Genus (GNS) H2 2024 (Q&A) earnings summary

Executive summary

• ABS margins remained at 4–5% in FY 2024, with transformation efforts and the Value Acceleration Programme (VAP) targeting mid-teen margins; phase 1 completed, phase 2 underway.

• The China market saw significant profit decline in both ABS and PIC due to economic and sector-specific challenges, with cautious outlooks for recovery.

• PRP gene edit commercialisation advanced, with regulatory submissions in the US, Canada, Japan, and China; US FDA approval expected in 2025, but timelines remain uncertain.

• The VAP delivered a GBP 7.3 million (EUR 10 million) run-rate benefit in FY 2024, with another GBP 5 million (EUR 10 million) targeted for FY 2025.

• Sustainability efforts yielded certified reductions in greenhouse gas emissions in North America and Europe.

Financial highlights

• FY24 revenue was £668.8m, down 3% year-over-year; adjusted operating profit including JVs was £78.1m, down 9%; adjusted profit before tax was £59.8m, down 16%.

• Adjusted earnings per share fell 23% to 65.5p; full-year dividend maintained at 32p per share.

• Free cash flow conversion improved to 71% (from 53% in FY23); net debt increased to £248.7m, with Net Debt:EBITDA at 2.0x.

• Exceptional costs included £24.6m in items such as litigation, restructuring, and abandoned transactions, with GBP 6–8 million expected in FY 2025, mainly for VAP phase 2 restructuring.

• Statutory profit before tax was £5.5m, impacted by exceptional items and higher finance costs.

Outlook and guidance

• Market conditions are stable to slowly improving, but caution remains, especially in China.

• ABS is not expected to see volume growth in FY 2025; profit growth will be driven by self-help measures.

• PIC is expected to deliver solid growth, but China profitability will remain low and recovery will be gradual.

• Significant PBT growth in constant currency projected for FY25, with an £8–9m currency headwind if FX rates persist.

• PRP regulatory approval in the US is progressing, with post-approval compliance and site inspections as the next steps; timelines remain uncertain due to regulatory unpredictability.