Genetically engineered, virus-free specimens and semen for sale that guarantees offspring of a certain gender: thankfully, Genus is a company aiming to feed the world rather than a bad sci-fi story.
The company’s roots are in the Milk Marketing Board and a formerly listed business called the Pig Improvement Company (PIC), which did exactly what it said on the tin. The scientific breakthroughs mentioned above apply only to cows and pigs and are designed to meet chief executive Stephen Wilson’s stated aim of ‘helping to nourish the world’.
Before Covid even appeared, Wilson was already an old hand at viruses. He’s been dealing with the fallout from African swine flu, which ripped through China’s pig population, and has bred a type of pig that’s resistant to PRRSv – a virus that is practically endemic in Chinese porkers.
Piggy in the middle: African swine flu has ripped through China’s pig population
Perhaps we should put him in charge of Britain’s Test and Trace system, since this week’s full-year figures suggest he’s doing a pretty good job. Despite operational challenges caused by Covid including supply chain disruption and significant price volatility, as well as the usual need to keep staff and customers safe while doing business, Genus posted a 13 per cent increase in revenue to £551.4million, while profit before tax rose 16 per cent to £71million.
The company also increased its dividend five per cent, and Wilson said he anticipated further growth in the coming year. Brokers don’t think Wilson is telling porkies.
Alistair Campbell, at Liberum, has a ‘buy’ rating on the stock, and says that the company has performed ‘exceptionally well’ during the pandemic. Campbell says there is plenty of headroom for growth in China, where porcine production is 20 per cent below demand because of the effects of Asian Flu and many suppliers want to restock.
He’s also bullish (or cowish) about the prospects for Sexcel semen, sold to dairy farmers who want to produce female calves rather than male ones, which is driving growth in the firm’s cattle business.
Midas Verdict: Virus-resistant anything sounds like a good idea at the moment, and Genus’s porkers are popular with the recovering Chinese market. The company’s performance is testament to good leadership and market-leading products, a winning combination.
Genus’s share price, which stood at a record high of £39.80 on Friday, reflects its popularity and puts the firm on a toppy 37 times forward earnings with a prospective yield of 1 per cent. As Genus’s customers will tell you, you have to pay for quality. It’s worth going to market for this little piggy as it might just bring home the bacon.
Traded on: Main market Ticker: GNS Contact: genusplc.com or 01256 347100