Genus warns of tough times in short term as adjusted FY profits rise

Animal biotech firm Genus on Thursday reported a 4% rise in adjusted full year pre-tax profits to £58.5m as it forecast a tough time ahead with trade disputes and the recent spread of African swine fever to China.

Statutory pre-tax profits fell 81% to £7.8m, due to a reduction in the non-cash fair value of biological assets, however, statutory profit after tax increased by 21% to £41.6m as a result of non-cash deferred tax credits related to biological assets arising from US tax reforms.

Revenues were up 2% at £470.3m and the dividend was increased 10% to 26p a share.

Chief executive Karim Bitar said the growth in the company's ABS division, which deals with dairy and beef cattle had been “particularly strong”.

"The successful launch of Sexcel, our innovative proprietary 21st century sexed semen product in September 2017, was a real highlight after many years of pioneering development,” Bitar said.

“It was very pleasing to hear from dairy farmers how the product performance is exceeding their expectations. Sexcel is delivering a great on-farm experience, with materially better conception rates than alternative products.”

"In the short term, the external environment for many of our customers is challenging due to trade disputes and the recent spread of African Swine Fever to China."

Genus added that it continued to fight claims in the US against its bovine semen technology by STGenetics ('ST').

“We have filed Inter-Partes Reviews at the US Patent and Trademark Office, seeking to revoke six patents ST has asserted against us, and have also filed a Motion to Dismiss and Counterclaims in the Federal Court,” the company said.