Source: Sharecast
Genus now expects around £98m of adjusted pre‑tax profit for FY26, including a £5.6m milestone payment from its Chinese joint‑venture partner BCA, compared with current consensus of roughly £95m. Berenberg said the uplift reflected continued strength in the core PIC porcine division and the ongoing turnaround in ABS bovine, alongside very strong free‑cash‑flow generation. Following receipt of £111m from the formation of its Chinese porcine JV, year‑end net leverage was set to fall to 0.4x, down from 1.5x a year earlier.
Berenberg, which also kept its 3,350p target price on the stock, noted that trading in H226 was ahead of expectations, with PIC delivering robust growth in Asia and Latin America, more than offsetting a difficult disease season in North America. ABS posted double‑digit profit growth as its turnaround continued, despite softer demand and a weaker product mix linked to lower global dairy prices.
The German bank highlighted "standout" cash conversion in the second half, delivering significant year‑on‑year growth in free cash flow and extending the improved trajectory under Genus' new chief financial officer. Free cash flow to equity rose to more than £40m in FY25, compared with a cumulative outflow of around £10m between FY22 and FY24.
Berenberg also said the latest upgrade demonstrated the increasing resilience of the business, driven by market‑leading genetics, a continued shift towards royalty‑based revenues and broader geographic diversification, including strong growth in Asia and a significant long‑term opportunity in China.
Reporting by Iain Gilbert at Sharecast.com