Profits rise at Genus

Global animal genetics company Genus achieved a profit before tax of £32.9m in the year to the end of June 2010 compared with £32m the previous year.

The company’s 13,000 UK farmer shareholders saw the value of their shares rise on Tuesday by 17.5p to 728.5p, as the company’s performance was better than the market had been expecting.

Despite the continued agricultural recession, the second half of the year produced better results that the first, with double-digit profit growth, said the company. Net debt was reduced by £12.9m to £80m and the profit rise was achieved despite a £2.8m increase in research and development spending.

The company now has 33 bulls in the top 100 in the US and has recently extended a commercial agreement with a Chinese partner by five years, while offices were opened and sales set up in India and Russia.

The European region performed strongly and exceeded expectations, while the UK – unlike the USA and China – was relatively well protected from agricultural recession by currency values, said Chairman Richard Wood. And he confirmed that business was bouncing back in Latin America.

In the UK cattle sector conditions were difficult in the year to the end of June 2010, with milk prices rising only slightly. However, semen sales rose by 11%, with sales of sexed semen growing particularly strongly. UK pig prices had benefited from the weakness of sterling and Genus had benefited from herd expansions on the back of this.

The board is recommending a 10% increase in dividend to 12.1p/share

Looking ahead, the report said the expected rise in demand for animal protein meant that consolidation in the farming sector would continue to encourage development of the larger commercial enterprises that were Genus’s target customers.