viewBenchmark Holdings PLC

Benchmark Holdings sees full-year results in line with market forecasts

Benchmark said it delivered against the strategic milestones it set for the period

The group announced a refinancing of its existing US$90mln credit facility

Benchmark Holdings PLC (LON:BMK) said it expects its full-year results to meet market estimates after delivering a 23% rise in adjusted earnings (EBITDA) in the first half.

The aquaculture health, nutrition and genetics firm posted adjusted EBITDA of £7.5mln for the first half on revenue of £78.3mln, up 3.4% on a year ago.

READ: Benchmark sees benefits of aquaculture research as revenues rise

Growth in the genetics, animal health and knowledge services businesses offset lower revenue in the advanced nutrition division, which was hit by weakness in the global shrimp market.

The adjusted EBITDA margin increased to 10% from 8%, boosted by the sale of higher value products, an increase in the value of biological assets and ongoing cost control.

Strategic milestones met 

Benchmark said it delivered against the strategic milestones it set for the period, including further trials of its next generation sea lice treatment and establishing a supply chain for the roll-out of the company's disease resistant shrimp in Asia, where trials continue to show “significant commercial potential”.

The company has been working to improve its performance by reallocating capital, reducing costs, growing margins, prioritising research and development spend and exiting from non-core activities.

As part of efforts to streamline its advanced nutrition production facilities, the group sold a site in Asia as well as its lumpfish operations.

In the second half, the company inaugurated its salmon egg production facility in Norway.

Benchmark said a change of control at its genetics joint venture partner, AquaChile, has resulted in an opportunity to take over a breeding genetics facility owned by the venture and to pursue an independent strategy.

It expects its original equity investment in the venture will be returned to the company and will reinvest it in its genetics business in Chile in the “coming years”.

Full-year results to meet market forecasts

For the full year, the group expects the results to be in line with market forecasts despite “mixed conditions” in core markets with salmon benefitting from growing demand and stable prices but shrimp and sea bass/ bream being hit by depressed prices and lower sales following a temporary overstocking.

“This volatility is not unusual in our markets and we are monitoring it closely,” Benchmark said.

The group also announced a refinancing of its existing US$90mln credit facility to provide it with additional covenant flexibility and headroom to support the roll-out of products, including its next generation sea lice treatment and disease resistant shrimp.

A NOK 850m (USD $95mln equivalent), four-year senior secured floating rate listed bond issue has been proposed, along with a US$15mln revolving credit facility with DNB Bank ASA.

Quick facts: Benchmark Holdings PLC

Price: 34 GBX

Market: AIM
Market Cap: £226.9 m

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