TIDMBMK
RNS Number : 8484A
Benchmark Holdings PLC
03 June 2019
3 June 2019
Information within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulations
(EU) No. 596/2014.
Benchmark Holdings plc ("Benchmark" or the "Company")
Trading update, fixed income investor meetings and notice of
results
Benchmark, the aquaculture health, nutrition and genetics
business today provides the following trading update and announces
that it has mandated DNB Markets ("DNB") to arrange a series of
fixed income investor meetings in connection with the refinancing
of its existing $90m credit facility.
Trading update for H1 2019 and outlook
-- Good performance with 25% increase in adjusted EBITDA on revenues ahead by 3.4%
-- Progress towards the commercialisation of the Company's next
generation sea lice treatment and disease resistant shrimp
-- Implementation of structural efficiencies underway leading to
streamlining of production in Asia and of the lumpfish
operations
Benchmark delivered a good performance in the first half of the
year with growth in revenues, and an increase in the adjusted
EBITDA margin, resulting in strong adjusted EBITDA growth. Revenue
of GBP78.3m was 3.4% ahead of H1 last year driven by growth in
Genetics, Animal Health, and Knowledge Services, which more than
offset lower revenues in Advanced Nutrition as a result of weakness
in the global shrimp market.
Adjusted EBITDA of GBP7.5m was 23% ahead of H1 2018 reflecting
the contribution of higher value products, an increase in the value
of biological assets as a result of growing sales and increasing
capacity at the Company's new land based salmon egg facility in
Norway, as well as ongoing cost control. Adjusted EBITDA margin for
the period grew to 10% (H1 2018: 8%). Net debt at 31 March 2019 was
GBP65.5m.
The Company delivered against the strategic milestones 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. Post period end
the Company inaugurated its new state of the art, land based,
salmon egg production facility in Norway.
The Company's programme of structural and operational
efficiencies is underway to reallocate capital, reduce costs, grow
margins, prioritise R&D spend, and exit from non-core
activities. During the period the Company streamlined its Advanced
Nutrition production facilities in Asia resulting in the sale of a
site, and its lumpfish operations which resulted in closure of one
of its sites. Options for the Company's companion animal products
are still being evaluated, with the most likely outcome being the
establishment of a commercialisation partnership.
As announced on 29 May 2019, the change of control at AquaChile,
our genetics JV partner, has resulted in an opportunity for the
Company to take control of a breeding genetics facility currently
owned by the JV and to pursue an independent strategy. It is
envisaged that Benchmark's original equity investment will be
returned to Benchmark and that this will be reinvested in the
Company's genetics business in Chile in the coming years, leaving
the Company well placed to continue to build a strong local
presence in this important market.
Outlook
Conditions in the Company's core markets are mixed with salmon
benefitting from growing demand and stable prices, while in the
shrimp and sea bass/bream markets, a temporary overstocking has
resulted in depressed prices and a decrease in production levels
amongst our customers. This volatility is not unusual in our
markets and we are monitoring it closely.
The Company is making significant progress in the implementation
of its programme of structural efficiencies, and overall, we expect
the Group to deliver broadly in line with market expectations for
the full year.
Refinancing of credit facility
-- Proposed structure provides increased flexibility and
headroom through issue of a listed Nordic bond underwritten by DNB
and a revolving credit facility (RCF)
-- Opportunity to access a sector specialist investor base in
the Nordic region, with globally recognised public markets for
aquaculture
The Company has mandated DNB Markets to arrange a series of
fixed income investor meetings in connection with the refinancing
of its existing $90m credit facility. A NOK 850m (USD $95m
equivalent), 4-year senior secured floating rate listed bond issue,
may follow subject to inter alia market conditions. It is envisaged
that the refinancing will also include a $15m RCF to be provided by
DNB Bank ASA. The bond is being underwritten by DNB Bank ASA.
The purpose of the refinancing is to provide the Company with
additional covenant flexibility and headroom to operate efficiently
and continue to support the roll-out of its priority products
including its next generation sea lice treatment and disease
resistant shrimp while it concludes its programme of
efficiencies.
In connection with the meetings Benchmark will present the
following headline financial figures for H1 2019 and for the 12
months to 31 March 2019.
GBPm H1 2019 H1 2018 LTM 20193 FY 2018
Revenue 78.3 75.7 154.0 151.5
---------- -------- ---------- --------
Adjusted EBITDA1 7.5 6.0 18.5 17.0
---------- -------- ---------- --------
Loans and borrowings (89.4) (63.2) (89.4) (79.8)
---------- -------- ---------- --------
Cash and cash equivalents 23.8 21.9 23.8 24.1
---------- -------- ---------- --------
Net Debt2 (65.5) (41.3) (65.5) (55.7)
---------- -------- ---------- --------
Share based payments 0.8 0.9 1.4 1.5
---------- -------- ---------- --------
Expensed R&D costs 5.6 5.6 12.0 12.0
---------- -------- ---------- --------
Capitalised Development
costs 2.9 2.2 8.1 7.3
---------- -------- ---------- --------
PPE additions 3.7 12.9 15.9 25.1
---------- -------- ---------- --------
Intangible additions 3.1 2.3 8.4 7.5
---------- -------- ---------- --------
(1) Adjusted EBITDA is earnings before interest,
tax, depreciation, amortisation, exceptional items
and acquisition related expenditure
========
(2) Net debt is cash and cash
equivalents less loans and borrowings
======== ========== ========
(3) LTM 2019- is the last 12 months
- ie 12 months ended 31 March
2019
======== ========== ========
Segmental Revenue - GBPm H1 2019 H1 2018 LTM 2019 FY 2018
Animal Health 7.2 4.1 19.2 16.2
-------- -------- --------- --------
Genetics 22.6 21.0 37.4 35.8
-------- -------- --------- --------
Advanced Animal Nutrition 40.9 44.1 82.6 85.7
-------- -------- --------- --------
All other segments 8.3 7.5 16.6 15.8
-------- -------- --------- --------
Corporate 3.6 2.3 6.6 5.3
-------- -------- --------- --------
Inter-segment sales (4.3) (3.2) (8.3) (7.3)
-------- -------- --------- --------
Total 78.3 75.7 154.0 151.5
-------- -------- --------- --------
Segmental Adjusted EBITdA H1 2019 H1 2018 LTM 2019 FY 2018
- GBPm
-------- -------- --------- --------
Animal Health (6.1) (7.9) (9.2) (11.0)
-------- -------- --------- --------
Genetics 4.9 2.9 9.9 7.9
-------- -------- --------- --------
Advanced Animal Nutrition 9.6 11.3 19.9 21.6
-------- -------- --------- --------
All other segments 0.7 0.4 0.5 0.2
-------- -------- --------- --------
Corporate (1.6) (0.6) (2.8) (1.8)
-------- -------- --------- --------
Inter-segments sales - - 0.1 0.1
-------- -------- --------- --------
Total 7.5 6.0 18.5 17.0
-------- -------- --------- --------
Malcolm Pye, CEO, commented
"The Company delivered a solid first half performance which
places us well to refinance our existing credit facilities. The
increased flexibility will allow the Company to operate more
efficiently and support the roll-out of products which are showing
large potential and encouraging levels of interest from our
customers.
The Nordic capital markets are globally recognised as the
leading public markets for aquaculture drawing a community of
specialist investors and analysts which the proposed refinancing
will allow us to access.
We remain focused on delivering efficiencies which will further
drive margins and allocate capital to our priority areas of
growth"
Notice of results
The Company will announce its interim results for the six months
ended 31 March 2019 on 25 June 2019. Please contact
benchmark@mhpc.com if you would like to register your interest in
attending the results presentation or conference call.
Enquiries
For further information, please contact:
Benchmark Holdings plc Tel: 020 3915 1236
Malcolm Pye, CEO
Mark Plampin, CFO
Ivonne Cantu, Investor Relations
Numis (Broker and NOMAD) Tel: 020 7260 1000
James Black, Freddie Barnfield, Freddie
Naylor-Leyland
MHP Communications Tel: 020 3128 8742
Katie Hunt / Reg Hoare / Alistair de Kare-Silver benchmark@mphc.com
DNB Markets Tel:+47 241 69030
bond.syndicate@dnb.no
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END
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