Benchmark Holdings PLC (LON:BMK) said full-year adjusted underlying earnings (EBITDA) from continuing operations are expected to be around £11mln-£12mln, in line with expectations.
The maintained guidance will come as a relief to shareholders after the aquaculture health, nutrition and genetics company warned in August of “challenging” conditions in the shrimp and sea bass/ bream markets.
Benchmark said that underlying adjusted EBITDA from current operations in the current financial year is expected to be on a par with the figure for the financial year just ended, as the outlook for the hard-hit shrimp and sea bass/sea bream markets remains gloomy, although some recovery is expected in 2019 and 2020.
On the plus side, the outlook in the salmon market remains positive.
Revenues from continuing operations for the year to the end of September 2019 are expected to be in the region of £127mln, down by about 3% from the previous year’s £131.6mln.
Net debt at the end of the financial year was £87.1mln, compared to debt of £55.7mln a year earlier. The increase in debt was as a result of increased investment in research and development (R&D) - particularly the next generation sea lice treatment – and an increase in working capital.
Free cash outflow in the year narrowed to around £24mln from an outflow the previous year of £36.1mln.
The company, which is selling off non-core activities, said it expects to maintain sufficient liquidity to execute its product development programme and support its continuing operations thanks to its programme of disposals and cost reductions.
Benchmark revealed that a write-down in the value of intangible and tangible assets in the fiscal year just ended is expected to be in the range of £45mln-£55mln as a result of a reduction in forecasts in the Advanced Nutrition division due to material change in market outlook and the exit from some non-core activities.
"It is disappointing to report a performance which is below that expected at the beginning of the financial year largely due to market conditions in Advanced Nutrition,” conceded executive chairman, Peter George.
"Following the management changes announced in August, the company has accelerated its programme of efficiencies including the disposal and exit from non-core businesses and the implementation of a cost-saving plan,” he added.
Restructuring and management changes are expected to result in exceptional charges in the fiscal year just ended and the current financial year.
George said that during the year the group made good progress towards the launch of product candidate BMK08, its next-generation sea lice treatment. The group believes that this product, together with its co-dependant purification technology CleanTreat, has the potential to be transformational for the industry, delivering a solution with zero environmental impact.
"The company is considering the optimal strategy to take CleanTreat from trial to commercial-scale given its importance to product candidate BMK08 and its broader industry-wide applications,” George revealed.
"The market has a growing need for solutions that improve the sustainability of food production in aquaculture. Benchmark's focus on delivering products and solutions that improve animal health and welfare, and that reduce environmental impact, positions it as a leader in improving sustainability standards in aquaculture,” George declared.