Genus unveils grand plan as first share dividend expected
GENUS plans to double turnover and join the stockmarket within five years, according to chief executive Richard Wood.
His comments came last week, announcing the launch of an agriculture-wide consultancy service, Axient Farm Business Solutions.
Acquiring a high profile farm management company was also on the cards, but recent arable prosperity had left such firms over-priced, said Mr Wood.
"As harvest progresses, realism will spread – and the prospect of a deal will become more likely."
Figures due out shortly for the year to Mar 31, 1997 are expected to show a big increase in Genuss performance compared with last year, when after-tax profits were £432,000.
Preparing for the agm on Aug 28, Mr Wood said the firms 28,000 farmer-shareholders can expect a dividend of 3p a share, the first such payment. A "significant capital gain" for shareholders would also be generated at the time of any flotation, he added.
Consultancy is expected to contribute one-fifth of the firms projected £100m turnover by 2002.
Business director Tom Kelly says while arable farmers have performed well technically, they havent always combined this with the "budget and business approach" of milk producers.
Each year, genetic gains in the industry mean there is the potential for increasing output. "Dairy producers who want to be in business in five years should be acquiring quota and producing more milk."
But for arable farmers, raising yields or buying land may not be possible. "So this means revisiting costs. Recent price falls have seen dairy farmers come down to earth rather quicker than arable farmers."
The Genus group also plans to expand in environmental services and research and development. Tax is another key area. As the companys John Warrington says: "Agriculture is hugely capitally intensive and getting it wrong can be very expensive.n
Richard Wood: Has aspirations to buy a high profile farm management company – if the price is right.
Tom Kelly: Arable farmers have not always shared the budget and business approach of milk producers.