Genus plc (GENSF) Q2 2025 Earnings Call Transcript

2025-02-28 18:15:13 ET

Genus plc (GENSF)

Q2 2025 Earnings Conference Call

February 27, 2025 03:30 AM ET

Company Participants

Jorgen Kokke - CEO

Alison Henriksen - CFO

Conference Call Participants

Charles Hall - Peel Hunt

Seb Jantet - Panmure Liberum Limited

Sean Conroy - Shore Capital

Damian McNeela - Deutsche Bank

Christian Glennie - Stifel

Alex Jones - Bank of America

Edward Sham - Singer Capital Markets

Presentation

Jorgen Kokke

Good morning, everyone. Thank you very much for joining us here at Buchanan. My name is Jorgen Kokke and I am Genus's CEO. In this presentation, Alison Henriksen, our CFO, and I will take you through Genus's interim results for the 6 months ended 31st of December, 2024. Welcome. Thank you for joining. In summary, I would say that we have achieved strong financial results as well as significant strategic progress. I'd like to take this opportunity to thank all of Genus' employees for their contributions in achieving these results.

Let me start with an overview of our -- an overview and our key financial headlines. Here are my 3 strategic priorities, which are unchanged. Our first priority is continued growth in porcine with more stable growth coming from China. I am pleased to report that PIC, excluding China, achieved a 13% increase in operating profit in H1. In China, we signed up another 7 new royalty customers and we now have royalty contracts in place with 3 of the top 5 producers in the largest porcine market in the world.

Our second priority is the successful commercialization of PRP, which is the biggest opportunity from our R&D program. I'm happy to report that we've made substantial progress. The FDA has accepted our environmental assessment and the FDA has also conducted site inspections of our PRP facilities. In the meantime, we have responded to the FDA site inspection feedback, and we continue to expect approval for PRP in calendar year 2025. Beyond the FDA, our engagement with other international regulators continues to be encouraging.

Our third priority is driving greater value from bovine. As a reminder, we initiated a comprehensive Value Acceleration Program 18 months ago to return our ABS business to growth and also improve margins, return on capital and cash generation. There has been very good progress and VAP is on track to deliver GBP 21 million run rate benefit by the end of this fiscal year. One area I'd particularly like to highlight is the substantial improvement in bovine cash flow from better inventory management, benefit from VAP. Alison will take you through this in her section. During the first half, we also acquired the minority interest in ABS' De Novo joint venture. This acquisition demonstrates our commitment to a strong genetic lineup in bovine and we are already seeing the benefits of full ownership.

Turning then to our headline financial performance in the first half of FY '25. Adjusted operating profit grew 19%, in actual currency to GBP 45.2 million, and adjusted profit before tax grew 21%, in actual currency to GBP 35.4 million. We're delighted with this profit performance and we are maintaining an interim dividend of 10.3p per share. Looking then at our markets, and I will pick out a few highlights for each of the species....

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