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- - 1.9 - 1.9 - 1.9
Actuarial gain on retirement benefit obligations, net of tax - - - - - 0.7 0.7 - 0.7
Movement on pension asset recognition restriction, net of tax - - - - - (2.7) (2.7) - (2.7)
Release of additional pension liability, net of tax - - - - - 1.3 1.3 - 1.3
Other comprehensive income/(expense) for the period - - - 23.3 1.9 (0.7) 24.5 - 24.5
Profit for the period - - - - - 8.1 8.1 0.7 8.8
Total comprehensiveincome for the period - - - 23.3 1.9 7.4 32.6 0.7 33.3
Recognition of share-based payments, net of tax - - - - - 1.3 1.3 - 1.3
Adjustment arising from change in non-controlling interest and written put option - - - - - - - 2.2 2.2
Dividends 8 - - - - - (9.0) (9.0) - (9.0)
Issue of ordinary shares - 0.1 - - - - 0.1 - 0.1
BALANCE AT 31 DECEMBER 2016 6.1 112.4 (0.1) 60.8 1.3 219.0 399.5 (3.5) 396.0
Note Called up share capital£m Share premium account£m Own shares£m Trans-lation reserve£m Hedging reserve£m Retained earnings£m Total£m Non- controlling interest£m Total equity£m
BALANCE AT 30 JUNE 2015 6.1 112.2 (0.1) (10.1) - 202.7 310.8 (5.7) 305.1
Foreign exchange translationdifferences, 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)
Movement on pension asset recognition restriction, net of tax - - - - - - - - -
Recognition of additional pension liability, net of tax - - - - - - - - -
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 comprehensiveincome 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
Adjustment arising from change in non-controlling interest - - - - - - - (0.8) (0.8)
Dividends 8 - - - - - (8.1) (8.1) - (8.1)
Issue of ordinary shares - 0.1 - - - - 0.1 - 0.1
BALANCE AT 31 DECEMBER 2015 6.1 112.3 (0.1) (1.0) - 200.7 318.0 (5.0) 313.0
GENUS PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 December 2016
Notes 31 December 31 December 30 June
2016 2015 2016
£m £m £m
Assets
Goodwill 9 96.7 75.1 86.0
Other intangible assets 9 87.0 71.4 78.0
Biological assets 10 289.7 252.9 264.6
Property, plant and equipment 67.4 53.2 61.8
Interests in joint ventures and associates 11 26.8 23.2 24.3
Available for sale investments 3.9 0.2 3.6
Derivative financial assets 17 1.6 - -
Deferred tax assets 5.5 8.5 4.7
Total non-current assets 578.6 484.5 523.0
Inventories 39.8 33.9 35.7
Biological assets 10 70.6 51.4 66.4
Trade and other receivables 83.2 73.2 78.1
Cash and cash equivalents 37.0 27.0 34.0
Income tax receivable 1.2 0.1 1.0
Derivative financial assets 17 0.3 0.1 0.6
Asset held for sale 0.3 - 0.3
Total current assets 232.4 185.7 216.1
Total assets 811.0 670.2 739.1
Liabilities
Trade and other payables (71.5) (51.6) (65.1)
Interest-bearing loans and borrowings (2.4) (11.5) (4.6)
Provisions (0.9) (2.9) (1.2)
Obligations under finance leases (2.0) (1.1) (1.1)
Current tax liabilities (5.2) (3.2) (4.9)
Derivative financial liabilities 17 (0.4) (0.3) (0.5)
Total current liabilities (82.4) (70.6) (77.4)
Notes 31 December 31 December 30 June
2016 2015 2016
£m £m £m
Interest-bearing loans and borrowings (140.0) (100.2) (115.3)
Retirement benefit obligations 15 (43.3) (67.7) (44.5)
Deferred tax liabilities (132.5) (108.0) (118.5)
Derivative financial liabilities 17 (15.2) (8.3) (12.6)
Obligations under finance leases (1.6) (2.4) (2.7)
Total non-current liabilities (332.6) (286.6) (293.6)
Total liabilities (415.0) (357.2) (371.0)
Net assets 396.0 313.0 368.1
Equity
Called up share capital 6.1 6.1 6.1
Share premium account 112.4 112.3 112.3
Own shares (0.1) (0.1) (0.1)
Translation reserve 60.8 (1.0) 37.5
Hedging reserve 1.3 - (0.6)
Retained earnings 219.0 200.7 219.3
Equity attributable to owners of the Company 399.5 318.0 374.5
Non-controlling interest 11.7 3.3 5.0
Put option over non-controlling interest (15.2) (8.3) (11.4)
Total non-controlling interest (3.5) (5.0) (6.4)
Total equity 396.0 313.0 368.1
GENUS PLC
GROUP STATEMENT OF CASH FLOWS
For the six months ended 31 December 2016
Notes Six monthsended31 December2016 Six months ended31 December2015 Yearended30 June2016
£m £m £m
Net cash flow from operating activities 14 8.3 5.6 30.0
Cash flows from investing activities
Dividends received from joint ventures and associates - - 2.4
Joint venture loan repayment 1.7 - 1.0
Acquisition of subsidiaries, net of cash acquired 18 (2.9) - (3.5)
Acquisition of investment (0.3) - (3.5)
Acquisition of investment in joint venture - (0.2) (0.2)
Disposal of subsidiary, net of cash disposed - 0.1 0.1
Purchase of property, plant and equipment (6.5) (4.7) (11.8)
Purchase of intangible assets (3.7) (2.9) (6.8)
Proceeds from sale of property, plant and equipment 1.0 0.8 1.8
Proceeds from sale of assets held for sale - - 0.7
Net cash outflow from investing activities (10.7) (6.9) (19.8)
Cash flows from financing activities
Drawdown of borrowings 35.2 36.0 53.6
Repayment of borrowings (17.8) (18.6) (37.3)
Payment of finance lease liabilities (1.0) (0.8) (1.9)
Equity dividends paid (9.0) (8.1) (12.2)
Dividend to non-controlling interest - (0.4) (0.4)
Issue of ordinary shares 0.1 0.1 0.1
Debt issue costs - - (1.4)
Decrease in bank overdrafts (3.5) (1.1) -
Net cash inflow from financing activities 4.0 7.1 0.5
Net increase in cash and cash equivalents 1.6 5.8 10.7
Cash and cash equivalents at beginning of period 34.0 21.3 21.3
Net increase in cash and cash equivalents 1.6 5.8 10.7
Effect of exchange rate fluctuations on cash and cash equivalents 1.4 (0.1) 2.0
Total cash and cash equivalents at end of period 37.0 27.0 34.0
GENUS PLC
ANALYSIS OF NET DEBT
For the six months ended 31 December 2016
At 1 July 2016 Net cash flows Foreign exchange Non-cash movements At 31 December 2016
£m £m £m £m £m
Cash and cash equivalents 34.0 1.6 1.4 - 37.0
Interest-bearing loans - current (4.6) 2.8 (0.4) (0.2) (2.4)
Obligation under finance leases - current (1.1) 1.0 (0.1) (1.8) (2.0)
(5.7) 3.8 (0.5) (2.0) (4.4)
Interest-bearing loans - non-current (115.3) (16.7) (8.0) - (140.0)
Obligation under finance lease - non-current (2.7) - (0.2) 1.3 (1.6)
(118.0) (16.7) (8.2) 1.3 (141.6)
Net debt (89.7) (11.3) (7.3) (0.7) (109.0)
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 5.8 (0.1) - 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) (9.7) (5.9) (0.8) (88.2)
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 2016
1. Basis of preparation
The unaudited Condensed Set of Financial Statements for the six months ended 31 December 2016:
· 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 Genus
plc Annual Report 2016;
· 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 2017.
The information relating to the year ended 30 June 2016 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 2016 has not been reviewed by our
Auditor.
The Genus plc Annual Report 2016 (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 2016, which are
available on the Group's website www.genusplc.com, except as described below.
New standards and interpretations
The following new standards and interpretation have been adopted in the current period:
· Amendments to IFRS 11 'Accounting for acquisitions of interests in Joint ventures', IAS 27 'Equity method in separate
financial statements', IAS 1 'Disclosure Initiatives';
· 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'; and
· 'Annual Improvements to IFRS 2012 - 2014 cycle'.
There has been no significant impact on the results or disclosures for the current period from the adoption of these new
standards and interpretations.
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):
· 'Annual improvement 2014-2016 cycle';
· IFRIC 22 'Foreign currency transaction and advance consideration';
· IAS 7 (amendments) 'Disclosure Initiative';
· IAS 12 'Recognition of deferred tax assets for unrealised losses';
· IFRS 2 (amendments) 'Classification and Measurement of Share-based Payment Transactions';
· IFRS 9 'Financial Instruments';
· IFRS 10 and IAS 28 (amendments) 'Sale or Contribution of Assets between an Investor and its Associate or Joint
venture';
· 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 2016 Six months ended 31 December2015 Yearended30 June2016 31 December 2016 31 December2015 30 June2016
US Dollar/£ 1.27 1.52 1.47 1.24 1.47 1.34
Euro/£ 1.16 1.39 1.33 1.17 1.36 1.20
Brazilian Real/£ 4.14 5.78 5.47 4.01 5.90 4.28
Mexican Peso/£ 24.79 25.41 25.38 25.46 25.46 24.66
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
IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports about components
of the Group that are regularly reviewed by the Group Chief Executive and the Board to allocate resources to the segments
and to assess their performance.
For management purposes effective 1 July 2016, the Group's operating and reporting structure now comprises three operating
segments; Genus PIC, Genus ABS and Research and Development. These segments are the basis on which the Group reports its
segmental information. The principal activities of each segment are as follows:
· Genus PIC - our global porcine sales business;
· Genus ABS - our global bovine sales business; and
· Research and Development - our global spend on research and development.
A segment analysis of revenue, operating profit and segment assets and liabilities are detailed below. We do not include
our adjusting items in the segments as we believe these do not reflect the underlying progress of the segments. The
accounting policies of the reportable segments are the same as the Group's accounting policies as described in the
financial statements.
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 December2016 Six months ended31 December2015 Yearended30 June2016
£m £m £m
Genus PIC 122.5 99.1 206.5
Genus ABS 93.4 85.1 173.8
Research and Development
Research - - -
Porcine Product Development 5.4 4.1 8.0
Bovine Product Development 0.8 - -
6.2 4.1 8.0
222.1 188.3 388.3
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 December2016 Six monthsended31 December2015 Yearended30 June2016
£m £m £m
Genus PIC 42.8 33.1 71.7
Genus ABS 9.0 11.1 23.3
Research and Development
Research (6.1) (2.7) (8.0)
Porcine Product Development (8.2) (6.4) (13.5)
Bovine Product Development (7.3) (6.6) (12.9)
(21.6) (15.7) (34.4)
Segment operating profit 30.2 28.5 60.6
Central (5.7) (4.6) (11.3)
Adjusted operating profit 24.5 23.9 49.3
Segment assets Segment liabilities
31 December2016£m 31 December2015£m 30 June 2016£m 31 December2016£m 31 December2015£m 30 June 2016£m
Genus PIC 253.2 221.3 233.5 (55.4) (50.3) (50.3)
Genus ABS 145.7 143.7 144.4 (43.5) (33.6) (47.7)
Research and Development
Research 10.0 9.8 3.7 (0.2) (0.4) (0.4)
Porcine Product Development 172.5 123.3 146.7 (68.3) (51.5) (59.6)
Bovine Product Development 219.5 166.2 203.1 (61.5) (51.0) (51.2)
402.0 299.3 353.5 (130.0) (102.9) (111.2)
Segment total 800.9 664.3 731.4 (228.9) (186.8) (209.2)
Central 10.1 5.9 7.7 (186.1) (170.4) (161.8)
Total 811.0 670.2 739.1 (415.0) (357.2) (371.0)
5. Exceptional items
Six monthsended31 Six months ended31 December2015 Yearended30 June2016
December2016
Operating (expenses)/income: £m £m £m
Litigation (2.9) (2.5) (6.9)
Acquisition and integration (0.3) (0.1) (0.2)
Other (including restructuring) (1.0) (0.2) (0.8)
Pension related - 0.3 44.2
(4.2) (2.5) 36.3
Included within legal fees were £2.9m of legal fees related to the action by ABS Global Inc. against Inguran LLC (aka
Sexing Technologies).
During the period, £0.3m of expenses were incurred in relation to acquisitions and integration, principally of De Novo
Genetics (see note 18).
Included within other are costs principally relating to provisions for restructuring in our ABS business.
6. Net finance costs
Six monthsended31 Six months ended31 December2015 Yearended30 June2016
December2016
£m £m £m
Interest payable on bank loans and overdrafts (1.3) (1.1) (1.7)
Amortisation of debt issue costs (0.2) (0.2) (0.5)
Other interest payable - - (0.1)
Net interest cost in respect of pension scheme liabilities (0.6) (1.2) (2.2)
Net interest cost on derivative financial instruments (0.1) (0.1) (0.2)
Total interest expense (2.2) (2.6) (4.7)
Interest income on bank deposits 0.5 0.1 0.1
Total interest income 0.5 0.1 0.1
Net finance costs (1.7) (2.5) (4.6)
7. Income tax expense
Six monthsended31 December2016 Six months ended31 December2015 Yearended30 June2016
£m £m £m
Current tax 4.0 4.6 9.0
Deferred tax (1.4) (2.7) 1.6
2.6 1.9 10.6
The taxation charge for the period is based on the estimated effective tax rate on adjusted profits for the full year of
25.9% (2015: 26.5%).
The tax charge for the period on statutory profit of £2.6m (2015: £1.9m) represents a statutory tax rate of 22.8% (2015:
14.7%). The statutory tax rate for the period benefits from a 2.8% rate reduction from lower statutory profits primarily
in the USA, including reductions in the fair value of biological assets (including joint ventures), amortisation of
intangibles and exceptional legal costs on which tax relief is available at an average rate of 28% (2015: decrease in
statutory tax rate of 10.7% due to net statutory losses on movements in biological assets (including joint ventures),
intangible assets and exceptional items taxed at 40%).
There is a deferred tax liability at the period end of £132.5m (2015: £108.0m) which mainly relates to the recognition at
fair value of biological assets and intangible assets arising on acquisition and a deferred tax asset of £5.5m (2015:
£8.5m) which mainly relates to future tax deductions in respect of pension scheme liabilities, share scheme awards and
financial instruments.
8. Dividends
Six monthsended31 Six months ended31 December2015 Yearended30 June2016
December2016
Amounts recognised as distributions to equity holders in the period: £m £m £m
Final dividend
Final dividend for the year ended 30 June 2016 of 14.7 pence per share 9.0 - -
Final dividend for the year ended 30 June 2015 of 13.4 pence per share - 8.1 8.1
Interim dividend
Interim dividend for the year ended 30 June 2016 of 6.7 pence per share - - 4.1
9.0 8.1 12.2
The final dividend for the year ended 30 June 2016 was approved at the Company Annual General Meeting on 17 November 2016
and paid on 2 December 2016. On 22 February 2017 the Directors have proposed an interim dividend of 7.4 pence per share
payable on 31 March 2017.
9. Intangible assets
Technology Brand, multiplier contracts and customer relationships Separately identified acquired intangible assets Software Genus Sexed Semen Patents, licence and other Total Goodwill
£m £m £m £m £m £m £m £m
Cost
Balance at 1 July 2015 46.1 61.5 107.6 6.6 11.1 0.3 125.6 73.9
Additions - - - - 4.6 2.2 6.8 -
Acquisition - 0.7 0.7 - - - 0.7 1.9
Effect of movements in exchange rates 0.5 10.5 11.0 0.3 2.1 0.1 13.5 10.2
Balance at 30 June 2016 46.6 72.7 119.3 6.9 17.8 2.6 146.6 86.0
Additions - - - 0.5 1.7 1.5 3.7 -
Acquisition (see note 18) - 5.0 5.0 - - - 5.0 4.8
Effect of movements in exchange rates 0.7 5.1 5.8 0.3 1.5 0.1 7.7 5.9
Balance at 31 December 2016 47.3 82.8 130.1 7.7 21.0 4.2 163.0 96.7
Amortisation and impairment losses
Balance at 1 July 2015 19.8 31.5 51.3 4.5 - - 55.8 -
Amortisation for the year 2.3 3.8 6.1 0.7 - 0.2 7.0 -
Effect of movements in exchange rates - 5.6 5.6 0.2 - - 5.8 -
Balance at 30 June 2016 22.1 40.9 63.0 5.4 - 0.2 68.6 -
Amortisation for the period 1.4 2.2 3.6 0.4 - 0.4 4.4 -
Effect of movements in exchange rates - 3.0 3.0 - - - 3.0 -
Balance at 31 December 2016 23.5 46.1 69.6 5.8 - 0.6 76.0 -
Carrying amounts
At 31 December 2016 23.8 36.7
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