This article first appeared on GuruFocus .
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Revenue:Unchanged compared to the previous period.
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Profit Before Tax (PBT):Increased by 57% to GBP55.7 million.
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Earnings Per Share (EPS):Up 53% to 60.8p per share.
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Free Cash Flow:GBP8.2 million inflow in the first half.
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Leverage:Reduced to 1.4 times from 1.5 times.
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Return on Capital:Improved to 15.8% from 14.7%.
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PIC Royalty Revenue:Grew by 6% to GBP93 million.
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PIC Adjusted Operating Profit:Increased 30% to GBP72 million; margin at 34.5%.
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ABS Margin:Improved by 180 basis points to 7.1%.
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Dividend:Proposed interim dividend of 11.2p per share.
Release Date: February 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Genus PLC ( GENSF ) delivered record first-half profit driven by PIC growth and benefits from the Value Acceleration Programme (VAP) in ABS.
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Free cash flow generation remained solid, maintaining strong levels compared to last year's record inflow.
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Regulatory progress on PRP, the PRRS-Resistant Pig, was achieved with Canadian approval, moving towards North American commercialization.
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A strategic porcine joint venture was formed in China, positioning the business for long-term growth in the largest porcine market.
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PIC royalty revenue grew by 6% with significant contributions from China, indicating strong market penetration and customer acquisition.
Negative Points
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The ABS segment faced challenges with a 2% decline in conventional volumes, despite a 1% growth in sexed volumes.
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China's decision to close its borders to US bovine genetics negatively impacted ABS profitability in Asia.
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Increased PRP-related expenditure is expected, with a full-year increase of about GBP3 million, impacting overall costs.
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The company anticipates higher bovine product development costs due to prior investments and acquisitions.
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Market conditions remain mixed, with weak pork prices in China and global milk prices weakening, posing challenges for future growth.
Q & A Highlights
Q: Can you discuss the sustainability of PIC's performance in China and Brazil, and whether new customers have been acquired? A: Jorgen Kokke, CEO, explained that Genus has focused on the royalty model in China, which has led to significant customer acquisition and growth. The market in China has become more sophisticated post-ASF, allowing for better use of advanced genetics. In Brazil, Andy Russell, CFO, noted strong market conditions and growth in royalty revenues, although penetration is slightly lower than in North America.
Q: With the VAP program nearing its end, what are the remaining levers for ABS to achieve double-digit margins? A: Jorgen Kokke, CEO, highlighted ongoing initiatives in commercial and operational excellence, such as inside sales desks, expanded sales networks, and Lean and Six Sigma practices. These efforts aim to improve efficiency and margins, with a target of reaching double-digit operating profit margins.
Q: What is the focus of the PRP investments, and how are you preparing for launches in Colombia and the Dominican Republic? A: Andy Russell, CFO, detailed that PRP investments include maintaining animals, marketing, and market acceptance activities. The company is carefully considering launches in Colombia and the Dominican Republic, viewing them as opportunities to gain experience with the technology.
Q: How does the China JV affect Genus's strategy, and what confidence do you have in maintaining the current strategy? A: Jorgen Kokke, CEO, stated that the JV with BCA will help unlock PRP opportunities in China. Genus retains significant control with two out of five board seats and the right to appoint the CEO, ensuring alignment with BCA's interests in growing the business.
Q: Can you provide insights into the market acceptance of PRP in China and the regulatory progress in Mexico and Japan? A: Jorgen Kokke, CEO, emphasized the importance of government support in China, facilitated by the JV with BCA. In Mexico and Japan, regulatory processes are ongoing, with positive engagement from authorities and support from local pork producers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
