Genus PLC’s shares fell 6.65% in premarket trading to $2,085.50, trading near the lower end of their $1,943–$3,220 52-week range, after the company reported strong second-half 2026 financial results. The stock remains 7.3% above its 52-week low but 35.3% below its peak, reflecting investor caution amid a 2% revenue drop and a second-half-weighted outlook. Revenue fell to GBP 658.1 million, primarily due to the deconsolidation of PIC China, which contributed a GBP 204 million one-time gain to statutory profits. Despite this, adjusted profit before tax surged 35% to GBP 100.2 million, driven by stronger trading, lower finance costs, and operational improvements across key segments. Adjusted earnings per share rose 35% to 110.3 pence, while free cash flow climbed 51% to GBP 62 million—a 94% conversion rate—as net debt fell to GBP 71.8 million and leverage improved to 0.4x EBITDA. The company’s return on adjusted invested capital increased to 18.4%, up from 15% in FY 2025.
Segment performance highlighted by Genus included PIC’s adjusted operating profit rising 17% to GBP 130.8 million, with royalty revenue growing 5% in constant currency to GBP 197 million (a 4% annualized CAGR). The ABS sexing volumes increased 2% to 8.8 million units, while the Value Acceleration Program (VAP) delivered GBP 7 million in FY 2026, targeting GBP 9 million annually. In China, Genus’ market share expanded from 3.4% to 5.4%, with full-entity volumes up 71% and adjusted operating profit rising 81% to GBP 15.2 million—its 7-month full ownership period contributing significantly.
The company also advanced its PRP (Porcine Reproductive and Respiratory Syndrome Resistant Pig) pipeline, securing regulatory approvals in Argentina, Canada, Uruguay, and Peru, expanding its global footprint to eight jurisdictions. Commercialization efforts in Latin America are underway.
In capital allocation, Genus announced a GBP 60 million share buyback for FY 2027 and proposed a 10% dividend increase to 35.2 pence per share, representing a 32% payout ratio of adjusted EPS. For FY 2027, the company expects moderate year-on-year growth in underlying adjusted profit before tax, with second-half weighting and free cash flow remaining strong but slightly lower than FY 2026 due to China joint venture formation and modest capital expenditure increases.
Analysts noted mixed reactions to the results. While Jorgen Kokke (CEO) described FY 2026 as a year of progress, citing 35% PBT and EPS growth, investors weighed the 2% revenue decline and cyclical pressures in agricultural markets. Andy Russell (CFO) emphasized the company’s improved balance sheet and strategic options, while also highlighting the dividend proposal as a return to sustainable growth. The stock’s decline underscores the tension between strong operational performance and near-term revenue pressures.
