Final Results

Genus PLC 03 June 2004 FOR IMMEDIATE RELEASE 3rd June 2004 GENUS plc Preliminary Results for the year ended 31st March 2004 Record Profits Genus plc, the international bovine genetics company, announces record profits for the year ended 31st March 2004, despite difficult global market conditions. The Board is recommending a record 18% increase in dividend to 6.5 pence per share (5.5 pence per share in 2003). Highlights 2004 2003 % Change Group turnover £183.7m £172.8m +6% Profit before tax £8.1m £5.1m +58% Profit after tax £5.3m £2.8m +89% Basic EPS 15.5p 8.3p +87% Final dividend 6.5p 5.5p +18% Net debt £7.5m £12.2m -39% Gearing 15% 26% • Bovine Genetics - 44% of turnover - A robust result despite difficult global markets; turnover up 2.1% - Market share up in USA, Latin America and Australia - Brazil now strongly profitable - Prices down through competition from co-ops in USA - Temporary trade barriers in Japan - BSE in Canada - BSE in USA in second half - Drought in Australia - Underlying profit contribution marginally down • Other businesses - 56% of turnover - Continued recovery in Veterinary Wholesaling - Animal Health sales up 15% and underlying operating profit up 69% - Record increase in underlying operating profit of 33% from Development Consulting, excluding a one-off prior year credit and discontinued operations. Commenting on prospects Richard Wood, Chief Executive, said: 'This is an exceptionally strong result in the unusual circumstances of difficult conditions occurring simultaneously in so many international markets. It is seldom that so many international markets suffer dramatically at the same time.' 'Market conditions are now much improved. US prices hardened steadily throughout our third quarter and all market commentators are predicting an upturn, although there is still uncertainty in Australia following the drought. Markets in other areas are normal.' 'We believe that in 2004/5 Bovine Genetics will return to the strong growth profile historically achieved.' 'The Board has just approved a new five year business strategy which plans to drive underlying earnings growth at a rate in excess of the strong average historically achieved. The Board continues to focus on the liquidity of the shares as a priority.' Contacts: Richard Wood, Chief Executive, Genus plc 01256 347101 David Timmins, Group Finance Director, Genus plc 01256 347102 Buchanan Communications 020 7466 5000 Charles Ryland / Catherine Miles Chairman's Statement The Group produced record sales of £183.7m, up 6%, with record profit before tax of £8.1m, up 58% on last year, despite a number of exceptionally adverse events in world agricultural markets. Group turnover included gains in all businesses: Bovine Genetics up 2%, Animal Health up 15%, and Development Consulting up 8% on continuing operations. Underlying operating profit in both Animal Health and Development Consulting increased strongly, together contributing £2.4m, up 55% on last year after excluding a one-off prior year credit of £0.4m and discontinued items. However, the reported agricultural downturn in the first half of the year extended through several months of the second half because of a single case of BSE in the USA. This slowed the market recovery in the USA and suspended exports to a number of markets for three months. Together with other exceptional market related events in the first half year, as outlined below, these combined to reduce the underlying operating profit before exceptional items from the Bovine Genetics business to £10.6m, a small reduction on last year. (2003: £11.2m). Operating profit before exceptional charges was £9.2m (2003: £8.6m before operating exceptional charges of £0.2m). The exceptional charges of £0.5m related principally to the settlement of a legal claim inherited with the ABS acquisition in 1999 and the costs associated with an aborted acquisition in the first half year. Interest charges of £1.3m were slightly lower than last year due to lower average debt levels which more than offset the impact of higher interest rates. Property sales generated exceptional profits of £0.7m, which largely offset non-recurring charges this year. The net result was an increase in profit before tax to £8.1m (2003: £5.1m) and almost to double basic EPS to 15.5p (2003: 8.3p) Cash Flow & Gearing Net debt reduced by £4.7m to £7.5m at 31st March 2004 (2003: £12.2m) because of the continuing strong cash flow from operations generating £10m after £4m of capital expenditure. There was a small decrease in the working capital requirement. Approximately £1.1m was generated from property sales. Cash investments totalling £1.2m were made on an acquisition in Chile, buying out the minority interest in the French subsidiary and in purchasing the Brazilian stud. £1.3m of cash was generated by the issue of shares to meet institutional demand, which is explained in more detail below. Gearing at the year end was 15% compared with 26% at the prior year end. Share Capital In pursuit of the Board's intention to increase the company's share liquidity, it has made a number of attempts to restructure the share register over time to achieve more balance. In this pursuit, the company supported a discounted dealing facility for small shareholders. Some 840 shareholders took advantage of the facility and 226,148 shares were acquired and placed with institutions. In addition, the company raised £1.3m in cash by placing 725,000 shares with institutional shareholders and, raised a further £1.1m in cash by placing with institutions 1,072,280 shares issued under the company's share option and share saving schemes. Altogether, these measures increased the combined holdings of institutional shareholders to 37%. Despite this progress, the Board believes further restructuring is needed in order to attain a register that enables the company to derive the full benefits of its quoted status. To this end, the Board has obtained expert advice and will be seeking a Court-approved reorganisation of the share register later in the year. Dividend On the basis of the confidence the Board has in its long-term strategy for growth, it is recommending a record 18% increase in dividend to 6.5 pence (2003: 5.5 pence). This will be paid on 18th August 2004 to shareholders on the register at the close of business on 22nd July 2004 with an ex-dividend date of 21st July 2004. Board One of the strengths of Genus is the depth and breadth of its management team. This was demonstrated when, as announced in August 2003, Philip Acton agreed to deputise as Finance Director until March 2004 when the permanent replacement, David Timmins, was appointed. Philip did this while keeping a watching brief on the Animal Health Business for which he was, and still is, Chief Operating Officer. We announced in February 2004 that the non-executive director, Tim Yeo MP, would be resigning at the end of May 2004 following his appointment to two Shadow Ministries. I would like to thank both Philip and Tim for their contributions and to welcome David to the Board. On a personal note, I have overseen the development of Genus since its formation as an independent company. In 1996, its first full trading year, Genus was a small, marginally profitable, UK company owned by 29,000 customer/shareholders and trading solely in England and Wales. As we report nine years later, Genus is now a publicly quoted company and the largest Bovine Genetics company in the world. Against that background, it is with regret but with some pride, that I announce my intention to retire at the Annual General Meeting (AGM) in August this year. I am delighted to announce that, following the AGM, John Hawkins has agreed to replace me as non-executive Chairman. John has been a non-executive director of Genus for more than three years, so brings knowledge of the company together with a wealth of experience in commerce which will be an invaluable asset for the Group as it moves into its next phase of strategic development. John is already non-executive Chairman of Salamander, recently awarded a Queen's Award for Innovation and is a non-executive director of Psion plc. Recently the Board has developed a new five year corporate strategy for the Group. This aims to drive underlying earnings at a rate in excess of the strong average rate historically achieved. We plan to use the Group's cutting edge biotechnology research to supplement both organic and acquisition growth. The management will be incentivised with a new remuneration policy which will be presented to shareholders for approval at the AGM. John's experience and strong business acumen will be invaluable in overseeing this strategic plan which will involve the commercialisation of new inventions and local and international acquisitions. We have already started the search for a non-executive director to fill the vacancy created by John's appointment. Concluding Comments I wish the Company every success in what promises to be another exciting stage in its development. I am sure that, under the guidance of John Hawkins, the new five year corporate strategy will deliver significant shareholder value over the coming years. John Beckett, Chairman Chief Executive's Review Bovine Genetics - 44% of Group Turnover This international business uses biotechnology to drive genetic change in beef and dairy cattle. This year, 9.2 million doses of semen (2003: 8.6 million doses) were sold from the Group's five bull studs, located in four continents, to farmers in seventy countries. The international diversity of the business usually insulates it from country agricultural cycles but, this year, unprecedented market conditions occurred simultaneously in several markets. These combined to create conditions which resulted in uneconomic competitive activity, particularly from co-operatives in the USA. The principal exceptional factors were: • A general downturn in the USA • The worst drought in history in Australia • The introduction of trade barriers in Japan • BSE in Canada throughout the year • A single case of BSE in the USA which slowed the recovering US market in the second half year and halted some exports for three months. • Strong Sterling and a weak US Dollar. Genus performed better than its competitors in these difficult market conditions. None of the Genus competitors is a publically quoted company. Two UK subsidiaries of international competitors have been put on the market. Genus has announced its intention to acquire one of these, the other has been put into administration. We believe that many of the larger national co-operatives have reported losses which may lead to consolidation opportunities. The Genus business increased its volume by 5% but prices were reduced, particularly in the USA where co-operative competitors offered unrealistically low prices in a drive to gain volume in the depressed market. Sales realisations in the USA increased by 5% but this translated to a decrease of 3% in Sterling terms. The increased volume improved market share in the USA by 1% to 23%. This improvement arose from the steady growth and acceptance of the Group's unique dairy Reproductive Management Service. This system allows large producers to improve the predictability in producing cattle pregnancies while driving up milk output. By contrast, in Latin America, the changes we made to the structure last year following the collapse of the Argentinian and Brazilian exchange rates have driven through a strong profit recovery. Market share has been increased by 3% to 26% and the business has become strongly profitable. In Australia, all the integration objectives for the acquired business, RAB, have been met and the new enhanced operation has increased its market share by 5% to 40%, but in a smaller market because of the severe drought conditions which prevailed during the first half of the year. In summary, Europe and the UK were on plan but in North America, Australia and Japan profits were lower than expected for the above exceptional market reasons. Research & Development Last year we increased the R&D spend by £0.9m to £9.0m (2003: £8.1m) to hasten the speed and diversity of the bioscience programme. The Group commercially targets its research in order to select its portfolio of fundamental biotech projects. In this way, expenditure is spread across a number of short and long-term projects, all with a high chance of commercial success, were a technical solution to be achieved. Targets fall into clear categories associated with size of the market opportunity, the extent of the technical difficulty for making a breakthrough and the timeframe of likely achievement. Leading projects are summarised below: - Project Lead Time Impact Increase semen output per bull Achieved 20-40% extra sales for top bulls, worth £200-£400k per animal/year Develop technology for other 2/3 years Will enable pig semen to be frozen species Increase semen fertility 3 years Differentiates Genus semen, offers premium pricing and/or greater market penetration Sexed Semen 2/3 years Differentiates Genus semen. At least doubles the price of semen. Offers (several projects) potential for multi-species applications Genetics & Gene Markers 5 plus years 1. Increases hit rate for selection process 2. Allows selection for difficult traits 3. Biotech source for sexed semen The first of the projects has already been successful and has increased the output from top bulls, none of which is now in short supply. Two simple machines installed sometime ago at the studs in Brazil and in the UK are being used for the purposes of research into sexed semen. Two leading technologies under investigation for commercial application of sexed semen are in early prototype phases. Animal Health - 44.0% of Group Turnover This business, which sells licensed veterinary pharmaceuticals and other products and wholesales veterinary products, increased sales by 15% to £80.4m and its contribution to underlying operating profit increased by 69% to £1.6m. Like-for-like, sales in Veterinary Wholesaling increased by 10% to £71.4m. Margins improved and drove through an increase in profit contribution. However, due to intense price competition, market share reduced slightly during the second half of the year. Some enhanced system features introduced during the year to the Palm hand held electronic ordering device called 'Genuslynx' increased orders received electronically doubled to just over 50% by the year-end. New products and services were introduced to differentiate the Genus service from that of the competitors. These included the supply of medical gases for surgeries, veterinary dental equipment and consumables and an intranet service to enable customers to benchmark their performance. Licensed product turnover increased by 5% and produced an underlying operating profit increase of 11% over last year. In September 2003, an enhanced version of IdENTICHIP was launched. This new chip enables vets simultaneously to take the temperature of the animal at the same time it is uniquely identified. This revolutionary new chip is called Identichip Bio-thermal. Initially sales rose to over 20% of all chip sales but a temporary manufacturing problem held back growth in the final quarter. An immediate benefit of this new product will be to differentiate the Genus identification product range from generic competition, so creating a more stable premium priced market for Genus. Progress has also been made in developing a number of new licensed pharmaceutical products, to add to the Group's intellectual property base and profit growth potential. Sales from Oticyl and Lax-a-Past, the two 'over the counter products' launched in the first half of the year, progressed strongly. Negotiations began for access to prescription products in five other therapeutic areas. Development Consulting - 12.0% of Group Turnover This small business, located in the UK, provides consulting services to the UK Government, the EU and to overseas aid agencies for projects generally operated in less developed countries. Development Consulting increased its turnover by 8% to £22.7m on continuing operations and produced an underlying operating profit of £0.8m, up 33% on its underlying performance last year excluding a one-off credit of £0.4m in the prior year. Amongst the notable projects in progress at the year end were: 1. Reforms to tea production in Sri Lanka for the Asian Development Bank 2. Trade Systems for Ukraine's accession to the WTO for the UK Department of International Development 3. Creation of a Social Security system for Lithuania for the European Commission In a departure from past business emphasis this year, the Division led the group to win, in May 2004, a large and prestigious contract to provide the UK Government Department for Environment, Food and Rural Affairs ('Defra') with emergency veterinary and management resources as a contingency for any future Foot & Mouth Disease ('FMD') outbreak. The contract, which is expected to commence in June 2004 is for an initial period of three years, with a possible extension to five years. In the absence of a FMD outbreak, Genus will receive fees for the maintenance of a trained and equipped resource. The Development Consultancy Division will provide the major contract management and the resources will be led and supplied by other Genus divisions. The equipment, pharmaceuticals and other consumables to maintain the operation will be stored and maintained under ISO 9001 and distributed by Genus. In the event of a FMD outbreak, Genus will receive additional fees for the delivery of the required FMD management and vaccination services for the duration of the outbreak. Company Outlook There is already clear evidence of an upturn in some major agricultural markets. In the USA, the Department of Agriculture has recently issued a report forecasting an upturn in the dairy sector this year. This view is supported by the leading market indicators we track, including wholesale semen prices which increased steadily throughout our fourth quarter, after being in decline for the previous three quarters. We believe Latin America will continue to be a strong and growing opportunity for Genus provided that the exchange rate remains stable. The Group's stud in Brazil is by far the most prestigious in Latin America. The Genus market share has grown by 3% to 26% and the Group's bulls are consistently top of their rankings. In the coming year, the growth of the Latin American business will benefit from the better control now achievable following the acquisition in March of the business of Genus' exclusive agent in Chile. We assisted the US State Department in its representations to the Japanese Agricultural Ministry and this eventually resulted in the removal of the tariff and trade protection measures introduced by the Japanese Government in the summer of 2003 with the result that trading is now back to normal. Elsewhere in the world, prospects remain sound for next year, although there is still some uncertainty in Australia over the speed at which farmers will be able to rebuild their herds. As recently announced, the proposed regional acquisition of Supersires Ltd in the UK will provide synergy benefits from product substitution after the cost of integration has been absorbed. Whilst 2003/4 was an exceptionally difficult and unpredictable year, we expect 2004/5 to be more settled and to herald the return of the historically good progress for the Group's principal business in Bovine Genetics. We expect both Animal Health and Development Consulting to continue to grow at historical rates. Richard Wood, Chief Executive Finance Director's Review Results As is discussed more fully in the Chief Executive's review, 2003/4 was a year in which the Group delivered sales growth and record profit before tax despite adverse market conditions. Operating profit before exceptional items and amortisation of goodwill increased by 5% to £10.9m. The Bovine Genetics division returned reduced operating profit for the reasons discussed in the Chief Executive's report, though even in the difficult trading conditions, sales grew by 2.1%. The Consultancy business increased operating profit before goodwill amortisation and exceptional items on continuing operations by £0.2m to £0.8m following the restructuring in March 2003. The Animal Health business improved operating profit before goodwill amortisation by 69% to £1.6m. The interest charge of £1.3m was slightly down on the prior year. Net debt has been substantially reduced by £4.7m to £7.5m at the year end as a result of strong cash inflow in the second half of the year. During the year the group sold a number of properties for £1.1m realising a profit of £0.7m. Profit before tax increased by £3m to £8.1m (2003: £5.1m). The tax charge only rose by £0.5m from £2.3m to £2.8m due to a reduction in the requirement to provide for deferred taxation on timing differences and the effects of providing for impairments of purchased goodwill in the prior year. Accordingly, the tax rate on profit before tax was 34% (2003: 45%). Earnings per Share and Dividends The basic earnings per share increased by 87% to 15.5 pence (2003: 8.3 pence). The Board has recommended an 18% increase in the dividend to 6.5 pence per share (2003: 5.5 pence per share). This dividend is covered 3 times by underlying earnings (2002: 4 times). The Board continues to take the view that splitting the dividend between interim and final payments is inappropriate, owing to the administrative cost of generating and posting some 28,000 dividend cheques. The dividend will be paid on 18 August 2004, one week earlier than in previous years. Financing and Cash Flow Net debt reduced from £12.2m to £7.5m during the year, a reduction of £4.7m. The principal components of this reduction are set out in the table below: £m Net Cash Flow from Operations 14.4 Interest Paid (1.3) Tax Paid (2.5) Proceeds from disposal of properties 1.1 Dividends Paid (1.9) Acquisitions (1.2) Capital Expenditure (net of other asset disposals) (3.6) Issue of Share Capital 2.4 Foreign Exchange Differences (2.6) Other Movements (0.1) Movement in Net Debt 4.7 Treasury The Group has a centralised treasury function to manage foreign exchange and interest rate risk following guidelines laid down by the Board. Derivative instruments are used solely to mitigate these risks. The Group's borrowings are of three principal types: • Bank borrowings, provided by Barclays Bank PLC • Finance Leases and Hire Purchase contracts, which are used to finance the acquisition of certain fixed assets • Loan notes, originally issued on the acquisition of VDC plc The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and these policies are summarised below. Interest Rate Risk The Group borrows principally in US Dollars, Australian Dollars and Sterling. Interest rate swaps may be used to generate the desired interest profile and to manage exposure to interest rate fluctuations. At the year end, no such swaps were in place. Liquidity Risk The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, bank loans, loan notes and finance leases. At the year end, 94% of the group's borrowings excluding overdrafts were due to mature within one year and 5.7% between one and two years. During the year, surplus funds were used to pay down all external US Dollar borrowings. Short term flexibility is achieved through overdraft facilities, a bank multi-option facility to cover bank guarantees, borrowings and other items of £15m and a bank revolving credit facility of £10m which is available until 30th September 2005. At 31st March 2004, the Group had not drawn on the revolving credit facility. Foreign Currency Risk The Group is exposed to two principal types of foreign exchange risk: - transaction risk and translation risk. Transactional exposures arise from operating units selling and/or purchasing goods and services in currencies other than their reporting currency. Where these exposures are large or other than short term, they are typically hedged by the use of forward contracts. Translation exposure arises on the retranslation of overseas subsidiary companies' profits and net assets into sterling for financial reporting purposes. Retranslation of overseas profits is not hedged, while retranslation of overseas net assets may be hedged by borrowings in the currency of those net assets where the exposure is perceived to be material to the Group's net assets. At the year end, the Group had borrowings in Australian dollars and US dollars partially hedging the retranslation of its net investment in those currencies. Pensions Genus's largest pension scheme is the Milk Pension Fund, a UK-based defined benefit scheme which has a number of participating employers. Milk Marque Limited, the principal employer, has given notice of its intention to withdraw from the scheme. Negotiations are ongoing between the participating employers and the Scheme Trustees regarding the basis on which this withdrawal is to be effected. Under FRS 17, a snapshot of the value of the scheme's assets and liabilities at 31 March 2004 showed the Genus section of the scheme as having a market value of £94.8m representing 93% of accrued benefits. The last full actuarial funding valuation of the Milk Pension Fund was in March 2003, when the actuarial value of the assets was sufficient to cover 104% of the members' accrued benefits. Acquisition In March 2004, the Group acquired the trade and certain assets and liabilities of Agrotec ABS Ltda, a Chilean company, for a total consideration of £543,000. David Timmins, Group Finance Director AUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT for the Year Ended 31 March 2004 Notes Continuing Operations Discontinued Total Total Before Exceptional Operations 2004 2003 Exceptional Items Items £000 £000 £000 £000 £000 TURNOVER Continuing operations 183,710 - - 183,710 169,749 Discontinued operations - - - - 3,041 2 183,710 - - 183,710 172,790 Underlying operating profit/(loss) 2,3 11,359 (503) (436) 10,420 10,182 Amortisation of goodwill 3 (1,674) - (1,674) (1,805) OPERATING PROFIT/(LOSS) 2 9,685 (503) (436) 8,746 8,377 Of which: Continuing operations 9,685 (503) - 9,182 9,971 Discontinued operations - - (436) (436) (1,594) Continuing operations Profit on disposal of properties - 711 - 711 1,205 Profit on disposal of investment - - - - 34 Discontinued operations Loss on disposal of discontinued - - - - (3,179) operations Interest receivable and similar income 5 - - 5 62 Interest payable and similar charges (1,319) - - (1,319) (1,357) PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 8,371 208 (436) 8,143 5,142 Tax on profit on ordinary activities (3,135) 189 150 (2,796) (2,325) profit on ordinary activities after taxation 5,236 397 (286) 5,347 2,817 Minority interests - equity (74) - - (74) (63) PROFIT FOR THE FINANCIAL YEAR 5,162 397 (286) 5,273 2,754 Dividends on equity shares (2,306) (1,846) RETAINED PROFIT FOR THE YEAR 2,967 908 Earnings per share - underlying 3 19.5p 22.2 p - basic 3 15.5p 8.3 p - diluted 3 15.3p 8.1 p Dividend per share 6.5p 5.5p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2004 2003 £000 £000 Profit for the financial year 5,273 2,754 Exchange difference on the re-translation of net assets of subsidiary undertakings (4,772) (1,633) Exchange difference on borrowings 607 (889) Tax on exchange differences - 254 --- --- Total recognised gains and losses relating to the year 1,108 486 AUDITED CONSOLIDATED BALANCE SHEET for the Year Ended 31 March 2004 2004 2003 FIXED ASSETS £000 £000 Intangible assets 25,875 28,147 Tangible assets 15,876 16,851 Investments 241 83 ----------- ----------- 41,992 45,081 ----------- ----------- CURRENT ASSETS Stocks 16,233 17,640 Debtors 32,456 32,177 Cash at bank and in hand 4,330 6,831 ----------- ----------- 53,019 56,648 CREDITORS: amounts falling due within one year 44,990 47,636 ----------- ----------- NET CURRENT ASSETS 8,029 9,012 ----------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 50,021 54,093 CREDITORS: amounts falling due after more than one year 605 5,759 PROVISIONS FOR LIABILITIES AND CHARGES 681 623 ACCRUALS AND DEFERRED INCOME 30 32 EQUITY MINORITY INTERESTS - 222 ----------- ----------- NET ASSETS 48,705 47,457 ----------- ----------- CAPITAL AND RESERVES Called up share capital 3,536 3,357 Share premium account 36,975 34,708 Profit and loss account 8,194 9,392 ----------- ----------- EQUITY SHAREHOLDERS' FUNDS 48,705 47,457 ----------- ----------- AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 March 2004 2004 2003 Note £000 £000 NET CASH INFLOW FROM OPERATING ACTIVITIES 4 14,393 13,454 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received and similar income 5 62 Interest paid and similar charges (1,028) (1,180) Interest element of finance lease and hire purchase rental payments (291) (177) ---------- ---------- NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (1,314) (1,295) ---------- ---------- TAXATION Corporation tax paid (1,374) (991) Overseas tax paid (1,168) (646) ---------- ---------- (2,542) (1,637) ---------- ---------- CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets (3,986) (6,005) Payments to acquire investments (158) - Receipts from sales of tangible fixed assets 1,625 4,693 Receipts from sales of investments - 34 ---------- ---------- NET CASH OUTFLOW ON CAPITAL EXPENDITURE (2,519) (1,278) ---------- ---------- ACQUISITIONS AND DISPOSALS Purchase of subsidiaries and businesses (1,234) (4,838) Net cash acquired - 42 Receipts from sale of subsidiaries - - Net cash and bank overdrafts disposed of - - ----- ----- (1,234) (4,796) ----- ----- EQUITY DIVIDENDS PAID (1,853) (1,576) ----- ----- NET CASH INFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING 4,931 2,872 ----------- ---------- AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (continued) for the year ended 31 March 2004 2004 2003 Note £000 £000 NET CASH INFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING 4,931 2,872 ----- ------ FINANCING Repayment of loan notes (979) (835) New bank loans 378 - Repayment of bank loans (6,133) (3,541) Finance leases 160 2,382 Repayments of capital element of finance leases and hire purchase rental payments (997) (920) Issue of ordinary share capital 2,446 602 ---------- ----------- - NET CASH OUTFLOW FROM FINANCING (5,125) (2,312) ---------- ----------- - (DECREASE)/INCREASE IN CASH 5 (194) 560 ---------- ----------- - ANALYSIS OF CHANGES IN NET DEBT DURING THE YEAR Reconciliation of net cash flow to movement in net debt: 2004 2003 Note £000 £000 (Decrease)/increase in cash in year (194) 560 Cash inflow from short term deposits - - ---------- ----------- - (194) 560 Repayment of loan notes 979 835 New long term loans (378) - Repayment of bank loans 6,133 3,541 New finance leases (160) (2,382) Repayment of capital element of finance lease contracts 997 920 ---------- ----------- - Change in net debt resulting from cash flows 7,377 3,474 Exchange differences (2,639) (24) Other - (219) ---------- ----------- - Movement in net debt 4,738 3,231 Net debt at 1 April 2003 (12,196) (15,427) ---------- ----------- - Net debt at 31 March 2004 5 (7,458) (12,196) ---------- ----------- - 1. BASIS OF PREPARATION The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2004 or 2003 (but is derived from those accounts). Statutory accounts for 2003 have been delivered to the registrar of companies, and those for 2004 will be delivered following the company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. The Annual Report and Notice of Annual General Meeting will be posted to the shareholders by the end of June 2004. This preliminary announcement was approved by the Board on 3 June 2004. 2. TURNOVER AND SEGMENTAL ANALYSIS Turnover, which is stated net of value added tax and overseas sales taxes, represents amounts invoiced to third parties. Underlying Turnover operating profit* Net assets 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 Area of activity Bovine Genetics 80,650 79,002 10,064 11,198 42,648 38,000 Consultancy 22,657 23,930 328 (442) 127 6,554 Animal Health 80,438 69,955 1,624 962 17,770 18,329 ------ ------ ------ ------ ------ ------ 183,745 172,887 12,016 11,718 60,545 62,883 Inter-segmental sales (43) (97) - - - - Unallocated 8 - (1,596) (1,536) (11,840) (15,426) ---- ---- ---- ---- ---- ---- 183,710 172,790 10,420 10,182 48,705 47,457 ---- ---- ---- ---- ---- ---- *before amortisation of goodwill The results of the discontinued businesses in the year, included above, are tabulated separately below. Operating profit 2004 2003 £000 £000 Area of activity Bovine Genetics 9,145 10,317 Consultancy 297 (642) Animal Health 900 238 ---- ---- 10,342 9,913 Unallocated (1,596) (1,536) ---- ---- 8,746 8,377 Non-operating exceptional items Bovine Genetics 711 1,266 Consultancy - (3,179) Animal Health - (61) Unallocated - 34 Net interest (1,314) (1,295) ---- ---- Profit on ordinary activities before taxation 8,143 5,142 ------ ------ TURNOVER AND SEGMENTAL ANALYSIS (CONTINUED) Geographical region of origin Turnover Operating profit Net assets 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 United Kingdom 141,308 131,421 5,593 4,099 41,481 40,820 Europe 6,687 6,231 1,019 1,196 2,742 1,854 North America 34,749 37,128 3,126 3,947 13,408 15,793 Rest of the World 10,026 6,552 604 671 2,914 4,416 ------ ------ ------ ------ ------ ------ 192,770 181,332 10,342 9,913 60,545 62,883 Inter-segment sales (9,060) (8,542) Unallocated - - (1,596) (1,536) (11,840) (15,426) ------ ------ ------ ------ ------ ------ 183,710 172,790 8,746 8,377 48,705 47,457 ------ ------ ------ ---- Non-operating exceptional items 711 (1,940) Net interest (1,314) (1,295) ---- ---- Profit on ordinary activities before taxation 8,143 5,142 ---- ---- Geographical region of destination Turnover 2004 2003 £000 £000 United Kingdom 116,473 107,217 Europe 19,953 17,077 North America 22,721 25,248 Rest of the World 24,563 23,248 ---- ---- 183,710 172,790 ---- ---- Unallocated costs within operating profit are common corporate costs. Unallocated net liabilities comprise: 2004 2003 £000 £000 Fixed assets and investments 241 533 Debtors 185 961 Creditors (240) (577) Net Debt (7,458) (12,196) Taxation (2,269) (2,079) Proposed dividends (2,299) (1,846) Minority interest - (222) ---- ---- (11,840) (15,426) ---- ---- TURNOVER AND SEGMENTAL ANALYSIS (CONTINUED) The segmental analysis includes the following results from discontinued activities: Geographical region of origin Region of destination Turnover Operating loss Turnover 2004 2003 2004 2003 2004 2003 £000 £000 £000 £000 £000 £000 United Kingdom - 2,430 (436) (1,498) - 1,237 Europe - - - - - 160 North America - 611 - (96) - 1,116 Rest of the World - - - - - 528 ---- ---- ---- ---- ---- ----- - 3,041 (436) (1,594) - 3,041 ---- ---- ---- ---- ---- ----- Operating loss for 2003 includes amortisation of goodwill of £169,000. Area of Activity Turnover Operating loss 2004 2003 2004 2003 £000 £000 £000 £000 Consultancy - 3,041 (436) (1,594) ---- ---- ---- --- No significant turnover or profits arose from the business acquired in Chile on 24 March 2004. 3. EARNINGS PER SHARE The basic earnings per share of 15.5p (2003: 8.3p) is based on the profit for the financial year of £5,273,000 (2003: £2,754,000) and the weighted average number of ordinary shares in issue of 34,051,042 (2003: 33,322,000). The underlying earnings per share of 19.5p (2003: 22.2p) is based on the earnings of continuing operations before amortisation of goodwill and exceptional items as set out below: 2004 2003 £000 £000 Profit for the financial year 5,273 2,754 Add: Amortisation of goodwill 1,674 1,805 Exceptional operating items 503 247 (Profit) on disposal of investment - (34) Loss/(profit) on disposal of properties and businesses (711) 1,974 Loss on discontinued operations 436 1,425 ---- ---- 7,175 8,171 Less: Associated taxation on adjustments (539) (775) ---- ---- Underlying earnings 6,636 7,396 ---- ---- The directors consider that underlying earnings per share as calculated is an appropriate and consistent measure of the Group's performance. The diluted earnings per share of 15.3p (2003: 8.1p) is based on profit for the financial year of £5,273,000 (2003: £2,754,000) and on 34,488,843 (2003: 34,175,000) diluted ordinary shares as set out below: 2004 2003 000's 000's Basic weighted average number of shares 34,051 33,322 Dilutive potential ordinary shares: Employee share options 438 853 ---- ---- 34,489 34,175 ---- ---- 4. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES 2004 2003 £000 £000 Operating profit 8,746 8,377 Depreciation 3,636 3,435 Amortisation of milk quota 8 7 Amortisation of goodwill 1,674 1,805 Loss/(profit) on disposal of fixed assets 183 (304) Deferred government grants (2) (1) Decrease/(increase) in stocks 1,558 (2,850) (Increase) in debtors (33) (2,555) (Decrease)/increase in creditors (1,377) 5,540 ----------- ----------- 14,393 13,454 Net cash inflow from operating activities ----------- ----------- 5. ANALYSIS OF CHANGES IN NET DEBT DURING THE YEAR At At 1 April Cash Foreign 31 March 2003 flows exchange 2004 £000 £000 £000 £000 Cash at bank and in hand 6,831 (1,542) (959) 4,330 Bank overdrafts (5,908) 1,348 (1,680) (6,240) ------ ------ ------ ------ Cash 923 (194) (2,639) (1,910) Bank loans (8,158) 5,755 - (2,403) Loan notes (2,616) 979 - (1,637) Obligations under finance leases and hire purchase contracts (2,345) 837 - (1,508) ---- ----- ----- ----- (12,196) 7,377 (2,639) (7,458) ---- ----- ----- ----- This information is provided by RNS The company news service from the London Stock Exchange

Companies

Genus (GNS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today