Genus plc

For the 6 months ended 31 December 2024, adjusted operating profit increased 19% in actual currency to GBP 45.2 million, and adjusted profit before tax increased 21% to GBP 35.4 million. Group adjusted operating profit rose 31% in constant currency, and the operating margin improved 200 basis points to 13.4%; net financing costs were GBP 9.8 million. PIC adjusted operating profit increased 16% in constant currency, with adjusted operating margin up to 28.1%, while ABS adjusted operating profit grew 38% in constant currency to GBP 8.6 million, with margin up to 5.6%. Free cash flow was GBP 10.3 million, capex guidance for FY25 was GBP 17 million to GBP 19 million, and net debt at period end was GBP 261 million with net debt/EBITDA at 2x. Management reiterated that total FY25 PBT expectations had been raised on 15 January and said this should result in significant FY25 PBT growth in actual currency; they also continued to expect an GBP 8 million to GBP 9 million FX headwind for the full year if exchange rates stay where they are.

Jorgen Kokke framed the half as a mix of strong financial delivery and strategic execution. He emphasized three unchanged priorities: growing porcine, commercializing PRP, and improving bovine through VAP. His tone was confident but measured, noting that PIC China royalty revenue is still early, PRP remains on track for 2025 approval, and ABS still has more room to improve margins and cash generation.

Alison Henriksen highlighted that the high-investment phase is behind the company and that Genus has now passed the peak of exceptional cash outflows. She cited group profit growth, a 200 bps margin improvement to 13.4%, and strong cash flow progress driven by nearly GBP 20 million of working-capital improvement, GBP 7 million lower biological asset outflows, and GBP 6.5 million lower capex. She also noted research spend fell 30% to GBP 7.9 million, adjusted tax rate was 26% with a full-year expectation of 26% to 28%, exceptional expenses were GBP 6 million, and leverage was 2x with over GBP 100 million of headroom.

Analysts focused on tariffs, PIC China royalty ramp-up, PRP timing, ABS margin potential, working capital, and the De Novo acquisition. Management said tariffs are too uncertain to quantify but could reshape supply chains, while Genus believes it is relatively well-positioned because of multiple sourcing points. On PIC China, management said new customers typically take about 2 years to generate material revenue and another couple of years to broaden penetration, but they still expect double-digit royalty revenue growth in China from FY26 onward. On PRP, they said FDA interactions have been constructive, inspections went well, and they have not seen political interference; on ABS, they said the business can get to double-digit margins over the medium term, and on working capital they said inventory reduction helped materially but the same degree of improvement should not be expected again next half.