Genus (LON: GNS), the animal genetics group that sells breeding genetics to pig and dairy cattle producers under its PIC and ABS brands, saw its shares fall over 5% today despite reporting record annual cash generation and a new £60m share buyback.
Shares traded around 2110p in early trade, down from yesterday’s close of 2234p, having fallen as low as 2016p intraday. That leaves the stock well below its 52-week high of 3220p and well below the midpoint of its 1943p-3220p range.
Genus reported adjusted pre-tax profit up 35% to £100.2m for the year to June, with adjusted earnings per share also up 35% to 110.3p, record free cash flow of £62.0m and leverage cut to 0.4 times adjusted EBITDA from 1.5 times a year earlier. The board announced a fresh £60m buyback, funded partly by proceeds from forming a joint venture that sold 51% of PIC China. Chief executive Jorgen Kokke said the payout “reflects the Board’s confidence in the future growth prospects and cash generation of the business.”
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The headline beat was flattered by one-off items, including a milestone payment tied to the BCA joint venture and effects of the PIC China disposal, including a £204.1m gain on that deal. Stripping these out, normalised adjusted pre-tax profit was only £90.3m. Guidance for FY27 points to profit only “moderately higher” than that lower base, in line with the roughly £93.0m analyst consensus, with the first half hit by North American pig disease, weak Brazilian pork prices and soft global dairy prices.
Brokers stayed supportive. Panmure Liberum reiterated a buy rating and 3700p target price, while Peel Hunt raised earnings forecasts slightly for the buyback but cautioned that growth next year looks modest, with shares trading at 22 times forecast earnings once costs tied to its PRP gene-editing technology are excluded.
