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Benchmark Holdings Plc - Second Quarter and Interim results

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Benchmark Holdings plc

("Benchmark", the "Company" or the "Group")

Second Quarter and Interim results for the six months ended 31 March 2021

Good performance in the first half of the year and strategic progress in all business area

Benchmark (LSE: BMK), the aquaculture biotechnology company, announces its unaudited interim results for the six months ended 31 March 2021 (the "Period"). The Company also announces its unaudited results for the three months ended 31 March 2021 in compliance with the terms of its senior secured bond.

  • Good H1 2021 performance with growth in revenues (+11% CER) and Adjusted EBITDA (+13% CER) reflecting a strong performance in Advanced Nutrition and solid trading in Genetics and Health
  • Q2 2021 results reflect seasonal fluctuations in Genetics and a lower contribution from biological asset movements due to normalised biomass growth
  • Significant progress towards commercialisation of BMK08 and CleanTreat® with first customer contracts and ratification of MRL ("Maximum Residue Level") opinion achieved in Q2
  • Positive outlook and trading in line with market expectations, with good visibility of revenues for the second half of the year

£m

 

H1 2021

H1 2020

Restated*

CER**

H1 2021

 

Q2 2021

Q2 2020

Restated*

Revenue from continuing operations

59.5

56.2

62.3

30.4

31.5

Adjusted

 

 

 

 

 

Adjusted EBITDA1 from continuing operations

7.9

7.7

8.7

4.9

7.3

Adjusted EBITDA excluding biological asset movements

6.0

5.1

6.7

4.2

5.9

Adjusted Operating profit2

4.4

4.6

5.2

3.2

5.7

Statutory

 

 

 

 

 

Operating (loss)/profit

(4.6)

(3.9)

 

(1.4)

1.7

Loss before tax from continuing operations

(3.3)

(13.4)

 

(2.7)

(10.3)

Loss for the Period - total incl. discontinued operations

(3.1)

(18.8)

 

(2.8)

(13.4)

Basic loss per share (p)

(0.57)

(3.25)

 

(0.46)

(2.18)

Net debt3

56.5

55.8

 

56.5

55.8

Net debt excluding lease liabilities

42.5

46.4

 

42.5

46.4

 H1 2020 and Q2 2020 numbers have been restated to reflect changes to the ongoing continuing business since the previous reporting date (note 5).

** Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure.

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

(3) Net debt is cash and cash equivalents less loans and borrowings. 

Divisional summary (Continuing and discontinued operations)

£m

 

H1 2021

H1 2020

Restated*

CER**

H1 2021

 

Q2 2021

Q2 2020

Restated*

CER**

Q2 2021

Revenue

 

 

 

 

 

 

Advanced Nutrition

35.0

31.3

36.7

19.9

19.9

21.1

Genetics

22.1

22.5

23.3

9.5

10.4

9.7

Animal Health

2.3

2.5

2.3

1.0

1.4

1.0

Adjusted EBITDA1

 

 

 

 

 

 

Advanced Nutrition

6.2

3.4

6.6

5.2

3.7

5.6

Genetics

6.0

8.6

6.4

2.1

5.2

2.1

-  Net of fair value movements in biological assets

4.0

6.0

4.4

1.4

3.8

1.5

Animal Health

(2.6)

(2.7)

(2.6)

(1.4)

(0.8)

(1.4)


*  H1 2020 and Q2 2020 numbers have been restated to reflect changes to the ongoing continuing business since the previous reporting date (note 5).

**  Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates.

(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure.

Advanced Nutrition  

  • H1 2021: revenue 12% up (+17% CER) reflecting the success of improved commercial effort and improvement in certain shrimp markets

H1 2021: Adjusted EBITDA 82% up (+93% CER) as a result of revenue growth and reduced operating costs

Q2 2021: revenue in line with prior year (+7% CER) and Adjusted EBITDA 41% up (+51% CER)

Genetics  

H1 2021: revenue marginally below prior year but ahead on a constant currency basis (+3% CER) with higher salmon egg sales (+5%) offset by lower revenue from harvested fish and royalties; drop in Adjusted EBITDA against prior year reflects lower contribution from fair value movements in biological assets due to normalised biomass growth

Q2 2021: revenue down due to seasonal fluctuations affecting the timing of egg deliveries against prior year and lower royalty income. Adjusted EBITDA reflects lower sales and lower contribution from fair value movements in biological assets

Good visibility of revenues for H2 2021

Animal Health  

H1 2021: revenue and Adjusted EBITDA in line with prior year

Q2 2021: lower revenue and Adjusted EBITDA reflect normalised sales against the same period in the prior year which benefitted from customer stockpiling due to Covid-19 uncertainty

Significant progress towards commercialisation of new sea lice treatment BMK08 and CleanTreat â - first customer agreements signed and ratification of MRL opinion achieved in Q2 2021

Cash generation; liquidity and net debt

  • H1 2021 operating cash outflow of £1.5m including £7.2m from increase in working capital in line with expectations; net cash outflow of £17.3m includes £9.1m outflow from investing activities in the period and a £6.8m outflow from financing activities
  • Liquidity (defined as cash and undrawn facility) as at 14 May 2021 was c.£62.5m (30 September 2020: £83.2m) against a liquidity covenant of £10m
  • Net debt at the half year end was £56.5m (30 September 2020: £37.6m), including lease obligations of £14.0m (30 September 2020: £10.4m)

Good strategic progress

  • Significant progress towards commercialisation of new sea lice treatment BMK08 and CleanTreat â - first customer agreements signed and EU ratification of MRL opinion achieved in Q2
  • Land based salmon farming - new customer wins with selected clients building a leading position in genetics
  • Construction of new incubation centre in Iceland to increase genetics capacity progressing as planned
  • SPR shrimp - Expansion of breeder capacity in Fellsmere progressing as planned, test market ongoing and construction of multiplication centre in Thailand advancing after delays caused by Covid-19
  • "One Benchmark"- further actions undertaken to integrate the Group and streamline the organisation including co-location of Genetics and Health activities in Norway and Chile
  • ESG (Environmental Social and Governance) continues to be an important focus through the positive impact of our products and solutions on the sustainability of aquaculture, and through our commitment as a responsible operator to reduce greenhouse gas emissions and improve the sustainability of our supply chain

Current trading and outlook

  • Current trading in line with management expectations with good visibility of revenues for the second half of the year
  • Progress towards commercialisation of BMK08 & CleanTreat â , subject to marketing authorisation in Norway

Trond Williksen, CEO, commented:

"Benchmark has performed well in the first half and has made good strategic progress across our three business areas. This reflects our successful restructuring and the new focus and discipline on delivering on our strategic priorities to create profitable growth.

"Our financial discipline including cost containment and strict cash management enables us to invest selectively in our core business, strengthen our position in our markets and deliver on the growth opportunities ahead.

"As a leading aquaculture biotechnology company focused on delivering sustainable solutions, we are well positioned to make a positive impact on our industry and create value for all our stakeholders."