Genus hits record high as it beefs up profit forecast
SHARES in animal genetics business Genus hit an all-time high as it brought home the bacon for investors.
The company, which selectively breeds livestock and sells bull and pig sperm to farmers, said it was hiking its profit forecasts following a ‘strong’ performance in the six months to December 31.
It is now expecting a first-half adjusted profit of between £47m and £49m, compared to last year’s £36.6m. That is based on expected revenues of between £285m and £287m, up from £270.7m.
Genus said its pig division was experiencing booming demand, particularly in China where pork producers are growing their herds again after being devastated by African swine fever.
ABS, its cattle breeding business, is also doing well in Brazil, Russia, India and again in China.
However, the firm warned that growth in the second half was likely to slow because of the growing prevalence of Covid-19 across the globe, which is causing ‘challenges for our customers and employees’. Following the update, its shares at one stage hit an alltime high of 4560p. They closed up 4.2pc, or 180p, at 4492p, valuing the company at £2.9bn.
It came on a day of pig-related news, with sausage skin maker Devro also telling investors that it enjoyed good trading during the final three months of 2020. That helped the firm’s shares to fatten by 3.2pc, or 5p, to 160p.
Elsewhere, the FTSE 100 struggled to get lift off as traders digested gloomy High Street footfall figures and new travel restrictions being introduced in the UK.
The index sunk 0.22pc, or 15.06 points, to 6720.65. However, the FTSE 250 of mid-sized firms fared slightly better rising 0.12pc, or 23.75 points, to 20,639.34.
David Madden, market analyst at CMC Markets UK, said: ‘ The current environment is not exactly upbeat as things are getting worse with respect to the lockdowns.’
Airline stocks shuddered following the announcement of tough new arrival checks at airports and the closing of travel corridors with the UK, which are expected to have a further chilling effect on bookings. British Airways owner IAG fell 0.8pc, or 1.35p, to 160.9p, with budget operator Easyjet falling 1.9pc, or 16p, to 816p.
Fellow low-cost carrier Ryanair fell 3pc, or €0.49, to €15.30.
It was a mixed day for miners with traders convinced the US dollar will grow stronger under incoming president Joe Biden, making commodities quoted in the currency more expensive.
Glencore fell 1.1pc, or 3.05p, to 276.85p, while BHP lost 0.9pc, or 19p, closing at 2116p. Rio Tinto, however, rose 0.5pc, or 28p, to 5974p, as did Anglo American , which edged up 0.4pc, or 11.5p, to 2675p. Financial services firm CPP shot higher after reporting a stronger than expected business comeback in India, its main growth market. CPP’s shares surged 51.8pc, or 170p, to 498p after it said this meant 2020 revenues should reach about £140m, rather than the £133m forecast.
But it was another bad day for defence and outsourcing firm Babcock, which saw shares slide 6.8pc, or 15p, to 205.3p after brokers at Liberum and Morgan Stanley cut their target prices.
Babcock spooked investors last week when it warned it was reviewing its balance sheet and expected the exercise to have a ‘negative’ impact on income. The shares are down by 22pc since the announcement.
British Gas owner Centrica dipped 2.2pc, or 1.1p, to 49.5p after announcing that finance chief Johnathan Ford was stepping down after less than a year in the post. The company said the departure was for personal reasons and has appointed Kate Ringrose as his replacement.