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Genus trading in line with downgraded forecasts as China turbulence continues

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London-listed Genus said in a trading update that its pre-tax profit was set to sit somewhere between £58m and £61
London-listed Genus said in a trading update that its pre-tax profit was set to sit somewhere between £58m and £61

Animal genetics company Genus said it expects its full year results to be in line with expectations, after it downgraded its forecasts in February.

The London-listed firm said in a trading update that its pre-tax profit was set to sit somewhere between £58m and £61 amid a “challenging” Chinese market.

Genus’ group net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be circa 2.0x at year-end, which it said was supported by strong cash conversion in the year.

The company said that its division in China “continues to perform robustly” despite the market experiencing continued turbulence, with the “most efficient producers now achieving positive margins as feed costs have declined”.

It said that there was an improved outlook for several other porcine markets.

Genus’ other business, ABS Dairy, continued to experience lower year on year volumes during the second half of its 2024 financial year, as weak demand persisted in several countries, most notably in China and Brazil, impacting its adjusted operating profits.

However it said that this shortfall in its adjusted operating profits was offset by the realisation of early savings as a result of actions taken following the strategic review completed in February 2024.

Genus added that overall ABS volumes and adjusted operating profit in the financial year 2025 are expected to be lower than previously assumed due to the continuation of weak demand in several countries, including China and Brazil.  

The company’s shares crashed by more than 20 per cent in February after it warned on its profits and tough market conditions. It said at the time that it was expecting to report revenues of £334m.

Genus also said management had “taken significant action through a comprehensive global value acceleration programme that includes changes to the leadership structure, integration and simplification of ABS’s supply chains, targeted pricing initiatives and cost efficiencies.”