Benchmark, the aquaculture health, genetics and specialist nutrition business, is pleased to provide the following trading update for the year ended 30 September 2018.
Highlights:
Significant growth in revenues and underlying profit ahead of market expectations*:
· Revenues above £150m (unaudited) (2017: £140.2m), a growth of c.7%
· Adjusted EBITDA** above £16.5m (2017: £10.0m), a growth of 65%
*Company compiled consensus of revenues of £156m and EBITDA of £15.8m
**Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure
Trading
2018 was a successful year for Benchmark with underlying earnings ahead of market expectations and delivery of strategic projects that will drive future growth and profitability. In addition, during the period, the Company strengthened its Board and management team and implemented a new operational structure that has significantly enhanced integration and development of synergies across the Group.
Our results reflect strong performances in Advanced Nutrition and Genetics driven by increased sales of our innovative products, and very encouraging progress in AquaHealth:
· In Advanced Nutrition, earnings growth was driven by sales of our premium specialist diets for shrimp and sea bass and sea bream. Our increased trading required a higher level of working capital, a feature of our growing business.
· In Genetics, our investment in developing disease resistant salmon eggs has translated into our continued market penetration and growth, with demand for our sea lice resistant eggs outstripping supply. Our recently completed Salten facility is designed to address this demand and allow for further growth.
· In Health, the Group achieved significant milestones towards the full commercial launch of Ectosan Cleantreatâ, our next generation sea lice treatment. We have now conducted 14 very successful trials in Norway with three of the world's leading salmon producers showing 100% efficacy and no environmental impact. Sea lice continues to be the single largest recognised challenge in the salmon industry, and feedback from customers point to the potential for broad adoption of our solution.
Progress on Strategic Projects
During the period we concluded and progressed a number of strategic projects which underpin future growth and place us in a stronger position to capture the large opportunities in our markets. These projects included:
· Chile JV – In June, we announced a JV with AquaChile, the largest salmon producer in Chile, toaccelerate and de-risk Benchmark's strategy in Chile, the world's second largest salmon market. The JV, which was immediately earnings enhancing, is progressing well with team integration complete and operational progress as planned.
· Salten – in September we announced commencement of production at Salten, our new state of the art, bio-secure, salmon egg production facility in Norway. It increases Benchmark's in-house production capacity by 75%, enables an increase in our ability to deliver year-round supply of salmon eggs, an important advantage in the market, and is expected to enhance profitability.
· Additionally, we have reviewed our operations and pipeline of new products which resulted in the re-prioritisation of R&D spend and the rationalisation of certain non-core activities, including closure of two sites in our veterinary services business and disposal of certain technical titles in our publishing business.
Outlook
Market conditions in our core salmon and shrimp markets remain favourable and the outlook is positive, with strong demographic and sustainability drivers, and an increasing trend towards professionalisation and consolidation amongst customers. This, combined with an increasing recognition of the role that our innovative products can play in boosting yield, quality and sustainability, provides us with confidence in the future outlook.
Notice of Results
Benchmark will announce its full year results for the year ended 30 September 2018 on Thursday, 24 January 2019. An analyst meeting will be held on that day at 9.30am at the offices of MHP Communications, 6 Agar Street, London WC2N 4HN. To register your interest, please contact benchmark@mhpc.com.
Malcolm Pye, Chief Executive of Benchmark, said:
“We performed well during the year. We have delivered revenue and profit growth, while undertaking significant strategic projects that have enhanced our position in our key markets and provide a strengthened platform for the future.
“This together with the continued progress in our pipeline and corporate structure leaves us well placed to address the significant opportunities in our markets, which have stronger drivers than ever before amid increasing recognition from consumers, producers and regulators of the need for sustainable aquaculture solutions.”