Benchmark Holdings PLC (LON:BMK) is hopeful that a string of prospective licensing deals for its non-core animal vaccines will help to offset “challenging” conditions in the shrimp and seabass/ bream markets.
A record shrimp harvest in 2018 has forced Benchmark’s customers to cut production this year, which has knocked demand for its products, including its specialist fish feed, vaccines and water treatments.
The seabass/bream market, meanwhile, has been affected by the economic environment in Turkey – the world’s major producing country.
READ: Benchmark shrugs off challenging shrimp market to deliver earnings growth
More recently, the aquaculture health group has also seen a slowdown in income from trials of some of its pre-license pipeline products within in its Animal Health division.
To counterbalance these “short-term challenges”, Benchmark is actively progressing its “programme of operational and structural efficiencies”, which includes key commercial licensing deals for its non-core animal vaccines.
“If completed this financial year, [these deals] are expected to substantially offset the negative variance referred to above. However, there is a risk to the delivery of these deals within the current financial year.”
Although the revenue and profit mix has changed slightly, bosses remain confident in the business’ outlook.
“The board believes that the company is well-positioned in its markets and the opportunities for its existing products and those coming from its pipeline are strong. The company continues to progress delivery of its five-year strategy to drive future growth and profitability.”