Animal genetics group Genus PLC (LSE:GNS) enters its new financial year with momentum behind it and several big milestones in sight. Deutsche Bank has lifted its price target on the shares from 2,550p to 2,900p and kept a 'buy' rating.
Last year was already a strong one. Pre-tax profits rose 24% ahead of expectations, despite an £8 million foreign exchange hit.
The company’s ABS arm, which breeds cattle, showed further improvements, while PIC, its pig genetics business, continued to grow. Genus also won US regulatory approval for its gene-edited pigs resistant to a disease known as PRRS, and generated more cash from operations.
The coming year could prove more decisive still. In China, PIC is being moved into a joint venture with BCA, which will bring in $167.5 million of cash payments.
Progress is also expected on the commercial roll-out of those US pigs, which Deutsche says could be transformational for the division.
In cattle, a new version of the company’s so-called “VAP” platform (essentially a way of packaging and selling genetic improvements) is due to build on earlier iterations and strengthen its commercial reach.
For investors, Genus remains a somewhat specialist play. But with cash coming in, regulatory hurdles being cleared and new products on the horizon, Deutsche Bank sees the business entering what it calls a pivotal phase.
The stock was flat at 2,610p.