Shares in animal genetics company Genus (LON:GNS) jumped as much as 13% to £23 after it raised its FY26 guidance. The firm said trading in the second half of the year to June 2026 had been better than expected.
Raised FY guidance
Genus operates two divisions, PIC (porcine genetics) and ABS (bovine genetics), helping farmers produce more meat and milk. It sells its products in over 75 countries worldwide, and supports farmers with its after-sales services.
Trading in H2 was better than anticipated, with PIC delivering strong growth in Latin America and Asia, including China. That more than offset a weaker performance in North America due to customer disease challenges. ABS also posted double-digit profit growth despite softer customer demand and adverse product mix driven by lower global dairy prices.
As a result, the company expects FY26 pre-tax profit to ‘moderately’ beat the £95.5 million consensus at around £98m. That includes the final £5.6m milestone payment received during the year from BCA, the group’s Chinese partner.
In addition, ‘very strong’ H2 cash conversion and a further £111 million payment from BCA mean FY26 net leverage is significantly reduced. With its strengthened balance sheet, the firm said it was ‘well placed’ for FY27.
We’ve liked Genus for some time, and the stock really delivered during 2025 with a return of around 65%. This year, in contrast, the shares have given up about half those gains as earnings catch up with the valuation.
We knew H1 had gone well, and analysts subsequently upped their pre-tax forecasts from around £85 million to around £95 million. The firm says it will ‘moderately’ top that forecast and is ‘well placed’ for FY27, which is encouraging.
Genus’s proven revenue royalty model means high levels of customer loyalty and therefore visibility of earnings. It also means high barriers to entry which makes it tough for rivals to muscle in on its business.
The big catalyst for the shares, however, would be regulatory approval for its pig gene editing treatment in certain key markets. The US and Canada have granted approval, but decisions are still pending in Argentina, Brazil, Mexico and Japan, so watch this space.
Read the press release here: https://www.genusplc.com/investors/
