Genus PLC (LSE:GNS) shares leapt almost 11% higher on Thursday morning after the livestock genetics group sealed a new China deal and announced a 24% increase in annual profits.
The FTSE 250-listed group reported adjusted profit before tax of £74.3 million, up 38% at constant currency rates, boosted by broad-based growth across its porcine genetics business (PIC) and profitability improvements in bovine (ABS).
PIC secured 12 new royalty customers in China, bringing the total to 25 over the past two years, while ABS benefited from a 'value acceleration programme', that is expected to deliver a further £6 million benefit in the coming year.
Following a year that saw a major milestone as the US Food and Drug Administration approved Genus’s PRRS-resistant pigs (PRP) for use in the American food chain, management said regulatory progress continues in other key markets.
A new joint venture has been agreed with Chinese partner Beijing Capital Agribusiness (BCI), with Genus receiving $160 million in gross cash, accelerated milestone payments, and future PRP royalties.
Cash performance was strong, with operations generating £106 million and free cash inflow of £41 million, reducing net debt to £228 million.
The dividend was maintained at 32p per share.
Genus shares soared 29% to a new two-year high of 3,228.8p in early trading, before easing to around 2,800p.
Broker Peel Hunt said underlying PBT came in at £70.6 million, ahead of its £68 million forecast, noting “lots to like” in Genus’s strong financial delivery and the cash and commercial acceleration brought by the Chinese JV.