Genus tumbles after warning on full-year profits

Genus shares tumbled on Thursday as the animal genetics company warned on full-year profits.

In a first-half trading update, the company said it had performed "resiliently" in challenging market conditions. It expects to report revenue of £334m and adjusted pre-tax profit of £29m, in line with expectations.

The group said that excluding China, PIC - its global porcine genetics business - performed "robustly", with North America, Latin America and Europe delivering adjusted operating profit growth in constant currency.

Genus said China continues to be a challenging porcine market, but that its "enhanced commercial focus" has resulted in winning new royalty customers in the period which will have a positive impact in fiscal year 2025 and beyond.

The company said its bovine genetics business, ABS, saw volumes fall 6% in challenging markets. There was a particular hit to demand for dairy genetics in China due to a double-digit decline in the dairy herd.

Genus said that assuming present market conditions persist for the balance of the fiscal year, fiscal year 2024 adjusted pre-tax profit is set to be "not less than" £58m in actual currency. This is down from £71.5m a year earlier.

Deutsche Numis said this compares with its current forecast of £72.8m

As far as its PRRS Resistant Pig (PRP) programme is concerned, Genus said recent engagement with the US Food and Drug Administration has shifted to the post-approval compliance procedures.

"This has clarified the data submissions and monitoring that will be required on an ongoing basis post PRP approval.

"Validation of our procedures to comply with these monitoring requirements is expected to take several months. We therefore now expect FDA approval in fiscal year 2025."

At 0905 GMT, the shares were down 27% at 1,555.84p.