UK livestock genetics firm Genus, which owns pig breeding company PIC, has reported better-than-expected annual earnings in its preliminary financial results for the full year ending June 30, 2020.
Driven largely by exports to China, the report shows that the firm performed strongly and made substantial strategic progress throughout the 2020 fiscal year, and in the second half showed its resilience following the outbreak of the COVID-19 pandemic.
Genus shares hit a record high following the company turning in 17 per cent higher earnings per share for the year ended June at 85.4 pence, an increase of on the estimates from analysts at Liberum Capital, Jefferies and Investec, which predicted earnings to range between 76.2 and 79 pence.
Its revenue increased 13% to 551.4 million pounds, with revenue from the porcine genetics segment up 17%, on the back of strong volume growth in China.
The growth came from high demand in China as large producers expanded to fill the supply shortfall caused by African Swine Fever in 2019. Europe and Latin America also contributed strong growth, resulting in PIC’s adjusted operating profit including joint ventures being 25% higher in constant currency.
Genus, which produces breeding livestock through genetic improvement, previously held approximately 2 per cent of the Chinese market, however, it doubled its supply chain in China over the year by allowing trusted customers to ‘multiply’ its genetics.
Stephen Wilson, Genus chief executive, commenting on the increased demand, said: “PIC continued to benefit from strong demand for its genetics in China, due to re-stocking, as large customers replenished and grew their herds following the spread of African Swine Fever (‘ASF’) in 2019. PIC also achieved strong growth in other regions and is clearly gaining market share due to the strength of its genetics.”
And commenting on the overall performance and outlook, Mr Wilson said: “Our customers experienced challenges due to the unprecedented market price and demand volatility as protein supply chains were disrupted in some markets. I am proud of the way our people responded and supported our customers through this period.
“We had to adapt in many ways to ensure that we could continue to supply our customers in the face of extraordinary circumstances, but through the ingenuity and determination of our people we have been able to keep operating uninterrupted during the crisis. This has been achieved while continually focusing on protecting our employees, customers and other stakeholders.”