Genus (LSE:GNS), the animal genetics group, reported adjusted pre-tax profit of £90.3m (normalised) for the year ended 30 June, up 35% in actual currency, driven by strong PIC growth and a £5.6m milestone payment from Chinese partner Beijing Capital Agribusiness.
Group revenue fell to £658.1m from £672.8m, largely reflecting the deconsolidation of PIC China after its transfer into a new joint venture on 31 January; excluding that business, revenue was flat in constant currency. Statutory pre-tax profit surged to £310.5m from £28.5m a year earlier, boosted by a £204.1m gain on the 51% disposal of PIC China and a £12.8m non-cash uplift in biological asset valuations.
PIC's adjusted operating profit, including joint ventures, rose 17% to £130.8m on 12% volume growth, with particular strength in China and Latin America; ABS adjusted operating profit including joint ventures improved to £22.9m at a 7.6% margin, as £9m of Value Acceleration Programme benefits offset softer dairy demand.
Free cash flow rose to £62m from £40.9m, and leverage fell to 0.4 times from 1.5 times, helped by £98m of net proceeds from the PIC China joint venture formation.
The board raised the final dividend 11% to 24.0p, taking the full-year payout up 10% to 35.2p per share, and confirmed a £60m share buyback to complete during the 2027 financial year.
"Our balance sheet has also been significantly strengthened through another year of very strong organic cash generation as well as the proceeds from the formation of our porcine joint venture in China," said chief executive Jorgen Kokke.
Genus expects FY27 adjusted pre-tax profit in constant currency to be in line with consensus estimates and moderately higher than normalised FY26 levels, weighted to the second half amid disease-related challenges in North American pork, low Brazilian pork prices and subdued global dairy pricing.
News Intelligence what this means for the company
Genus delivered 35% adjusted profit growth and a strengthened balance sheet—leverage fell to 0.4x from 1.5x—underpinned by 12% volume growth in PIC and a £204.1m gain from the 51% PIC China joint venture disposal. The company is returning capital via an 11% dividend raise and a £60m buyback, signalling confidence despite headwinds (North American pork disease, weak Brazilian prices, soft dairy demand) expected to weigh on FY27 earnings.
The profit beat and cash generation are real, but FY27 guidance is cautious—management expects adjusted profit only in line with consensus and moderately higher than normalised FY26 levels, weighted to H2. The buyback and dividend hike reflect balance-sheet repair from the China deal, not underlying operational momentum; investors should distinguish between one-off gains and sustainable earnings power.
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