Genus PLC shares retreated from their recent all-time highs after the cow and pig semen specialist delivered a strong performance for the past year but warned of the negative effects in the Chinese porcine market.
Profit before tax at constant currencies climbed 32% to GBP87.5mln and statutory PBT jumped 21% to GBP55.8m, as the cattle-sexing specialist saw strong volume growth in its key porcine (PIC) and bovine (ABS) units as China, Brazil, India and Russia were noted as high-growth markets.
The bovine arm’s volume growth was a record, driven by the continued success of Sexcel, its proprietary technology for sexing bovine semen, and a strong performance by its new NuEra beef genetics index.
Boss Stephen Wilson said the outlook for the group “remains positive” but recent volatility in the Chinese porcine market “is expected to continue for some months, creating a short-term headwind in FY22, primarily for PIC China”.
“As a result of this headwind, and despite an expected strong performance in the other areas of the business, we expect Genus’s growth to be lower than our medium-term goal in the current year before increasing again in FY23.”
Shares in the company fell 10% by on Thursday lunchtime to 5,300p, levels last seen in mid-July.
Broker Peel Hunt downgraded its recommendation on the shares to ‘hold’ from ‘buy’, with a target price of 5,500p, as it reduced its forecasts on lower pig prices in China.