Genus (LON:GNS) reported higher adjusted profit and cash generation for FY 2026, supported by growth in its porcine genetics business, efficiency gains in bovine genetics and contributions from joint ventures. The company also announced a £60 million share buyback and proposed a 10% increase in its full-year dividend.
Adjusted profit before tax rose 35% to £100.2 million, while adjusted earnings per share also increased 35% to 110.3 pence. Revenue was £658.1 million, down 2% at actual currency, which Chief Financial Officer Andy Russell said primarily reflected the deconsolidation of PIC China after the formation of its joint venture with BCA.
Porcine business drives profit growth
PIC, Genus’ porcine genetics business, recorded a 17% increase in adjusted operating profit to £130.8 million. Its adjusted operating margin rose 330 basis points to 30.9%. The result included a £5.6 million BCA milestone receipt recognized in the first half.
Adjusted royalty revenue, which includes PIC’s share of joint-venture royalty revenue, grew 5% in constant currency. Russell said all PIC regions grew, led by Southeast Asia and joint ventures, while Latin America benefited from high breeding-stock sales. Performance was partly offset by disease-related customer challenges in North America during the second half.
Genus said Agroceres PIC, its 49%-owned Brazilian joint venture, delivered adjusted operating profit growth of 56% to £38.9 million, with Genus’ share of profit reaching £19.1 million. The PIC China venture reported volume growth of 71%, royalty revenue growth of 52% and adjusted operating profit growth of 81% to £15.2 million for the full entity.
Chief Executive Officer Jorgen Kokke said PIC’s estimated China market share increased to 5.4% in FY 2026 from 3.4% in FY 2025, despite weak pork prices and producer profitability in the country. He said growth came from both existing and new customers, and that Genus remains focused on expanding its presence with larger customers.
During the analyst question-and-answer session, Kokke said lower pork prices in Brazil are likely to result in lower growth in the country during FY 2027. In North America, he said a severe season for porcine reproductive and respiratory syndrome, or PRRS, reduced piglet volumes and therefore royalty revenue. The company expects this to remain a headwind in the first half of FY 2027, with a potential recovery later in the year if conditions normalize.
PRRS-resistant pig advances toward commercialization
Genus continued to advance its PRRS-resistant pig, or PRP, technology during FY 2026. The company secured approvals or favorable determinations in Argentina, Canada, Uruguay and Peru, following prior milestones in Colombia, Brazil, the Dominican Republic and the United States.
Kokke said commercialization is beginning in selected Latin American markets, with Peru among the first countries being targeted. He said the commercial terms being discussed were in line with pricing outlined at the company’s previous capital markets day, although Genus did not disclose specific pricing.
The company said it expects the initial launches to help establish customer and supply-chain operations and provide real-world data on productivity, mortality and PRRS prevalence. Regulatory processes remain under way in Mexico, Japan and China.
In China, Kokke said Genus completed local disease-challenge studies across multiple generations of PRRS-resistant pigs and is preparing its submission dossier. The data will be reviewed by an expert panel before a recommendation is made to the Ministry of Agriculture, he said, while declining to provide a timing estimate.
ABS margins improve as value program nears completion
ABS, Genus’ bovine genetics business, increased adjusted operating profit 17% to £22.9 million, lifting its operating margin to 7.5% from 6.3%. Sexing volumes rose 2% to 8.8 million units, though dairy-related genetics volumes faced weaker market conditions.
The company attributed much of the profit improvement to its Value Acceleration Program, which generated £9 million of benefits during FY 2026. Phase three of the program exited the year at its targeted £9 million annualized run rate, and Genus expects the overall program to conclude during the first half of FY 2027.
Kokke said the company’s medium-term objective remains a double-digit ABS operating margin. Future improvement is expected to come from commercial initiatives intended to generate profitable volume growth, alongside operational initiatives focused on gross margins, lean practices, automation and process improvements.
Genus also said it had secured a five-year government sexing contract with one of India’s largest states and was ramping production and equipment deployment for the contract.
Capital returns and FY 2027 outlook
The board proposed a full-year dividend of 35.2 pence per share, up 10%, representing a 32% payout ratio of adjusted earnings per share. The £60 million share buyback is expected to begin immediately and be completed in the second half of FY 2027.
Russell said the buyback followed net proceeds of about £98 million from the China joint-venture formation and was designed to retain balance-sheet flexibility for organic and potential inorganic investments. Genus targets leverage of between one and two times net debt to EBITDA through the cycle.
For FY 2027, Genus expects underlying adjusted profit before tax in constant currency to be moderately higher year over year, in line with consensus expectations. The company expects moderate adjusted operating profit growth in both PIC and ABS, but said profit before tax will be weighted toward the second half because the prior-year first half included the BCA milestone and fully consolidated PIC China.
Free cash flow is expected to remain strong but be lower than FY 2026, principally due to the China joint-venture formation and a modest increase in net capital expenditure.
About Genus (LON:GNS)
Genus plc operates as an animal genetics company in North America, Latin America, the United Kingdom, rest of Europe, the Middle East, Russia, Africa, and Asia. The company operates through three segments: Genus PIC, Genus ABS, and Genus Research and Development. It sells breeding pigs and semen to breed pigs with various characteristics for pork production under the PIC brand. The company also sells bull semen and embryos to breed calves with various characteristics for milk and beef production under the ABS, Genus, and Bovec brands.
