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LONDON (Alliance News) - Animal genetics company Genus PLC Friday said it increased volume, revenue and profits in the first four months of the year, although the rate of reported growth was slower than on a constant currency basis, as it continues to take a hit from sterling strength.
The company, which provides products such as semen and breeding animals that it claims have superior genetics to animals currently in production, said that trading so far in its new financial year have been in line with its expectations, and said that it is trading in line with those expectations for the full year.
"The headwinds experienced last year are abating as expected. As we continue to execute our strategy, we anticipate achieving growth expectations for the financial year 2015," the company said.
Back in September, the group reported lower underlying profit for the financial year ended June 30, as the strength of sterling, a weak market in Asia, and investments it is making in expanding its pig business in China offset a strong performance in its dairy and beef cattle business and pigs business elsewhere.
In its statement Friday, Genus said that market conditions for its bovine and porcine customers have been favourable, with good harvest in some regions leading to a fall in input costs.
"Pork prices have been recovering in China, but the exceptionally high prices in North America over the summer have now reduced. Dairy prices globally have generally declined since the start of the financial year, while beef prices have remained elevated," the company said.
Genus said that strong trading in the Americas drove an increase in profits, while trading in Europe has been similar to last year.
"Dairy and beef volumes in Genus ABS grew in Europe and Latin America, while North America's overall volumes were stable. ABS increased revenues but higher product costs and expense phasing resulted in profits being slightly lower in the period," it said.
Genus said that in Asia, bovine volumes grew, driven by China and India, while porcine volumes fell due to lower shipments in Russia, as a result of its borders being closed to food imports from the EU and North America, as part of Western sanctions over Ukraine.
"Overall profits in Asia improved, with better performances in both species in China and in the Philippines, partially offset by lower profits in Russia," the company add.
Genus said it spent more on research and development projects in the first four months of the year on "core research projects", including its Genus Sexed Semen project. It said its US trial for the litigation relating to the GSS technology against Inguran LLC is set for early 2016.
The company said that its financial position remains strong, with its net debt lower year-on-year, but higher than it was in June.
"The increase in net debt since the start of the year reflects the acquisition of Birchwood, exchange rate movements and expected seasonal cash flow patterns," it said.
During the period, Genus In September, completed the GBP6 million acquisition of Birchwood Genetics Inc, a boar stud partner providing male pig genetics to mid-and small-sized customers in the US.
Genus companies operate in 30 countries, with research laboratories located in Madison, Wisconsin in the US.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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