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Benchmark Holdings looks to make splash with transformational new products

Snapshot

  • Huge potential for aquaculture as the world's population grows but sea fish numbers fall
  • New products to be launched that provide environmentally friendly treatments
  • In 2020 raised £43mln to take new products to market 
salmon

Quick facts: Benchmark Holdings PLC

Price: 30 GBX

AIM:BMK
Market: AIM
Market Cap: £200.28 m
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What Benchmark Holdings does

Benchmark Holdings PLC (LON:BMK) has three core divisions, breeding and genetics – which includes characteristics such as disease resistance, production efficiency and product quality.

The Advanced Nutrition divison specialises in feeding the young animals including probiotics to get through the early life stages, while Animal Health tackles serious issues such as sea lice in fish farming.

In 2019 progress was made towards the launch of BMK08, a next-generation sea lice treatment, and CleanTreat, which removes medicinal residues from treatment water and has broader industry-wide applications as well as being integral to the commercial delivery of BMK08.

The company believe the combined products have the potential to be transformational for the industry, providing a solution with "zero environmental impact to one of the industry's biggest challenges".

Knowledge Services, the fourth leg, is the smallest and includes aquaculture veterinary consulting services, data services, education and training.

 

How it's doing

In February 2020, Benchmark raised a gross £6.6mln via an open offer, completing a planned £43mln fundraise at a price of 40p to fund the commercial development of its CleanTreat system and BMK08.

In a January statement, the group said the new funds will allow the CleanTreat platform to get to market faster ahead of the anticipated BMK08 regulatory approval and allow Benchmark to retain full ownership of the platform.

Around £19mln of the proceeds will be used to fund the commercial development of CleanTreat to support the launch of BMK08 and £16mln will be used to provide additional working capital to fund the continuing business and strategy until the proceeds from planned disposals are received.

Capital will then be released to fund the company's SPR shrimp roll-out and new species programmes.

Last year saw a change in direction, as existing products were impacted by adverse conditions in the shrimp and seabass/seabream markets, which significantly affected Advanced Nutrition. 

This sparked a restructuring process, which will involve disposals and discontinuation of non-core activities, which primarily includes businesses in the Knowledge Services division and veterinary services in Animal Health.

Revenues for the year to 30 September came out at £127.3mln, down 3% on the prior year, while underlying profits (EBITDA) from continuing operations were £12.1mln versus £19.1mln the year before.

 

What the boss says, executive chairman Peter George

"We are preparing to launch BMK08, our novel medicinal treatment to combat sea lice, one of the main biological challenges in salmon farming," Peter George said in January 2020.

“This requires scaling up CleanTreat, our proprietary system that removes medicinal residues from treatment water, and which is integral to the delivery of BMK08." 

He added: “I am pleased that existing and new shareholders have placed their confidence in us to drive Benchmark to finally deliver on its enormous potential. The actions we will take in 2020 will deliver a profitable business, leading the future direction in key areas of sustainable aquaculture."

 

Inflexion points

  • Launch and ramp-up of CleanTreat
  • BMK08 regulatory approval
  • Recovery of shrimp and seabass markets 

 

 

Blue Sky

Fundamentals remain firmly in the company’s favour:

The fishing industry has just about reached the limit of what it can catch in the sea and might even be in decline

Seafood is increasingly acknowleged as an essential component of healthy diets

The growing middle-classes in the southern hemisphere, traditionally a fish-eating culture, are spending ever more

A growing global population needs more food to be produced from the water

 

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