26 June 1998

Genus diversification

GENUS is to step its diversification plans up a gear as the dairy industry contracts and the farming recession deepens.

Chief executive, Richard Wood, announced the changes this week, as he unveiled annual results which showed a 47% rise in pre-tax profits to £3m in the year to Mar 31, 1998, from a turnover up 2% at £47.5m.

UKdairy cow numbers shrank 4% in 1997/98, compared with 3% in the previous year. The rate of contraction quickened as milk prices fell, and could hit 7% this year, said Mr Wood.

Better breeding and technology also played a part, leaving the mainly farmer-owned firm "a victim of its own success".

But Genus has money to spend. Although the company snapped up Scottish Livestock Services and Hylton Nomis last year, recent property sales have helped to swell the "war chest" to £8.4m.

But Mr Wood refused to comment on suggestions that one deal is imminent, after speculation that Genus has been looking for a management business to complement its newly-formed whole-farm consultancy Axient.

Genus also plans to spend more than £40m acquiring a new third division in the next couple of years, funded in conjunction with a stock market listing. The combination should help it achieve a targeted £9m profit on a £100m turnover.

The 28,000 farmer shareholders can expect a dividend of 3.5p a share, a 17% increase on the previous periods figure. &#42