3) - (10.0)
Total equity 313.0 295.5 305.1
GENUS PLC
GROUP STATEMENT OF CASH FLOWS
For the six months ended 31 December 2015
Note Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
£m £m £m
Net cash flow from operating activities 14 5.6 19.6 34.8
Cash flows from investing activities
Dividends received from joint ventures and associates - - 2.3
Acquisition of subsidiaries - (5.8) (10.3)
Acquisition of investment in joint venture (0.2) (0.2) (0.8)
Disposal of subsidiary 0.3 - -
Purchase of property, plant and equipment (4.7) (6.7) (12.0)
Purchase of intangible assets (2.9) (1.1) (2.8)
Proceeds from sale of property, plant and equipment 0.1 0.7 0.3
Proceeds from sale of assets held for sale 0.7 - -
Net cash outflow from investing activities (6.7) (13.1) (23.3)
Cash flows from financing activities
Drawdown of borrowings 36.0 26.3 51.8
Repayment of borrowings (18.6) (20.0) (51.0)
Payment of finance lease liabilities (0.8) (0.6) (1.5)
Equity dividends paid (8.1) (7.4) (11.1)
Dividend to non-controlling interest (0.4) - -
Issue of ordinary shares 0.1 - -
Decrease in bank overdrafts (1.1) (4.0) (2.0)
Net cash inflow/(outflow) from financing activities 7.1 (5.7) (13.8)
Net increase/(decrease) in cash and cash equivalents 6.0 0.8 (2.3)
Cash and cash equivalents at beginning of period 21.3 22.8 22.8
Net increase/(decrease) in cash and cash equivalents 6.0 0.8 (2.3)
Cash (released)/acquired on (disposal)/acquisition (0.2) - 1.5
Effect of exchange rate fluctuations on cash and cash equivalents (0.1) 0.2 (0.7)
Total cash and cash equivalents at end of period 27.0 23.8 21.3
GENUS PLC
ANALYSIS OF NET DEBT
For the six months ended 31 December 2015
At 1 July 2015 Net cash flows Foreign exchange Non-cash movements At 31 December 2015
£m £m £m £m £m
Cash and cash equivalents 21.3 6.0 (0.1) (0.2) 27.0
Interest-bearing loans - current (12.2) 4.9 (0.8) (3.4) (11.5)
Obligation under finance leases - current (1.1) 0.8 (0.1) (0.7) (1.1)
(13.3) 5.7 (0.9) (4.1) (12.6)
Interest-bearing loans - non-current (77.4) (21.2) (4.8) 3.2 (100.2)
Obligation under finance lease - non-current (2.4) - (0.1) 0.1 (2.4)
(79.8) (21.2) (4.9) 3.3 (102.6)
Net debt (71.8) (9.5) (5.9) (1.0) (88.2)
At 1 July 2014 Net cash flows Foreign exchange Non-cash movements At 31 December 2014
£m £m £m £m £m
Cash and cash equivalents 22.8 0.8 0.2 - 23.8
Interest-bearing loans - current (13.0) 3.6 (1.0) (0.2) (10.6)
Obligation under finance leases - current (1.1) 0.6 (0.1) (0.5) (1.1)
(14.1) 4.2 (1.1) (0.7) (11.7)
Interest-bearing loans - non-current (71.1) (5.9) (6.3) - (83.3)
Obligation under finance lease - non-current (1.5) - (0.2) (0.3) (2.0)
(72.6) (5.9) (6.5) (0.3) (85.3)
Net debt (63.9) (0.9) (7.4) (1.0) (73.2)
Net debt is defined as the total of cash and cash equivalents, interest-bearing loans, unamortised debt issue costs and
obligation under finance leases.
GENUS PLC
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the six months ended 31 December 2015
1. Basis of preparation
The unaudited Condensed Set of Financial Statements for the six months ended 31 December 2015:
· were prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34') and
thereby International Financial Reporting Standards ('IFRSs'), both as issued by the International Accounting Standards
Board ('IASB') and as adopted by the European Union ('EU');
· are presented on a condensed basis as permitted by IAS 34 and therefore do not include all disclosures that would
otherwise be required in a full set of financial statements; these should be read, therefore, in conjunction with the 2015
Annual Report;
· includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the
results for the periods presented;
· do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006; and
· were approved by the Board of Directors on 22 February 2016.
The information relating to the year ended 30 June 2015 is an extract from the published financial statements for that
year, which have been delivered to the Registrar of Companies. The auditor's report on those financial statements was not
qualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The unaudited Condensed Set of Financial Statements for the six months ended 31 December 2015 has not been reviewed by our
Auditor.
The Genus plc Annual Report 2015 (a copy of which is available on the Genus plc website at www.genusplc.com) sets out on
pages 18-19 a number of risks and uncertainties that might impact upon the performance of the Group. There has been no
material change to the principal risks that might affect the performance of the Group in the current financial year. Having
considered these risks and uncertainties, and in the current economic environment, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
Therefore they continue to adopt the going concern basis in preparing the half-yearly report and the Condensed Set of
Financial Statements.
The preparation of the Condensed Set of Financial Statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance
sheet date, and the reported amounts of revenue and expenses during the period. Actual results could vary from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of
revision and future periods if the revision affects both current and future periods.
2. Accounting policies and non-GAAP measures
The same accounting policies, presentation and methods of computation are followed in the Condensed Set of Financial
Statements as applied in the Group's latest annual audited financial statements, dated 7 September 2015, which are
available on the Group's website www.genusplc.com, except as described below.
New standards and interpretations
No new standards and interpretations have been adopted in the current period.
At the date of the interim report, the following standards and interpretations which have not been applied in the report
were in issue but not yet effective (and in some cases had not yet been adopted by the EU):
· Amendments to IFRS 11 'Accounting for acquisitions of interests in Joint ventures', IAS 27 'Equity method in separate
financial statements', IAS 1 'Disclosure Initiatives', IAS 12 'Recognition of deferred tax assets for unrealised losses';
· Amendments to IFRS 10, IFRS 12 and IAS 28 'Investment entities: Applying the consolidation exception';
· Amendments to IAS 16 and IAS 38 'Clarification of acceptable method of depreciation and amortisation';
· 'Improvements to IFRS 2012 - 2014 cycle';
· IFRS 9 'Financial Instruments';
· IFRS 14 'Regulatory Deferral Response';
· IFRS 15 'Revenue from Contracts with Customers'; and
· IFRS 16 'Leases'.
The Group is currently assessing the impact of the new pronouncements on its results, financial position and cash flows.
Non-GAAP measures - adjusted operating profit, adjusted profit before tax and adjusted earnings per share
Adjusted operating profit, adjusted operating profit before tax from continuing operations and adjusted earnings per share
exclude the net valuation movement on biological assets and related financial derivative, amortisation of acquired
intangible assets, share-based payment expense, exceptional items and other gains and losses.
We believe these non-GAAP measures provide shareholders with useful information about the Group's trading performance. The
reconciliation between operating profit from continuing operations and adjusted operating profit from continuing operations
is shown on the face of the Condensed Consolidated Income Statement.
3. Foreign currencies
The principal exchange rates used were as follows:
Average Closing
Six months ended 31 December 2015 Six months ended 31 December2014 Yearended30 June2015 31 December 2015 31 December2014 30 June2015
US Dollar/£ 1.52 1.62 1.57 1.47 1.56 1.57
Euro/£ 1.39 1.27 1.32 1.36 1.29 1.41
Brazilian Real/£ 5.78 3.94 4.26 5.90 4.14 4.89
Mexican Peso/£ 25.41 22.03 22.68 25.46 22.98 24.68
The assets and liabilities of foreign operations, including goodwill arising on consolidation, are translated into Sterling
at the prevailing exchange rates at the balance sheet date. We translate these operations' revenues and expenses using an
average rate for the period.
4. Segmental information
The Group presents its segmental information on the basis that the chief operating decision maker regularly reviews for
assessing our business performance and allocating resources.
Our business is not highly seasonal and our customer base is diversified, with no individual customer generating more than
2% of revenue.
Revenue
Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
£m £m £m
Genus PIC 84.4 86.1 175.5
Genus ABS 77.6 82.3 167.8
Genus Asia 22.2 20.9 41.4
Research and Development
Research - - -
Porcine Product Development 4.1 9.2 13.8
Bovine Product Development - - -
4.1 9.2 13.8
188.3 198.5 398.5
Operating profit by segment is set out below and reconciled to the Group's adjusted operating profit.
A reconciliation of adjusted operating profit to profit for the period is shown on the Condensed Consolidated Income
Statement.
Operating profit
Six monthsended31 December2015 Six monthsended31 December2014 Yearended30 June2015
£m £m £m
Genus PIC 30.1 27.1 57.2
Genus ABS 9.1 12.0 24.0
Genus Asia 5.0 2.9 5.7
Research and Development
Research (2.7) (2.1) (4.6)
Porcine Product Development (6.4) (5.1) (11.6)
Bovine Product Development (6.6) (6.0) (12.4)
(15.7) (13.2) (28.6)
Segment operating profit 28.5 28.8 58.3
Central costs (4.6) (4.5) (11.1)
Adjusted operating profit 23.9 24.3 47.2
Segment assets Segment liabilities
31 December2015£m 31 December2014£m 30 June 2015£m 31 December2015£m 31 December2014£m 30 June 2015£m
Genus PIC 201.4 210.5 194.9 (47.3) (50.1) (45.5)
Genus ABS 125.3 114.5 123.7 (30.9) (32.9) (39.9)
Genus Asia 38.3 39.8 37.0 (5.7) (8.9) (7.6)
Research and Development
Research 9.8 3.9 6.0 (0.4) - (0.1)
Porcine Product Development 123.3 100.5 110.0 (51.5) (28.1) (47.6)
Bovine Product Development 166.2 165.7 167.5 (51.0) (51.4) (52.2)
299.3 270.1 283.5 (102.9) (79.5) (99.9)
Segment total 664.3 634.9 639.1 (186.8) (171.4) (192.9)
Central 5.9 7.5 5.2 (170.4) (175.5) (146.3)
Total 670.2 642.4 644.3 (357.2) (346.9) (339.2)
5. Exceptional items
Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
Operating (expenses)/income: £m £m £m
Acquisition and integration (0.1) (0.5) (1.4)
Legal fees (2.5) (1.1) (2.8)
Other (including restructuring) (0.2) - (1.3)
Pension related 0.3 0.4 0.4
(2.5) (1.2) (5.1)
Included within legal fees were £2.5m of legal fees related to an action by ABS Global Inc. against Inguran LLC (aka Sexing
Technologies).
During the period, £0.1m of expenses were incurred in relation to integration, principally of In Vitro Brasil S.A.
During the period a settlement gain of £0.3m was recorded in relation to members leaving the Milk Pension Fund.
6. Net finance costs
Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
£m £m £m
Interest payable on bank loans and overdrafts (1.1) (0.9) (1.8)
Amortisation of debt issue costs (0.2) (0.2) (0.4)
Other interest payable - - (0.1)
Net interest cost in respect of pension scheme liabilities (1.2) (1.2) (2.3)
Net interest cost on derivative financial instruments (0.1) (0.1) (0.2)
Total interest expense (2.6) (2.4) (4.8)
Interest income on bank deposits 0.1 0.1 0.2
Total interest income 0.1 0.1 0.2
Net finance costs (2.5) (2.3) (4.6)
7. Income tax expense
Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
£m £m £m
Current tax 4.6 5.0 12.6
Deferred tax (2.7) 3.6 4.7
1.9 8.6 17.3
The taxation charge for the period is based on the estimated effective tax rate on adjusted profits for the full year of
26.5% (2014: 27.1%).
The tax charge for the period on statutory profit of £1.9m (2014: £8.6m) represents a statutory tax rate of 14.7% (2014:
30.1%). The statutory tax rate for the period benefits from a 9.4% rate reduction from lower statutory profits primarily
in the USA, including reductions in the fair value of biological assets, amortisation of intangibles and exceptional legal
costs on which tax relief is available at an average rate of 32% (2014: increase in statutory tax rate of 7.5% due to net
statutory profits on movements in biological assets, intangible assets and exceptional items taxed substantially at US
rate).
There is a deferred tax liability at the period end of £108.0m (2014: £104.3m) which mainly relates to the recognition at
fair value of biological assets and intangible assets arising on acquisition and a deferred tax asset of £8.5m (2014:
£9.7m) which mainly relates to future tax deductions in respect of pension scheme liabilities, share scheme awards and
financial instruments.
8. Dividends
Six monthsended31 December2015 Six months ended31 December2014 Yearended30 June2015
Amounts recognised as distributions to equity holders in the period: £m £m £m
Final dividend for the year ended 30 June 2014 of 12.2 pence per share - 7.4 7.4
Interim dividend for the year ended 30 June 2015 of 6.1 pence per share - - 3.7
Final dividend for the year ended 30 June 2015 of 13.4 pence per share 8.1 - -
8.1 7.4 11.1
The final dividend for the year ended 30 June 2015 was approved at the Company Annual General Meeting on 19 November 2015
and paid on 4 December 2015. On 22 February 2016 the Board proposed an interim dividend of 6.7 pence per share payable on
30 March 2016.
9. Intangible assets
Technology Multiplier contracts Customer relationships Separately identified acquired intangible assets Software Genus sexed semen andother Total Goodwill
£m £m £m £m £m £m £m £m
Cost
Balance at 1 July 2014 42.7 3.5 51.4 97.6 6.5 8.2 112.3 69.9
Additions - - - - - 2.8 2.8 -
Disposals - - - - - (0.2) (0.2) -
Acquisition 3.5 - 4.1 7.6 - - 7.6 5.3
Effect of movements in exchange rates (0.1) - 2.5 2.4 0.1 0.6 3.1 (1.3)
Balance at 30 June 2015 46.1 3.5 58.0 107.6 6.6 11.4 125.6 73.9
Additions - - - - - 2.9 2.9 -
Effect of movements in exchange rates (0.4) 0.2 2.9 2.7 0.1 0.7 3.5 1.2
Balance at 31 December 2015 45.7 3.7 60.9 110.3 6.7 15.0 132.0 75.1
Amortisation and impairment losses
Balance at 1 July 2014 17.5 1.7 24.9 44.1 3.8 - 47.9 -
Amortisation for the year 2.3 0.2 3.6 6.1 0.6 - 6.7 -
Effect of movements in exchange rates - - 1.1 1.1 0.1 - 1.2 -
Balance at 30 June 2015 19.8 1.9 29.6 51.3 4.5 - 55.8 -
Amortisation for the period 1.2 0.2 1.6 3.0 0.3 - 3.3 -
Effect of movements in exchange rates - 0.1 1.2 1.3 0.2 - 1.5 -
Balance at 31 December 2015 21.0 2.2 32.4 55.6 5.0 - 60.6 -
Carrying amounts
At 31 December 2015 24.7 1.5 28.5 54.7 1.7 15.0 71.4 75.1
At 30 June 2015 26.3 1.6 28.4 56.3 2.1 11.4 69.8 73.9
At 30 June 2014 25.2 1.8 26.5 53.5 2.7 8.2 64.4 69.9
Additions in the period to intangible assets of £2.6m relates to costs capitalised in respect of a Genus Sexed Semen (GSS)
development project.
Included above is £14.4m of capitalised development expenses in respect of GSS, and in addition there is also £5.6m
included within fixed assets relating to GSS.
10. Biological assets
Fair value of biological assets Bovine Porcine Total
£m £m £m
Balance at 1 July 2015 144.8 148.1 292.9
Increases due to purchases 3.4 64.4 67.8
Decreases attributable to sales - (79.1) (79.1)
Decrease due to harvest (16.2) (8.9) (25.1)
Changes in fair value less estimated sale costs 1.1 30.2 31.3
Effect of movements in exchange rates 8.4 8.1 16.5
Balance at 31 December 2015 141.5 162.8 304.3
Non-current biological assets 141.5 111.4 252.9
Current biological assets - 51.4 51.4
Balance at 31 December 2015 141.5 162.8 304.3
Balance at 1 July 2014 128.6 124.4 253.0
Increases due to purchases 3.0 58.6 61.6
Decreases attributable to sales - (79.5) (79.5)
Decrease due to harvest (16.6) (6.1) (22.7)
Changes in fair value less estimated sale costs 16.9 30.7 47.6
Effect of movements in exchange rates 10.9 11.5 22.4
Balance at 31 December 2014 142.8 139.6 282.4
Non-current biological assets 142.8 94.9 237.7
Current biological assets - 44.7 44.7
Balance at 31 December 2014 142.8 139.6 282.4
Balance at 1 July 2014 128.6 124.4 253.0
Increases due to purchases 6.9 119.6 126.5
Decreases attributable to sales - (166.3) (166.3)
Decrease due
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