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Benchmark heartened by progress towards launch of BMK08 in otherwise challenging year

Revenue from continuing operations of £37.0mln was 10% above the prior year (2018: £33.6mln) driven by strong growth in the Genetics division

Benchmark Holdings PLC -

Benchmark Holdings PLC (LON:BMK), the aquaculture solutions provider, said it saw an improvement in adjusted underlying earnings from continuing operations during the final quarter of its fiscal year

In a fourth-quarter results statement that reiterated most of the financial information in its trading update of three weeks ago, the company said adjusted underlying earnings (EBITDA) from continuing operations in the three months to the end of September rose to £7.5mln from £7.0mln the year before.

The loss before tax from continuing operations in the quarter was £53.7mln, compared to a loss the year before of £1.0mln, primarily as a result of a £44.8mln write-down in the value of acquired intangibles in the group’s Advanced Nutrition division.

Revenue from continuing operations of £37.0mln was 10% above the prior year (2018: £33.6mln) driven by strong growth in the Genetics division versus the same period last year.

Genetics reported revenue growth of 60% year-on-year to £10.0mln (2018: £6.2mln) as a result of higher salmon egg sales supported by the Salten facility coming onstream and the export ban of all salmon eggs from Norway. Adjusted EBITDA for the division was £4.3mln (2018: £3.3mln).

Advanced Nutrition delivered revenues of £22.3mln, up from £21.5mln the year before, as a result of higher GSL Artemia volumes, the launch of D-FENSE vibrio inhibiting Artemia in Vietnam and higher volumes in Health, partly offset by lower volumes of non-GSL eggs and lower Diets sales mainly in Greece.

Adjusted EBITDA for the division was 18% higher at £4.5mln (2018: £3.8mln) helped by one-off income from the settlement of infringement cases and the profit on disposal of a property in China, which together totalled £1.1mln.

Revenues in Animal Health (including the discontinued operations of veterinary and diagnostics) in the fiscal fourth quarter were £6.6mln, 13% below the prior year (2018: £7.6mln) as a result of a lower contribution from field trials that was partially offset by a higher toll manufacturing contribution (thanks to timing issues) and higher Salmosan sales.

The division made an adjusted underlying loss of £0.8mln, which was twice the level of the fourth-quarter loss the previous year.

Net debt at the end of the financial year was £87.1mln, compared to net debt of £55.7mln a year earlier, as a result of investment in research and development and an increase in working capital including that related to growth in biological assets in the new production facilities.

Year-end liquidity was £28.2mln, which was well below the banking covenant threshold.

As flagged in last month’s trading update, weakness in the shrimp and sea bass/sea bream markets continues and while some recovery is expected, it is unlikely to recover to 2018 levels in 2020, Benchmark said.

Overall, the company expects to deliver underlying adjusted EBITDA from continuing operations (before one-off other income) in the current year in line with the year just ended.

The board expects Benchmark to maintain sufficient liquidity to execute its product development programme and support its continuing operations after taking account of the expected timing and proceeds from the planned disposals and cost reductions.

“During the year the company made good progress towards the launch of BMK08 which, together with its co-dependent technology CleanTreat, has the potential to be transformational for the industry, delivering a solution with strong environmental and animal welfare credentials,” said Peter George, the executive chairman of Benchmark.

Quick facts: Benchmark Holdings PLC

Price: 28 GBX

Market: AIM
Market Cap: £186.86 m

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