Genus on track to beat expectations

In the six months to 2014, the group reported a pre-tax profit of £28.6m, up from £22m in the previous year, while revenue rose 9% to £198.5m.

However, strong currency headwinds limited the growth in revenue, which increased 13% on a constant currency basis, while operating margin declined to 12.2% from 12.8%.

Growth in North America, Latin America and Europa offset a sluggish performance in Asia, where sales suffered from Russia’s travails, driving porcine revenues up by 6%.

Meanwhile, bovine revenues rose 7%, as growth in North and Latin America and Europa offset flat sales in Asia.

The FTSE 250 group said it expected progress to continue in the second half of the year, albeit at a slower pace due to weak market conditions in China and Russia and to a decline in dairy and pork prices.

“A strong first half performance helped by early acquisition synergy realisation will lead to near term upside momentum to forecasts,” analysts at Numis said in a note on Tuesday.

The broker, which reiterated its ‘buy’ rating on the stock, also warned that “less favourable market conditions for producers could temper significant upgrades for longer term estimates”.

After an initial fall, Genus shares were up 4.27% to 1,344.00p at 09:00 on Tuesday.