Genus cautions on uncertainty in second half

25th Feb 2014 10:00

Shares in animal breeder Genus declined on Tuesday as the group admitted it has faced near-term headwinds from the strengthening of sterling and a virus affecting the North American porcine industry. Issuing its interim results for the six months ended December 31st, Genus said the first half reflected a good performance by its PIC and ABS businesses, although Asia was affected by planned investments, resulting in a 45% reduction in the region's operating profits.Revenue of £181.7m for the six months reflected growth of 9% (2012: £167.2m), driven by a 7% increase in porcine volume, helped by strong growth in Asia and the Americas. Profit before tax was flat at £20.6m, although adjusted earnings per share were up 4% at 24.6p. On a statutory basis, profit fell £0.3m to £22m, while earnings per share jumped 11% to 28.4p. The interim dividend was increased from 5p to 5.5p, based on the board's confidence in the company's strategy and growth prospects. "While we face near term headwinds from the strengthening of sterling and from a virus that is new in the North American porcine industry, our confidence in the strategy for the business and in the future prospects for the company is reflected in the 10% increase in our interim dividend," Karim Bitar, Genus's Chief Executive, said. During the period the company made further progress on its strategy to expand capacity in the Chinese porcine market, where it has formed joint ventures with two partners and signed a memorandum of understanding with a large pig producer. Looking ahead, the company added: "Although trading was in line with our expectations for the first half of the year, Genus faces short-term headwinds from the currency appreciation of sterling and a virus in the North American porcine industry, which will negatively affect porcine revenues in the near term. "These factors introduce more uncertainty to our second half outlook." The share price fell 3.17% to 1,160p by 10:00.NR