Coronavirus Update

Benchmark Holdings Plc - Q3 Results 2020

This content has been sourced from: https://www.investegate.co.uk/benchmark-hlgs-plc--...

£m

Q3 FY20

Q3 FY19

YTD

Q3 2020

YTD

Q3 2019

FY2019

Restated*

Adjusted

 

 

 

 

 

Revenue from continuing operations

24.5

22.8

81.6

90.1

126.8

Adjusted EBITDA2 from continuing operations

0.3

(1.4)

3.2

5.9

13.5

Adjusted operating (loss)/profit

(1.5)

(3.0)

(2.3)

1.3

5.5

Exceptional items

(0.6)

(0.1)

(0.7)

(0.1)

(0.6)

EBITDA1 from continuing operations

(0.2)

(1.5)

2.4

5.9

13.0

Statutory

 

 

 

 

 

Loss before tax from continuing operations

(8.5)

(12.0)

(27.4)

(18.2)

(69.2)

Loss from continuing operations

(8.0)

(11.7)

(27.2)

(18.7)

(69.9)

Loss - total incl. discontinued operations

(4.4)

(12.5)

(23.2)

(21.6)

(83.1)

Basic loss per share (p)

(0.66)

(2.24)

(3.83)

(3.95)

(15.03)

Net debt4

(54.7)

(78.3)

(54.7)

(78.3)

(87.1)

 

(1) EBITDA is earnings/(loss) before interest, tax, depreciation and amortisation and impairment.

(2) Adjusted EBITDA is EBITDA1, before exceptional items and acquisition related expenditure.

(3) Adjusted Operating Profit is operating loss before exceptional items including acquisition related items and amortisation of intangible assets excluding development costs.

(4) Net debt is cash and cash equivalents less loans, borrowings and lease obligations excluding balances held for sale. Net debt includes £8.6m (Q3 2019: £nil; FY2019: £nil) relating to operating lease obligations which are now held on balance sheet following the adoption of IFRS 15 (note 15).

* FY2019 numbers have been restated to reflect changes to the ongoing continuing business since the year end (note 5). Q3 2019 and YTD Q3 2019 figures have not been previously reported and so are not restated.

 

Divisional summary (Continuing and discontinued operations)

 

£m

 

Q3 FY20

 

Q3 FY19

YTD Q3

2020

YTD Q3

2019

 

FY 2019

Revenue

 

 

 

 

 

Advanced Nutrition

16.0

13.6

47.3

54.5

76.8

Genetics

7.2

7.1

29.7

29.7

39.7

Animal Health

2.7

4.0

9.4

11.1

17.7

Adjusted EBITDA2

 

 

 

 

 

Advanced Nutrition

2.8

1.4

6.1

10.9

15.4

Genetics

1.2

0.8

9.8

5.7

10.1

Animal Health

(2.8)

(3.2)

(10.5)

(9.4)

(10.2)

 

(1) EBITDA is earnings/(loss) before interest, tax, depreciation and amortisation and impairment.

(2) Adjusted EBITDA is EBITDA1, before exceptional items and acquisition related expenditure.

 

Q3 Overview

 

Financial Performance

· Revenues from continuing operations were 8% ahead of the prior year resulting from:

o  Continued good performance in Genetics with revenues in line with the prior year

o  Higher revenues in Advanced Nutrition which benefitted from a partial catch-up of delayed orders as a result of Covid-19

o  Lower revenues in Animal Health below Q3 2019 with the comparable period benefitting from revenues derived from BMK08 trials

· Adjusted EBITDA from continuing operations was £0.3m against a £1.4m loss in in Q3 2019 reflecting higher revenues, higher margins in Genetics as external production moves in-house, and a reduction in operating costs and R&D expenses from measures taken during Covid-19

· YTD Q3, Group revenues from continuing operations were 9.4% below the prior year and Adjusted EBITDA from continuing operations was £3.2m, £2.7m below the prior year. The decrease reflects the impact from weak shrimp markets which offset a strong performance in Genetics and an improvement in Animal Health driven by cost savings

· Pro forma net debt following post period end disposals reduced to £36m as at 27 August 2020

· Liquidity, following the disposals, of c.£84m (cash and available facility) as at 27 August 2020

Market environment and operational highlights

· The salmon industry continues to be resilient and the sea bass / bream market is relatively stable

· The shrimp market continues to be challenging as a result of Covid-19 lockdowns with low demand and prices, and major producing countries including India and Ecuador significantly affected

· BMK08/CleanTreat® on track for commercial launch in Q2 of calendar year 2021

· Trond Williksen joined as new CEO on 1 June 2020

Disposals and restructuring

· Disposal programme substantially complete raising up to £44m; five divestments in the period to date

o  Improve International to RJD Partners in June 2020 for up to £12.75m

o  FishVet to Zoetis in July 2020 for c. £14.5m

o  Vaccine manufacturing facility to Catapult Gene and Cell Therapy in July 2020 for net proceeds of £12m

o  Agreement to exit equine vaccine joint development programme in August 2020 for a £1m upfront consideration and up to £1m deferred

o  MBO of FAI Farms in August 2020 for a nominal sum

· Restructuring programme aiming to deliver £10m in annual savings from 2021 is well advanced following the sale of the vaccine manufacturing facility

Current trading and outlook

· Salmon industry remains resilient and sea bass/bream markets stable; however, conditions in the shrimp market continue to be challenging, and we expect these trends to continue in FY21

· Expect to deliver full year results in-line with market expectations

Trond Williksen, CEO, commented:

 

"We are very pleased with the significant progress made over the last few months towards the completion of the disposal of non-core assets and the cash proceeds generated. Following the restructuring we are well advanced to become a streamlined, financially strong business wholly focused on our core businesses: Genetics, Advanced Nutrition and Health. We continue to work on our restructuring programme which aims to deliver £10m in annual savings from FY21 taking us a step closer towards our goal of becoming sustainably profitable.

 

"While the shrimp market continues to experience challenges as a result of Covid-19 the salmon market which underpins our genetics and health businesses remains resilient and overall, we expect to deliver full year results in line with expectations."

 

Septima Maguire, CFO, commented:

 

"The completion of our disposal programme generating up to £44m, together with our ongoing cash conservation plan puts us in a strong financial position to remain resilient through the Covid-19 pandemic and to invest selectively in our business to deliver future growth."