Genus strategy brings a profit rise of £5.2m
STREAMLINING costs, breeding success and acquisitions have helped cattle breeding and consultancy business Genus lift pre-tax profits by 30% to £5.2m for the year to Mar 31, 1999.
Despite what company chairman John Beckett described as the worst agricultural recession since the 1930s, which has caused the companys core market to fall by 6%, Genus sales climbed by 20% to £57.2m pushing operating profit up 40% to £3.6m. As a result, the board is recommending a 14% increase in dividend from 3.5p to 4p.
In its breeding business, operating profit rose by 32% to £2.4m helped by the introduction of its first world class UK proven bulls and the acquisition of semen sexing company Gensel.
In consultancy, Genus raised operating profit by £700,000 to £1.1m from growth and acquisitions. Last year the companys £7m shopping basket included overseas consultants Hunting Technical Services, market research and consultancy company Produce Studies and the international consultancy P-E International.
Topping its list this year, backed by a £10m war chest to fund further diversification, is animal health supplier VDC. After stalled negotiations with the VDC board (Business, May 21), Genus raised its cash offer from 190p to 220p a share, a £24m offer. Genus already holds a 7% stake in VDC.
Listed on OFEX, the junior market for small to medium firms, Genus wants to move to AIM or full market listing this summer. The change would increase share liquidity to achieve what it describes as a more realistic share price. A decision will be made at a shareholders meeting on June 9. *