TIDMBMK
RNS Number : 2669D
Benchmark Holdings PLC
25 June 2019
BENCHMARK HOLDINGS PLC
("Benchmark" or the "Company" or the "Group")
Interim results for the six months ended 31 March 2019
Progress towards commercialisation of pipeline products and
structural efficiencies
Benchmark (LSE:BMK), the aquaculture health, genetics and
advanced nutrition business, announces its interim results for the
six months ended 31 March 2019 (the "period").
Constant
GBPm H1 2019 H1 2018 Change % Currency
Change(5)
%
----------------------- --------- ---------- ---------- ----------
Adjusted
Revenue 78.3 75.7 3% 2%
Adjusted EBITDA(1) 7.5 6.0 25% 23%
Adjusted Operating
Profit(2) 2.7 2.9 (7%) 10%
Adjusted Profit
Before Tax(3) 0.7 3.6 (80%) (86%)
----------------------- --------- ---------- ---------- ----------
Statutory
Revenue 78.3 75.7 3% 2%
Loss before tax (8.3) (5.6) (48%) (50%)
(Loss)/Profit for
the period (9.1) 3.6 (353%) (355%)
Basic (loss)/earnings
per share (pence) (1.71) 0.67 (355%)
Net Debt(4) (65.5) (41.3) (59%)
1 Adjusted EBITDA which reflects underlying profitability, is
earnings before interest, tax, depreciation, amortisation,
impairment, exceptional items and acquisition related expenditure
as shown in the income statement.
2 Adjusted Operating Profit is operating loss before exceptional
items including acquisition related items and amortisation of
intangible assets excluding development costs as shown in note 16
to the condensed consolidated financial statements
3 Adjusted profit before tax is earnings before tax,
amortisation and impairment of acquired intangibles, exceptional
items and acquisition related expenditure as shown in note 16 to
the condensed consolidated financial statements
4 Net debt is cash and cash equivalents less loans and
borrowings as shown in note 16 to the condensed consolidated
financial statements
5 Constant Currency change reflects the percentage change after
retranslating 2019 figures using the same foreign exchange rates
experienced in 2018.
H1 2019 Highlights:
Adjusted EBITDA growth driven by increased revenues and move
towards higher value product mix
-- Revenue increased by 3% to GBP78.3m (H1 2018 GBP75.7m)
despite challenging conditions in the global shrimp markets, with
growth in Genetics, Health and Knowledge Services more than
offsetting a drop in advanced nutrition
-- Adjusted EBITDA increased by 25% to GBP7.5m (H1 2018:
GBP6.0m) reflecting the contribution of higher value products, an
increase in the value of biological assets as a result of growing
sales and increasing capacity in Norway, and cost control
-- Adjusted EBITDA margin increased to 9.6% (H1 2018: 8.0%)
-- Loss for the period reflects increased depreciation following
recent investments and higher finance costs (H1 2018 profit
benefitted from one-off deferred tax credit of GBP9.2m)
-- R&D investment of GBP8.5m (10.9% of sales) (H1 2018:
GBP7.8m (10.3% of sales)), of which GBP2.9m was capitalised (H1
2018: GBP2.2m, 10.3%)(6)
-- Net debt was GBP65.5m including GBP26m ringfenced
non-recourse debt to fund the Salten salmon egg facility in
Norway
6 Capitalised R&D relates to trials and development work for
products which have proven to be commercially viable and are close
to launch, with the largest being the Group's next generation sea
lice treatment.
Progress towards commercialisation of key products
-- The regulatory process is on track for the market launch of
our next generation sea lice treatment. Commercial scale trials
continue to show c. 99% efficacy amid growing customer interest
-- Trials in Asia of our disease resistant shrimp continued to
show good results for survivability, yield and consistency,
demonstrating their commercial potential. Production of broodstock
for export commenced at the new facility in Florida
-- Production at new land based salmon egg facility in Salten,
Norway ramped up to plan, and commercial opening took place post
period end
Delivering on structural and operational efficiency
initiatives
-- Streamlined Advanced Nutrition production facilities in Asia
resulting in the sale of one site
-- Closure of one of the Company's lumpfish operations
-- Progress in developing alternatives for the commercialisation of companion animal products
Post period-end milestones
-- Refinanced our USD$90m credit facilities and increased
flexibility through the issuance of a four year term, NOK850m
(c.USD$95m equivalent) bond listed in Oslo and a USD$15m revolving
credit facility
-- Signed a joint venture in Thailand to commence construction
of the first multiplication centre for the roll-out of our disease
resistant shrimp in Asia
-- Entered into an agreement to dissolve the salmon genetics
joint venture with AquaChile. Decision to take control of a
breeding facility owned by the JV to pursue an independent strategy
in Chile
Commenting, Malcolm Pye, Chief Executive said:
"We have delivered growth in Adjusted EBITDA and made progress
against our strategic priorities despite challenging conditions in
the shrimp markets. We continue to implement operational and
structural efficiency initiatives and we expect the Group to
deliver broadly in line with market expectations for the full
year.
"We are starting to see benefits from the investments we have
made into a number of areas including our new facility in Salten,
Norway. These investments, combined with the successful completion
of our refinancing, leaves us well placed to deliver on our five
year strategy to drive future growth and profitability."
S
A presentation for analysts will be held today at 09.30 at the
offices of Numis Securities, London Stock Exchange Building, 10
Paternoster Square, London, EC4M 7LT. To register your interest,
please contact benchmark@mhpc.com. The presentation will also be
accessible via a live conference call for registered participants.
To register for the call please contact MHP Communications on +44
(0)20 3128 8226 or by email on benchmark@mhpc.com.
This announcement will be available on our website
(www.benchmarkplc.com)
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 benchmark@mphc.com
Kare-Silver
Interim Management Report
Overview
The Group delivered growth in revenue and Adjusted EBITDA
despite difficult conditions in the global shrimp and Mediterranean
seabass/bream markets. In addition, substantial progress was made
against the Group's strategic priorities including its next
generation sea lice treatment, its specific pathogen / disease
resistant (SPR) shrimp and the prioritised development of its
pipeline of products. The Group is implementing a programme of
structural and operational efficiencies to reallocate capital
towards its key aquaculture opportunities whilst maintaining strict
cost control and active management of working capital in order to
accelerate the path to profitability and free cashflow
generation.
Conditions in our end markets
Global demand for salmon continued to grow in the period
resulting in stable prices and a favourable environment for salmon
producers and for our products. Global salmon production increased
by c.5% during the period with strong growth in demand coming from
the US and the Americas, China and South Korea.
In shrimp, the industry experienced low prices as a result of
temporary overstocking following a record harvest in 2018. This led
our customers to reduce and delay production with an impact on
demand for our products.
In the Mediterranean, demand and prices for farmed sea bass and
sea bream have been affected by the economic environment in Turkey,
the major producing country, which has put pressure on farmers
across the Mediterranean.
Trading performance
Genetics
The Company's Genetics division performed well with revenues and
Adjusted EBITDA increasing by 8% and 73% to GBP22.6m and GBP4.9m
respectively. The result was driven by increased volumes in salmon
eggs, particularly from the recently launched disease resistant
eggs and from an increase in the value of biological assets as a
result of growing sales and increasing capacity at the Group's new
land based salmon egg facility in Norway.
The division also benefitted from an increase in sales to Chile
from Iceland following the launch of Benchmark Genetics Chile (BGC)
under our joint venture with AquaChile. In the short period since
launch, BGC has achieved market recognition creating a good
platform for it to pursue its future independent strategy.
Following the agreement with AgroSuper to exit the JV, Benchmark
will, in the coming weeks, wholly own a standalone and established
breeding facility in Chile where it will continue its work to
develop local broodstock with high value genetic traits. In the
short term, the Group will continue to export salmon eggs from its
operation in Iceland to satisfy demand in Chile as it continues to
develop its position in this important market.
The opening of the Group's new state-of-the-art land-based
facility in Salten, Norway has been well received by customers and
will play an important role in the future growth and development of
our genetics business.
Trials of our disease resistant shrimp continued to show good
results in Asia and commercial scale trials are underway. During
the period we commenced broodstock production at our facility in
Florida. We continued to invest in our tilapia genetics
programme.
There is significant under-penetration of professional genetics
in shrimp and tilapia, and growing recognition of the potential of
genetics to improve productivity without any environmental impact
or animal welfare concerns.
Advanced Nutrition
As mentioned in our 2018 annual report, the year commenced with
challenging conditions in the global shrimp markets which affected
sales volumes in Advanced Nutrition. On the supply side, the market
environment caused deep discounting of CIS artemia, affecting
demand for our higher quality GSL artemia where we maintain a
premium positioning. These conditions prevailed through the period
resulting in a decrease in sales and Adjusted EBITDA of 7% and 15%
to GBP40.9m and GBP9.6m respectively mainly driven by a drop in
artemia sales; sales of diet products were up by 1% versus H1
2018.
Animal Health
In Animal Health, revenues and Adjusted EBITDA improved by 73%
and 23% respectively, reducing the Adjusted EBITDA loss in the
division from (GBP7.9m) in H1 2018 to (GBP6.1m). The result
reflects an increase in sales of Salmosan, our sea lice treatment
which performed well in the period, and in toll manufacturing
revenues at our vaccine facility in Braintree, where we are
increasingly manufacturing vaccines for use in trials of our aqua
vaccine programme.
Strategic Progress - 2019 Priorities
In January 2019, at the time of our full year results, we set
out our strategic milestones for the year aligned to our five-year
strategy. We are pleased to provide an update on progress against
these milestones.
1. Grow in established markets from existing capacity and through partnerships
-- The commercial opening of our state-of-the-art salmon egg
facility in Norway took place on time in May 2019 and the ramp-up
of production is progressing as planned
-- We launched Benchmark Genetics Chile and are taking ownership
of a local breeding facility to continue to build our presence in
the market
2. Commercial delivery of pipeline products
-- We continued with trials in Norway for our next generation
sea lice treatment as planned, which have consistently shown c.99%
efficacy. Our regulatory approval process is on track
-- Our programme of trials for our sea bass/bream vaccines
continued to show good results and we have continued development of
our salmon vaccine portfolio
-- Options for the Group's companion animal products are still
being evaluated, with the most likely outcome being the
establishment of a commercialisation partnership
3. Focused investment in markets that leverage the Group platform
-- Our shrimp genetics programme leverages our expertise in
genetics and our position in the shrimp hatcheries market through
Advanced Nutrition. We established a production facility in Florida
and are investing to establish multiplication centres in Asia
through joint ventures with local partners, starting with
Thailand
Financial Review
Group revenue for the period increased by 3.4% to GBP78.3m (H1
2018: GBP75.7m) driven by revenue growth in Animal Health, Genetics
and all other segments (Knowledge Services) of 73%, 8% and 11%
respectively. This was offset partially by revenue falling in
Advanced Nutrition by 7%.
Adjusted EBITDA (earnings before interest, tax, depreciation,
amortisation, impairment, exceptional items and acquisition related
expenditure) which is used by management as the primary measure of
financial performance as it provides a more meaningful measure of
the underlying performance of the Group, increased to GBP7.5m (H1
2018: GBP6.0m). The increase arose principally from increased
sales, positive movement in biological assets and a shift in mix
towards higher margin products across the business. This was offset
by the reduction in contribution from Advanced Nutrition as a
result of challenging market conditions and by an increase in
operating expenses related to the strengthening of management to
ensure delivery of key strategic priorities.
Overall investment in R&D (expensed and capitalised)
increased from GBP7.8m to GBP8.5m. The increase is a result of an
increase in the level of capitalised development costs as the new
products progress through the development phase, and expensed
R&D was in line with the previous half year.
The Group's operating loss of GBP6.3m is the same as the prior
period. Depreciation and Impairment during the period increased by
GBP1.6m to GBP4.8m. GBP0.7m of the increase was a direct result of
recent investment in production capacity and GBP0.6m relates to the
closure of one of the Group's lumpfish sites. Loss before taxation
increased to GBP8.3m (H1 2018: GBP5.6m). The period was impacted by
higher net finance costs of GBP2.0m (H1 2018: net finance income
GBP0.7m) resulting both from increased net debt during the year and
from the impact of the foreign exchange gain of GBP1.6m arising
from the revaluation of USD denominated debt in H1 2018; the
comparative gain in H1 2019 was GBP0.1m.
The loss for the period was GBP9.1m (H1 2018: profit GBP3.6m).
H1 2018 profit arose from an exceptional tax credit of GBP9.2m due
to a decrease in the tax rates in Belgium from 34% to 25% which
reduced the deferred tax liability on the intangible assets from
the INVE acquisition. Loss per share was 1.71p (H1 2018: earnings
0.67p).
Net debt increased to GBP65.5m (FY 2018: GBP55.7m; H1 2018:
GBP41.3m). The movement in the half year arose as cashflow from
operations of GBP4.1m was offset by a payment of USD8.75m relating
to deferred consideration for the salmon genetics JV in Chile,
investments in tangible and intangible capital expenditure of
GBP3.7m and GBP3.1m respectively, tax payments of GBP1.2m and
interest payments of GBP2.0m. Capital additions consisted largely
of maintenance capital expenditure spread across the Group and
intangible capital expenditure related to capitalised development
costs mainly relating to the next generation sea lice treatment
programme.
Outlook and Summary
Conditions in the Group's core markets remain mixed with salmon
benefitting from growing demand and stable prices, while
overstocking in the shrimp market has resulted in depressed prices
and a decrease in production levels amongst our customers,
affecting demand for our products.
Despite prevailing market conditions, we achieved revenue and
Adjusted EBITDA growth in the first half. We will continue to
implement operational and structural efficiency initiatives and we
expect the Group to deliver broadly in line with market
expectations for the full year.
The long term drivers and opportunities in our markets continue
to be strong and we have made significant progress in the
development of our major products, in the conversion of certain
facilities from investment to commercial production phase, and in
the implementation of key efficiency initiatives which bring
further focus on the opportunities with the greatest potential
returns.
Independent Review Report to Benchmark Holdings plc
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly report for the six
months ended 31 March 2019 which comprises the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes
in equity, the consolidated cash flow statement and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly report for the six months ended 31 March 2019 is
not prepared, in all material respects, in accordance with the
recognition and measurement requirements of International Financial
Reporting Standards (IFRSs) as adopted by the EU and the AIM
Rules
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly report and consider whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
The impact of uncertainties due to the UK exiting the European
Union on our review
Uncertainties related to the effects of Brexit are relevant to
understanding our review of the condensed financial statements.
Brexit is one of the most significant economic events for the UK,
and at the date of this report its effects are subject to
unprecedented levels of uncertainty of outcomes, with the full
range of possible effects unknown. An interim review cannot be
expected to predict the unknowable factors or all possible future
implications for a company and this is particularly the case in
relation to Brexit.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half-yearly report in accordance with the AIM
Rules.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the EU.
The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with the recognition and measurement requirements of
IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Frances Simpson
for and on behalf of KPMG LLP
Chartered Accountants
1 Sovereign Square, Sovereign Street, Leeds, LS1 4DA
25 June 2019
Consolidated Income Statement
for the 6 months ended 31 March 2019
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
Notes (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------------- ------ -------------- -------------------- ---------------
Revenue 8 78,251 75,714 151,467
Cost of sales (40,350) (41,637) (77,447)
------------------------------------------- ------
Gross profit 37,901 34,077 74,020
Research and development costs (5,619) (5,621) (12,040)
Other operating costs (24,524) (22,178) (44,600)
Share of loss of equity-accounted
investees, net of tax (265) (231) (362)
------------------------------------------- ------ -------------- -------------------- ---------------
Adjusted EBITDA(2) 7,493 6,047 17,018
Exceptional including acquisition
related items 9 - - (1,239)
------------------------------------------- ------ -------------- -------------------- ---------------
EBITDA(1) 7,493 6,047 15,779
Depreciation and impairment 12 (4,778) (3,148) (6,841)
Amortisation and impairment 13 (9,003) (9,153) (18,002)
------------------------------------------- ------ -------------- -------------------- ---------------
Operating loss (6,288) (6,254) (9,064)
Finance cost (2,451) (1,069) (4,927)
Finance income 409 1,730 332
------------------------------------------- ------ -------------- -------------------- ---------------
Loss before taxation (8,330) (5,593) (13,659)
Tax on loss 10 (752) 9,164 9,270
------------------------------------------- ------ -------------- -------------------- ---------------
(Loss)/profit for the period (9,082) 3,571 (4,389)
------------------------------------------- ------ -------------- -------------------- ---------------
(Loss)/profit for the period attributable
to:
- Owners of the parent (9,528) 3,492 (5,009)
- Non-controlling interest 446 79 620
------------------------------------------- ------ -------------- -------------------- ---------------
(9,082) 3,571 (4,389)
------------------------------------------- ------ -------------- -------------------- ---------------
Basic (loss)/earnings per share
(pence) 11 (1.71) 0.67 (0.94)
Diluted (loss)/earnings per share
(pence) 11 (1.71) 0.66 (0.94)
1 EBITDA - Earnings before interest, tax, depreciation and
amortisation
2 Adjusted EBITDA - EBITDA before exceptional and acquisition
related items
Consolidated Statement of Comprehensive Income
for the 6 months ended 31 March 2019
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------------ --- -------------- -------------- ---------------
(Loss)/profit for the period (9,082) 3,571 (4,389)
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss
Foreign exchange translation differences (7,472) (10,318) 7,624
Cash flow hedges - changes in fair
value (159) - -
Cash flow hedges - reclassified to
profit or loss 12 - -
Total comprehensive income for the
period (16,701) (6,747) 3,235
----------------------------------------------- -------------- -------------- ---------------
Total comprehensive income for the
period attributable to:
- Owners of the parent (16,732) (6,864) 2,546
- Non-controlling interest 31 117 689
----------------------------------------------- -------------- ---------------
(16,701) (6,747) 3,235
---------------------------------------------- -------------- -------------- ---------------
Consolidated Balance Sheet
as at 31 March 2019
As at As at As at
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
Notes GBP000 GBP000 GBP000
------------------------------- ------ ------------ ------------ --------------
Assets
Non-current assets
Property, plant and equipment 12 94,392 89,961 99,527
Intangible assets 13 315,563 310,723 325,386
Equity-accounted investees 17,022 2,749 17,457
Other investments 34 112 29
Biological and agricultural
assets 4,483 4,924 8,502
Trade and other receivables 4,140 - 4,145
Total non-current assets 435,634 408,469 455,046
------------------------------- ------ ------------ ------------ --------------
Current assets
Inventories 21,630 21,618 20,483
Biological and agricultural
assets 17,709 13,612 11,892
Trade and other receivables 36,960 32,991 41,337
Cash and cash equivalents 23,832 21,869 24,090
Total current assets 100,131 90,090 97,802
------------------------------- ------ ------------ ------------ --------------
Total assets 535,765 498,559 552,848
------------------------------- ------ ------------ ------------ --------------
Liabilities
Current liabilities
Trade and other payables (36,081) (34,133) (45,680)
Loans and borrowings 14 (1,685) (558) (898)
Corporation tax liability (4,408) (5,716) (2,629)
Provisions (70) (429) (70)
Total current liabilities (42,244) (40,836) (49,277)
------------------------------- ------ ------------ ------------ --------------
Non-current liabilities
Loans and borrowings 14 (87,677) (62,627) (78,868)
Other payables (1,202) (1,232) (1,219)
Deferred tax (38,522) (41,134) (41,637)
Total non-current liabilities (127,401) (104,993) (121,724)
------------------------------- ------ ------------ ------------ --------------
Total liabilities (169,645) (145,829) (171,001)
------------------------------- ------ ------------ ------------ --------------
Net assets 366,120 352,730 381,847
------------------------------- ------ ------------ ------------ --------------
Issued capital and reserves
attributable to owners of
the parent
Share capital 3 558 522 557
Additional paid-in capital 358,044 339,431 357,894
Capital redemption reserve 5 5 5
Retained earnings (36,958) (20,376) (28,240)
Hedging reserve (147) - -
Foreign exchange reserve 38,896 28,042 45,953
Equity attributable to owners
of the parent 360,398 347,624 376,169
Non-controlling interest 5,722 5,106 5,678
------------------------------- ------
Total equity and reserves 366,120 352,730 381,847
------------------------------- ------ ------------ ------------ --------------
The notes on the following pages are an integral part of this
interim consolidated financial information
Consolidated Statement of Changes in Equity
for the 6 months ended 31 March 2019
Total
attributable
to equity
Share holders Non-
Share premium Other Retained of controlling Total
capital reserve reserves earnings parent interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 30 September 2017
(audited) 522 339,431 38,403 (24,742) 353,614 4,971 358,585
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Comprehensive income
for
the year
(Loss)/profit for the
year - - - (5,009) (5,009) 620 (4,389)
Other comprehensive
income - - 7,555 - 7,555 69 7,624
Total comprehensive
income
for the year - - 7,555 (5,009) 2,546 689 3,235
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Contributions by and
distributions
to owners
Share issue 35 18,463 - - 18,498 - 18,498
Share based payment - - - 1,511 1,511 - 1,511
Total contributions by
and distributions to
owners 35 18,463 - 1,511 20,009 - 20,009
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Changes in ownership
Acquisition of NCI
without
a change in control - - - - - 18 18
Total changes in
ownership
interests - - - - - 18 18
Total transactions with
owners of the Company 35 18,463 - 1,511 20,009 18 20,027
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 30 September 2018
(audited) 557 357,894 45,958 (28,240) 376,169 5,678 381,847
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 30 September 2017
(audited) 522 339,431 38,403 (24,742) 353,614 4,971 358,585
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Comprehensive income
for
the period
Profit for the period - - - 3,492 3,492 79 3,571
Other comprehensive
income - - (10,356) - (10,356) 38 (10,318)
Total comprehensive
income
for the period - - (10,356) 3,492 (6,864) 117 (6,747)
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Contributions by and
distributions
to owners
Share based payment - - - 874 874 - 874
Total contributions by
and distributions to
owners - - - 874 874 - 874
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Changes in ownership
Acquisition of NCI
without
a change in control - - - - - 18 18
Total changes in
ownership
interests - - - - - 18 18
Total transactions with
owners of the Company - - - 874 874 18 892
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 31 March 2018
(unaudited) 522 339,431 28,047 (20,376) 347,624 5,106 352,730
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 30 September 2018
(audited) 557 357,894 45,958 (28,240) 376,169 5,678 381,847
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Comprehensive income
for
the period
(Loss)/profit for the
period - - - (9,528) (9,528) 446 (9,082)
Other comprehensive
income - - (7,204) - (7,204) (415) (7,619)
Total comprehensive
income
for the period - - (7,204) (9,528) (16,732) 31 (16,701)
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Contributions by and
distributions
to owners
Share issue 1 150 - - 151 - 151
Share based payment - - - 810 810 - 810
Total contributions by
and distributions to
owners 1 150 - 810 961 - 961
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Changes in ownership
Disposal of subsidiary
with NCI - - - - - 13 13
Total changes in
ownership
interests - - - - - 13 13
Total transactions with
owners of the Company 1 150 - 810 961 13 974
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
As at 31 March 2019
(unaudited) 558 358,044 38,754 (36,958) 360,398 5,722 366,120
------------------------ ---------- ---------- ----------- ----------- --------------- -------------- ---------
Other reserves in this statement is an aggregation of Capital
redemption reserve, Hedging reserve and Foreign exchange
reserve.
Consolidated Statement of Cash Flows
for the 6 months ended 31 March 2019
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
Notes GBP000 GBP000 GBP000
----------------------------------------- ------ -------------- -------------- ---------------
Cash flows from operating activities
(Loss)/profit for the period (9,082) 3,571 (4,389)
Adjustments for:
Depreciation and impairment of
property, plant and equipment 12 4,778 3,148 6,841
Amortisation and impairment of
intangible fixed assets 13 9,003 9,153 18,002
(Gain)/loss on sale of property,
plant and equipment (27) 5 8
Finance income (409) (1,730) (332)
Finance costs 2,451 1,069 2,432
Other adjustments for non-cash
items 68 - (1,931)
Share of profit of equity-accounted
investees, net of tax 265 231 362
Foreign exchange losses/(gains) 1,016 (1,314) 2,609
Share based payment expense 810 874 1,511
Tax charge/(credit) 10 752 (9,164) (9,270)
----------------------------------------- ------ -------------- -------------- ---------------
9,625 5,843 15,843
Decrease/(increase) in trade and
other receivables 2,481 4,409 (4,355)
Increase in inventories (1,548) (1,819) (815)
Increase in biological assets (3,635) (1,369) (4,102)
Decrease in trade and other payables (1,543) (8,837) (4,026)
Decrease in provisions - (29) (388)
----------------------------------------- ------ -------------- -------------- ---------------
5,380 (1,802) 2,157
Income taxes paid (1,245) (1,119) (5,898)
----------------------------------------- ------ -------------- -------------- ---------------
Net cash flows from/(used) in operating
activities 4,135 (2,921) (3,741)
----------------------------------------- ------ -------------- -------------- ---------------
Investing activities
Purchase of investments (6,833) (377) (6,356)
Purchase of property, plant and
equipment 12 (3,734) (12,881) (25,072)
Purchase of intangibles 13 (3,113) (2,249) (7,581)
Proceeds from sale of non-current
assets 250 131 233
Interest received 178 94 261
----------------------------------------- ------ -------------- -------------- ---------------
Net cash flows used in investing
activities (13,252) (15,282) (38,515)
----------------------------------------- ------ -------------- -------------- ---------------
Financing activities
Proceeds of share issues 1 - 18,498
Proceeds from bank or other borrowings 11,035 28,273 41,206
Acquisition of non-controlling
interests - (32) (33)
Repayment of bank borrowings - (5,840) (5,815)
Cash advances and loans made to
other parties - - (4,076)
Interest and finance charges paid (2,002) (896) (2,442)
Payments to finance lease creditors (4) (212) (218)
Net cash inflow from financing
activities 9,030 21,293 47,120
----------------------------------------- ------ -------------- -------------- ---------------
Net (decrease)/increase in cash
and cash equivalents (87) 3,090 4,864
Cash and cash equivalents at beginning
of year 24,090 18,779 18,779
Effects of movements in exchange
rate on cash held (171) - 447
----------------------------------------- ------ -------------- -------------- ---------------
Cash and cash equivalents at end
of year 23,832 21,869 24,090
----------------------------------------- ------ -------------- -------------- ---------------
1. Financial information
This announcement does not constitute statutory financial
statements within the meaning of the Companies Act 2006 and the
interim financial information included within has not been
audited.
This information has been approved for issue by the Board of
Directors of Benchmark Holdings plc, a company domiciled and
incorporated in the United Kingdom.
Statutory accounts for the year ended 30 September 2018 were
approved by the Directors on 24 January 2019 and delivered to the
Registrar of Companies. The audit report received on those accounts
was unqualified and did not contain any emphasis of matter
paragraph nor any statement under Section 498 of the Companies Act
2006.
2. General information and basis of preparation
The financial information set out in these interim financial
statements for the six months ended 31 March 2019 and the
comparative figures for the six months ended 31 March 2018 are
unaudited. They have been prepared in accordance with the
recognition and measurement requirements of International Financial
Reporting Standards (IFRS) and IFRIC interpretations issued by the
International Accounting Standards Board (IASB) adopted by the
European Union and the AIM Rules. They do not contain all the
information required for statutory financial statements and should
be read in conjunction with the consolidated financial statements
of the Group for the year ended 30 September 2018, which have been
prepared in accordance with IFRS as adopted by the European
Union.
The interim financial statements comprise the financial
statements of the Group and its subsidiaries at 31 March 2019.
Subsidiaries are consolidated from the date of acquisition, being
the date on which the Group obtained control, and continue to be
consolidated until the date when such control ceases.
The interim financial statements incorporate the results of
business combinations using the acquisition method. In the
consolidated balance sheet, the acquiree's identifiable assets,
liabilities and contingent liabilities are initially recognised at
their fair values at the acquisition date.
Non-controlling interests, presented as part of equity,
represent the proportion of a subsidiary's profit or loss and net
assets that is not held by the Group. The total comprehensive
income or loss of non-wholly owned subsidiaries is attributed to
owners of the parent and to the non-controlling interests in
proportion to their respective ownership interests.
On consolidation, the results of overseas operations are
translated into sterling at rates approximating to those ruling
when the transactions took place. All assets and liabilities of
overseas operations, including goodwill arising on the acquisition
of those operations, are translated at the rate ruling at the
reporting date. Exchange differences arising are recognised in
other comprehensive income and accumulated in the foreign exchange
reserve.
Exchange differences recognised in the income statement in the
Group entities' separate financial statements on the translation of
long-term monetary items forming part of the Group's net investment
in the overseas operation concerned are reclassified to other
comprehensive income and accumulated in the foreign exchange
reserve on consolidation.
This is the first set of the Group's financial statements where
IFRS 9 and IFRS 15 have been applied. These are described in Note
5.
The following adopted IFRSs have been issued but have not been
applied by the Group in these financial statements.
IFRS 16 Leases introduces a single, on-balance sheet accounting
model for lessees which has an effective date of 1 January 2019.
The Group will adopt IFRS 16 on 1 October 2019.
As the Group reported GBP11.3m of undiscounted operating lease
commitments at 30 September 2018, it is anticipated that the new
standard will have a significant impact on the Group's reported
assets and liabilities. In addition, the implementation of the
standard will affect the Consolidated Income Statement and
classification of cash flows. The Group has not yet quantified the
potential impact of this standard. A reliable estimate of the
effect is dependent on several unresolved issues and will depend on
the circumstances at the time of adoption. Work is ongoing to
assess the full impact of this standard and this will be provided
in the Annual Report for the year ended 30 September 2019.
The adoption of other standards is not expected to have a
material effect on the financial statements.
A financial review of the business is included in the Chairman's
Statement.
3. Share capital
During the 6 months to 31 March 2019, the Company issued a total
of 532,536 shares of 0.1p each to certain employees of the Group
relating to share options granted in March 2015, July 2015 and
March 2016.
On 2 October 2018 the Company issued 246,700 shares at 0.1p each
at 60.8p as part consideration for the acquisition of Videntis
AS.
4. Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement.
As at 31 March 2019 the Group had net assets of GBP366.1m (30
September 2018: GBP381.8m), including cash of GBP23.8m (30
September 2018: GBP24.1m) as set out in the consolidated balance
sheet. The Group made a loss for the period of GBP9.1m (12 months
ending 30 September 2018: GBP4.4m).
On 24 June 2019, the Company completed a successful refinance of
the existing banking facility replacing facilities of USD90m with
Norwegian listed bonds valuing NOK850m (cUSD95m, cGBP75m) with an
expiry date of 2023 and an associated $15m (cGBP12m) revolving
credit facility available until 2022. As part of the process
certain financial covenant requirements have been revised.
As at 24 June 2019, the existing banking facilities have been
repaid in full with proceeds from the bond issue and drawings
against the revolving credit facility were GBPnil. The most recent
month end cash reserves at 31 May 2019 were GBP21.2m.
The Directors have prepared trading and cash flow forecasts for
the Group covering the period to September 2020, including forecast
compliance with the revised covenants. These forecasts include a
number of assumptions in relation to trading performance across the
Group including supply, demand and pricing of key raw materials and
products, and the out-licensing of certain products in development.
The forecasts also contain a number of board approved initiatives
("Structural Efficiencies programme") relating to structural and
operational efficiencies to reallocate capital, reduce costs, grow
margins, prioritise R&D spend, and exit from non-core
activities.
The Directors have considered reasonably possible downside
sensitivity scenarios, including mitigating actions within their
control should these occur around deferring and reducing
non-essential capital and revenue expenditure. These forecast
cashflows, considering the ability and intention of the directors
to implement mitigating actions should they need to, provide
sufficient headroom in the forecast period.
The Directors have considered all of the factors noted above and
are confident that the Group has adequate resources to continue to
meet its liabilities as and when they fall due the period of 12
months from the date of approval of these interim condensed
financial statements. Accordingly, the interim condensed financial
statements have been prepared on a going concern basis.
5. Accounting policies
Except as described below, the accounting policies adopted are
consistent with those used in preparing the consolidated financial
statements for the financial year ended 30 September 2018.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total earnings.
IFRS 9 Financial Instruments is effective for periods beginning
on or after 1 January 2018 and so has been adopted with effect from
1 October 2018. The standard introduced a new impairment model for
financial assets and new rules for hedge accounting. For trade and
other receivables, the carrying values were shown net of a
provision for impairment which equate to fair value, under IFRS 9
they are carried at amortised cost less impairment due to their
purpose being the collection of contract cash flows. In determining
the impairment, the group has applied the simplified approach
permitted. This change in measurement has had no material impact on
the group's financial position.
5. Accounting policies (continued)
The group has elected to adopt the new general hedge accounting
model in IFRS 9. This requires the Group to ensure that hedge
accounting relationships are aligned with its risk management
objectives and strategy and to apply a more qualitative and
forward-looking approach to assessing hedge effectiveness. The
Group uses forward foreign exchange contracts to hedge the
variability in cash flows arising from changes in foreign exchange
rates relating to certain foreign currency borrowings. The Group
designates only the change in fair value of the spot element of the
forward exchange contract as the hedging instrument in cash flow
hedging relationships. The effective portion of changes in fair
value of hedging instruments is accumulated in a cash flow hedge
reserves as a separate component of equity.
IFRS 15 Revenue from Contracts with Customers, is effective for
periods beginning on or after 1 January 2018 and so has been
adopted with effect from 1 October 2018. IFRS 15 supersedes IAS 11
Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty
Programmes, IFRIC 15 Agreements for the Construction of Real
Estate, IFRIC 18 Transfers of Assets from Customers and SIC 31
Revenue - Barter Transactions Involving Advertising Services.
Following a detailed assessment and based on the nature of the
Group's revenue streams, the adoption of the IFRS 15 did not have a
material impact on the Group revenue recognition or profit.
6. Estimates
The preparation of interim financial information requires
management to make certain judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
amounts may differ from these estimates.
In preparing these interim financial statements the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements for
the year ended 30 September 2018.
7. Segment information
Operating segments are reported in a manner consistent with the
reports made to the chief operating decision maker. It is
considered that the role of chief operating decision maker is
performed by the Board of Directors.
The Group operates globally and for management purposes is
organised into reportable segments as follows:
-- Animal Health Division - provides veterinary services,
environmental services diagnostics and animal health products to
global aquaculture, and manufactures licenced veterinary vaccines
and vaccine components;
-- Benchmark Genetics Division - harnesses industry leading
salmon breeding technologies combined with state-of-the-art
production facilities to provide a range of year-round high genetic
merit ova;
-- Advanced Animal Nutrition Division - manufactures and
provides technically advanced nutrition and health products to the
global aquaculture industry.
In addition to the above, reported as "all other segments" is
the Knowledge Services division. The division provides sustainable
food production consultancy, technical consultancy and assurance
services and promotes sustainable food production and ethics
through online news and technical publications for the
international agriculture and food processing sectors and through
delivery of training courses to the industries.
In order to reconcile the segmental analysis to the Consolidated
Income Statement, Corporate and Inter-segment sales are also shown.
Corporate represents revenues earned from recharging certain
central costs to the operating divisions, together with unallocated
central costs.
Measurement of operating segment profit or loss
Inter-segment sales are priced along the same lines as sales to
external customers, with an appropriate discount being applied to
encourage use of Group resources at a rate acceptable to local tax
authorities. This policy was applied consistently throughout the
current and prior period.
6 months ended 31 March 2019 (unaudited)
------------------- ------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Revenue 7,150 22,602 40,900 8,264 3,590 (4,255) 78,251
Cost of sales (6,812) (10,332) (19,526) (4,244) (172) 736 (40,350)
---------------------------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Gross profit / (loss) 338 12,270 21,374 4,020 3,418 (3,519) 37,901
Research and development
costs (2,425) (1,735) (1,459) - - - (5,619)
Operating costs (4,051) (5,341) (10,348) (3,283) (5,020) 3,519 (24,524)
Share of profit
of equity-accounted
investees, net of
tax - (265) - - - - (265)
---------------------------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Adjusted EBITDA (6,138) 4,929 9,567 737 (1,602) - 7,493
Exceptional 9
including
acquisition
related
items - - - - - - -
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
EBITDA (6,138) 4,929 9,567 737 (1,602) - 7,493
Depreciation and
impairment (1,356) (1,286) (771) (1,306) (59) - (4,778)
Amortisation (107) (1,030) (7,339) (527) - - (9,003)
---------------------------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Operating profit
/ (loss) (7,601) 2,613 1,457 (1,096) (1,661) - (6,288)
Finance cost (2,451)
Finance income 409
Loss before taxation (8,330)
---------------------------- --------- ---------- ----------- ----------- ----------- --------------- ---------
7. Segment information (continued)
6 months ended 31 March 2018 (unaudited)
--------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- --------- -------- ---------- ----------- ---------- ----------- --------------- ---------
Revenue 4,126 20,978 44,096 7,450 2,295 (3,231) 75,714
Cost of sales (5,417) (11,483) (21,404) (4,161) (185) 1,013 (41,637)
------------------------------ -------- ---------- ----------- ---------- ----------- --------------- ---------
Gross profit / (loss) (1,291) 9,495 22,692 3,289 2,110 (2,218) 34,077
Research and development
costs (2,682) (1,741) (1,198) - - - (5,621)
Other operating
costs (3,947) (4,666) (10,168) (2,858) (2,757) 2,218 (22,178)
Share of profit
of equity-accounted
investees, net of
tax - (231) - - - - (231)
------------------------------ -------- ---------- ----------- ---------- ----------- --------------- ---------
Adjusted EBITDA (7,920) 2,857 11,326 431 (647) - 6,047
Exceptional 9
including
acquisition
related
items - - - - - - -
------------------- --------- -------- ---------- ----------- ---------- ----------- --------------- ---------
EBITDA (7,920) 2,857 11,326 431 (647) - 6,047
Depreciation (1,016) (628) (857) (585) (62) - (3,148)
Amortisation and
impairment (123) (1,077) (7,131) (822) - - (9,153)
------------------------------ -------- ---------- ----------- ---------- ----------- --------------- ---------
Operating profit
/ (loss) (9,059) 1,152 3,338 (976) (709) - (6,254)
Finance cost (1,069)
Finance income 1,730
Loss before taxation (5,593)
------------------------------ -------- ---------- ----------- ---------- ----------- --------------- ---------
12 months ended 30 September 2018 (audited)
------------------- ------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Revenue 16,153 35,755 85,746 15,786 5,277 (7,250) 151,467
Cost of sales (13,494) (14,822) (40,998) (9,811) (440) 2,118 (77,447)
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Gross profit /
(loss) 2,659 20,933 44,748 5,975 4,837 (5,132) 74,020
Research and
development
costs (5,593) (3,611) (2,836) - - - (12,040)
Operating costs (8,058) (9,089) (20,285) (5,772) (6,632) 5,236 (44,600)
Share of profit
of
equity-accounted
investees, net
of
tax - (362) - - - - (362)
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Adjusted EBITDA (10,992) 7,871 21,627 203 (1,795) 104 17,018
Exceptional
including
acquisition
related
items 9 - (1,013) - - (226) - (1,239)
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
EBITDA (10,992) 6,858 21,627 203 (2,021) 104 15,779
Depreciation (2,459) (1,330) (1,679) (1,242) (131) - (6,841)
Amortisation and
impairment (108) (2,171) (14,523) (1,200) - - (18,002)
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
Operating profit
/ (loss) (13,559) 3,357 5,425 (2,239) (2,152) 104 (9,064)
Finance cost (4,927)
Finance income 332
Loss before
taxation (13,659)
------------------- ------- --------- ---------- ----------- ----------- ----------- --------------- ---------
8. Revenue
The Group's operations and main revenue streams are those
described in the last annual financial statements. The Group's
revenue is derived from contracts with customers.
The nature and effect of initially applying IFRS 15 on the
Group's interim financial statements are disclosed in note 5.
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary
geographical market and by sales of goods and services. The table
includes a reconciliation of the disaggregated revenue with the
Group's reportable segments (see note 7).
Sale of goods and provision of services
6 months ended 31 March 2019 (unaudited)
---------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Sale of goods 4,120 20,692 40,871 642 - - 66,325
Provision
of services 2,787 1,807 - 7,259 73 - 11,926
Inter-segment
sales 243 103 29 363 3,517 (4,255) -
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
7,150 22,602 40,900 8,264 3,590 (4,255) 78,251
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
6 months ended 31 March 2018 (unaudited)
---------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Sale of goods 1,994 19,326 44,065 876 - - 66,261
Provision
of services 2,032 1,475 - 5,868 78 - 9,453
Inter-segment
sales 100 177 31 706 2,217 (3,231) -
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
4,126 20,978 44,096 7,450 2,295 (3,231) 75,714
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
12 months ended 30 September 2018 (audited)
---------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Sale of goods 11,093 29,578 85,581 2,036 - - 128,288
Provision
of services 4,855 5,856 - 12,320 148 - 23,179
Inter-segment
sales 205 321 165 1,430 5,129 (7,250) -
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
16,153 35,755 85,746 15,786 5,277 (7,250) 151,467
---------------- --------- ---------- ------------ ----------- ----------- --------------- --------
8. Revenue (continued)
Primary geographical markets
6 months ended 31 March 2019 (unaudited)
----------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Faroe Islands 126 4,416 1 - - - 4,543
Greece 17 44 4,132 - - - 4,193
Norway 961 11,439 205 - - - 12,605
India - - 9,645 - - - 9,645
UK 1,328 2,426 129 4,731 73 - 8,687
Singapore 17 - 5,449 - - - 5,466
Ecuador - - 4,342 - - - 4,342
Rest of Europe 1,466 1,839 5,047 2,437 - - 10,789
Rest of World 2,992 2,334 11,921 734 - - 17,981
Inter-segment
sales 243 104 29 362 3,517 (4,255) -
------------------ --------- ---------- ------------ ----------- ----------- --------------- --------
7,150 22,602 40,900 8,264 3,590 (4,255) 78,251
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
6 months ended 31 March 2018 (unaudited)
----------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Faroe Islands 154 3,252 2 - - - 3,408
Greece - 74 3,991 3 - - 4,068
Norway (676) 11,859 324 - - - 11,507
India 7 - 10,266 - - - 10,273
UK 1,197 2,482 74 4,070 78 - 7,901
Singapore 2 - 5,276 - - - 5,278
Ecuador - - 4,312 - - - 4,312
Rest of Europe 1,163 2,105 6,013 2,188 - - 11,469
Rest of World 2,179 1,029 13,807 483 - - 17,498
Inter-segment
sales 100 177 31 706 2,217 (3,231) -
------------------ --------- ---------- ------------ ----------- ----------- --------------- --------
4,126 20,978 44,096 7,450 2,295 (3,231) 75,714
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
12 months ended 30 September 2018 (audited)
----------------- ----------------------------------------------------------------------------------------
Advanced All
Animal Animal other Inter-segment
Health Genetics Nutrition segments Corporate sales Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
Faroe Islands 158 6,778 7 - - - 6,943
Greece 205 118 7,894 3 - - 8,220
Norway 2,264 16,277 698 44 - - 19,283
India 10 - 18,180 - - - 18,190
UK 2,941 2,733 238 8,684 148 - 14,744
Singapore 2 - 11,746 - - - 11,748
Ecuador - - 9,253 - - - 9,253
Rest of Europe 3,071 4,717 9,535 4,193 - - 21,516
Rest of World 7,297 4,811 28,030 1,432 - - 41,570
Inter-segment
sales 205 321 165 1,430 5,129 (7,250) -
------------------ --------- ---------- ------------ ----------- ----------- --------------- --------
16,153 35,755 85,746 15,786 5,277 (7,250) 151,467
----------------- --------- ---------- ------------ ----------- ----------- --------------- --------
9. Exceptional including acquisition related items
Items that are material because of their size or nature,
non-recurring and whose significance is sufficient to warrant
separate disclosure and identification within the consolidated
financial statements are referred to as exceptional items. The
separate reporting of exceptional items helps to provide an
understanding of the Group's underlying performance.
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
---------------------------- --- --------------- --------------- ---------------
Acquisition related items - - 1,239
Total exceptional items - - 1,239
--------------------------------- --------------- -------------- ---------------
Acquisition related items are costs incurred in investigating
and acquiring new businesses. During the 12 months ended 30
September 2018, the contingent consideration element of the
provision for deferred consideration held for previous acquisitions
was recalculated considering up to date performance of those
acquisitions and the projected performance for the final 3 months
of the earn out period (which ended on 31 December 2017) against
the relevant sales volumes and revenue targets. As a result,
GBP206,000 was released in the year.
10. Taxation
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
-------------------------------- --- -------------- -------------- ---------------
Current tax expense
Analysis of charge in period
Current tax:
Current income tax expense
on profits for the period 3,239 3,950 6,041
Adjustment in respect of prior
periods - - (309)
------------------------------------- -------------- -------------- ---------------
Total current tax 3,239 3,950 5,732
Deferred tax expense
Origination and reversal of
temporary differences (2,487) (13,114) (14,990)
Deferred tax movements in
respect of prior periods - - (12)
------------------------------------- -------------- -------------- ---------------
Total deferred tax (2,487) (13,114) (15,002)
Total tax charge/(credit) 752 (9,164) (9,270)
------------------------------------- -------------- -------------- ---------------
The reasons for the difference between the actual tax charge for
the period and the standard rate of corporation tax in the United
Kingdom applied to the result for the period are as follows:
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
---------------------------------- --- -------------- -------------- ---------------
Accounting loss before income
tax (8,330) (5,593) (13,659)
Expected tax credit based
on the standard rate of UK
corporation tax at the domestic
rate of 19% (2018: 19%) (1,583) (1,063) (2,595)
Income not taxable - - (155)
Expenses not deductible for
tax purposes 305 186 686
Deferred tax not recognised 2,890 2,245 4,788
Adjustment to tax charge in
respect of prior periods - - (321)
Effects of changes in tax
rates - (10,496) (10,496)
Different tax rates in overseas
jurisdictions (860) (36) (1,177)
Total tax charge/(credit) 752 (9,164) (9,270)
--------------------------------------- -------------- -------------- ---------------
Deferred tax is calculated at the substantively enacted rates,
at which the temporary differences and tax losses are expected to
reverse, in the territories in which they arose. Reductions in the
corporation tax rate in Belgium were substantively enacted in the
previous year. The main rate of corporation tax was reduced from
34% to 29.58% effective from 1 January 2018 and to 25% from 1
January 2020.
11. Earnings/loss per share
Basic earnings/loss per share is calculated by dividing the
profit or loss attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares in issue
during the period.
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
----------------------------------------- -------------- -------------- ---------------
Loss/(profit) attributable to equity
holders of the parent (GBP000) (9,528) 3,492 (5,009)
Weighted average number of shares
in issue (thousands) 557,522 522,371 531,651
Basic (loss)/earnings per share (pence) (1.71) 0.67 (0.94)
Diluted earnings/loss per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. This is done
by calculating the number of shares that could have been acquired
at fair value (determined as the average market price of the
Company's shares for the period) based on the monetary value of the
subscription rights attached to outstanding share options and
warrants. The number of shares calculated above is compared with
the number of shares that would have been issued assuming the
exercise of the share options and warrants.
Therefore, the Company is required to adjust the earnings per
share calculation in relation to the share options that are in
issue under the Company's share-based incentive schemes, and
outstanding warrants, as follows:
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
-------------------------------------- -------------- -------------- ---------------
(Loss)/profit attributable to equity
holders of the parent (GBP000) (9,528) 3,492 (5,009)
Weighted average number of shares
in issue (thousands) - basic 557,522 522,371 531,651
Adjustment for share options and
awards (thousands) - 2,848 -
Weighted average number of shares
in issue (thousands) - diluted 557,522 525,219 531,651
-------------------------------------- -------------- -------------- ---------------
Diluted (loss)/earnings per share
(pence) (1.71) 0.66 (0.94)
12. Property, plant and equipment
Assets
Freehold in the Long Term Office
Land course Leasehold Plant Equipment
and of Property and E commerce and
Buildings construction Improvements Machinery Infra-structure Fixtures Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Cost
Balance at 1
October
2017 32,956 27,152 4,281 25,591 247 1,227 91,454
Additions 954 8,776 736 2,046 - 369 12,881
Reclassification (2,450) - (99) 2,610 - (61) -
Increase
/(decrease)
through
transfers from
assets in the
course
of construction 71 (5,057) 3,534 1,452 - - -
Exchange
differences 385 (609) (107) 138 - 13 (180)
Disposals - (10) (61) (492) - (113) (676)
Balance at 31
March
2018 31,916 30,252 8,284 31,345 247 1,435 103,479
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Balance at 1
April
2018 31,916 30,252 8,284 31,345 247 1,435 103,479
Additions 724 8,929 138 1,547 - 853 12,191
Increase
/(decrease)
through
transfers from
assets in the
course
of construction - (3) - 3 - - -
Exchange
differences (189) 1,182 117 337 - 104 1,551
Disposals (23) - (2) (144) - (111) (280)
Balance at 30
September
2018 32,428 40,360 8,537 33,088 247 2,281 116,941
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Balance at 1
October
2018 32,428 40,360 8,537 33,088 247 2,281 116,941
Additions 870 340 65 2,162 - 297 3,734
Increase
/(decrease)
through
transfers from
assets in the
course
of construction 117 (341) 2 215 - 7 -
Exchange
differences (1,542) (2,210) (86) (644) - (51) (4,533)
Disposals - (146) (121) (1,019) - (56) (1,342)
Balance at 31
March
2019 31,873 38,003 8,397 33,802 247 2,478 114,800
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Accumulated
Depreciation
Balance at 1
October
2017 2,414 - 1,211 6,388 244 352 10,609
Depreciation
charge
for the year 666 - 413 1,923 1 145 3,148
Reclassification - - (5) 25 - (20) -
Exchange
differences 180 - (47) 150 - 18 301
Disposals - - (96) (436) - (8) (540)
Balance at 31
March
2018 3,260 - 1,476 8,050 245 487 13,518
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Balance at 1
April
2018 3,260 - 1,476 8,050 245 487 13,518
Depreciation
charge
for the year 603 - 430 2,487 1 172 3,693
Exchange
differences 13 - 81 209 - 75 378
Disposals (21) - 2 (79) - (77) (175)
Balance at 30
September
2018 3,855 - 1,989 10,667 246 657 17,414
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Balance at 1
October
2018 3,855 - 1,989 10,667 246 657 17,414
Depreciation
charge
for the period 1,146 - 446 2,340 1 227 4,160
Impairment charge
for
the period - - - 618 - - 618
Exchange
differences (427) - (22) (318) - 2 (765)
Disposals - - (24) (935) - (60) (1,019)
Balance at 31
March
2019 4,574 - 2,389 12,372 247 826 20,408
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
Net book value
At 31 March 2019 27,299 38,003 6,008 21,430 - 1,652 94,392
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
At 30 September
2018 28,573 40,360 6,548 22,421 1 1,624 99,527
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
At 31 March 2018 28,656 30,252 6,808 23,295 2 948 89,961
------------------ ----------- --------------- -------------- ----------- ---------------- ----------- --------
The impairment in plant and machinery assets relates to a
facility at FAI Aquaculture Limited following a decision to close
one of its operating sites.
13. Intangible assets
Patents
and Intell- Devel-
Trade- ectual Customer opment
Websites Goodwill marks Property Lists Contracts Licences Genetics costs Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Cost or
valuation
Balance at 1
October
2017 597 149,941 811 134,638 6,784 9,510 34,664 26,245 3,531 366,721
Additions - on
acquisition - 51 - - - - - - - 51
Additions -
externally
acquired 19 - 10 44 - - - - - 73
Additions -
internally
developed - - - - - - - - 2,176 2,176
Exchange
differences - (5,286) (3) (5,685) (233) (170) (1,654) (57) (61) (13,149)
Balance at 31
March 2018 616 144,706 818 128,997 6,551 9,340 33,010 26,188 5,646 355,872
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Balance at 1
April
2018 616 144,706 818 128,997 6,551 9,340 33,010 26,188 5,646 355,872
Additions -
externally
acquired 67 - 20 74 - - - - 139 300
Additions -
internally
developed - - - - - - - - 5,002 5,002
Disposals - (447) - - - - - - - (447)
Exchange
differences 2 8,457 9 9,364 382 190 2,672 (2) 118 21,192
Balance at 30
September
2018 685 152,716 847 138,435 6,933 9,530 35,682 26,186 10,905 381,919
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Balance at 1
October
2018 685 152,716 847 138,435 6,933 9,530 35,682 26,186 10,905 381,919
Additions - on
acquisition - - - 318 - - - - - 318
Additions -
externally
acquired 35 - 36 61 - - 38 - - 170
Additions -
internally
developed - - - - - - - - 2,943 2,943
Disposals - (84) - - - - - - - (84)
Exchange
differences (4) (2,383) (5) (213) (6) (323) (417) (1,940) (3) (5,294)
Balance at 31
March 2019 716 150,249 878 138,601 6,927 9,207 35,303 24,246 13,845 379,972
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Accumulated amortisation and
impairment
Balance at 1
October
2017 531 276 631 22,902 1,028 5,506 4,899 1,811 - 37,584
Amortisation
charge
for the
period 9 - 47 6,303 200 696 1,062 389 - 8,706
Impairment
loss - 447 - - - - - - - 447
Exchange
differences - - (1) (1,099) (18) (79) (387) (4) - (1,588)
Balance at 31
March 2018 540 723 677 28,106 1,210 6,123 5,574 2,196 - 45,149
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Balance at 1
April
2018 540 723 677 28,106 1,210 6,123 5,574 2,196 - 45,149
Amortisation
charge
for the
period 12 - 111 6,328 203 703 1,099 393 - 8,849
Disposals - (447) - - - - - - - (447)
Exchange
differences - 1 12 2,136 35 114 681 3 - 2,982
Balance at 30
September
2018 552 277 800 36,570 1,448 6,940 7,354 2,592 - 56,533
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Balance at 1
October
2018 552 277 800 36,570 1,448 6,940 7,354 2,592 - 56,533
Amortisation
charge
for the
period 15 - (261) 6,942 350 691 923 343 - 9,003
Exchange
differences - - (31) (78) (1) (215) (609) (193) - (1,127)
Balance at 31
March 2019 567 277 508 43,434 1,797 7,416 7,668 2,742 - 64,409
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
Net book
value
At 31 March
2019
(unaudited) 149 149,972 370 95,167 5,130 1,791 27,635 21,504 13,845 315,563
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
At 30
September
2018
(audited) 133 152,439 47 101,865 5,485 2,590 28,328 23,594 10,905 325,386
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
At 31 March
2018
(unaudited) 76 143,983 141 100,891 5,341 3,217 27,436 23,992 5,646 310,723
---------------- --------- --------- -------- --------- --------- ---------- --------- --------- ------- ---------
The impairment loss in 2018 arose following an impairment review
which showed that an amount of Goodwill, held within a subsidiary
5M Enterprises Limited for the previously acquired Old Pond
business is no longer supported by discounted future cash flow
projections.
13. Intangible assets (continued)
Current estimates of useful economic lives of intangible assets
are as follows:
Goodwill Indefinite
Patents 2 - 5 years
Websites 5 years
Trademarks 2 - 5 years
Contracts 3 - 20 years
Licences 3 - 20 years
Customer lists Up to 26 years
Intellectual property Up to 20 years
Genetic material and breeding 10 - 40 years
nuclei
Development costs Up to 10 years
14. Loans and borrowings
On 30 December 2015, the Group entered into facilities
consisting of a five-year revolving credit facility (expiring on 11
December 2020) of up to USD 70m secured on the assets of the parent
company, UK subsidiary companies and certain overseas subsidiary
companies. On 7 January 2019, the accordion facility within the
Group's existing bank facility was activated raising the total
facility from USD 70m to USD 90m. At 31 March 2019, USD 83.1m was
drawn down on the facility. Liabilities under this facility were
settled on 24 June 2019 (note 15).
At 31 March 2019 SalmoBreed Salten AS, a subsidiary company, had
a loan of NOK 216 million provided by Nordea Bank Norge ASA. The
loan is a five-year term loan ending November 2023 at an interest
rate of 2.65% above 3-month NIBOR. In addition, SalmoBreed Salten
AS has a loan of NOK 55 million provided by Innovasjon Norge. The
loan is a twelve-and-a-half-year term loan ending March 2031 at an
interest rate of 4.2% above Norges Bank base rate. Salmobreed
Salten AS has a loan of NOK 16.75 million provided by Salten Aqua
ASA (the minority shareholder) this loan attracts interest at 2.5%
above 3-month NIBOR and is repayable in a minimum of 6 years but
not before the bank loans.
15. Events after the reporting date
On 10 June 2019, the Group completed the dissolution of its
joint venture with AquaChile in which it had a 49% ownership
interest. The Group will receive back its original cash investment
of USD 16.25 million (approximately GBP12.77m) in two instalments;
a first payment of USD 7.5 million 10 days after completion, and
the balance of USD 8.75 million to be paid six months after
completion. The Group also received the IP rights, genetics
material and biomass in the joint venture, and will, in the coming
weeks, wholly own a standalone and established breeding
facility.
On 24 June 2019, the Group completed a new senior secured
floating rate listed bond issue of NOK 850 million. The bond which
matures in June 2023, has a coupon of 5.25% above three months
NIBOR with quarterly interest payments. On the same day the Group
repaid the outstanding borrowings under its $90m five-year facility
(note 14). In addition, the Group entered into new borrowing
facilities, a three-and-a-half-year revolving credit facility of up
to USD 15.0 million secured on assets of certain group companies.
The interest rate on the facility is between 3% to 3.5% above Libor
depending on leverage.
16. Alternative performance measures
Management has presented the performance measures Adjusted
EBITDA, Adjusted Operating Profit and Adjusted Profit Before Tax
because it monitors performance at a consolidated level and
believes that these measures are relevant to an understanding of
the Group's financial performance.
Adjusted EBITDA which reflects underlying profitability, is
earnings before interest, tax, depreciation, amortisation,
impairment, exceptional items and acquisition related expenditure
and is shown on the Income Statement.
Adjusted Operating Profit is operating loss before exceptional
items including acquisition related items and amortisation of
intangible assets excluding development costs as reconciled
below.
Adjusted Profit Before Tax is earnings before tax, amortisation
and impairment of acquired intangibles, exceptional items and
acquisition related expenditure as reconciled below. These measures
are not defined performance measure in IFRS. The
16. Alternative Profit Measures (continued)
Group's definition of these measures may not be comparable with
similarly titled performance measures and disclosures by other
entities.
Reconciliation of Adjusted Operating Profit to Operating
Loss
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------------------------------- --- -------------- -------------- ---------------
Revenue 78,251 75,714 151,467
Cost of sales (40,350) (41,637) (77,447)
Gross profit 37,901 34,077 74,020
Research and development costs (5,619) (5,621) (12,040)
Other operating costs (24,524) (22,178) (44,600)
Depreciation (4,778) (3,148) (6,841)
Amortisation of capitalised development - - -
costs
Share of profit of equity accounted
investees net of tax (265) (231) (362)
---------------------------------------------- -------------- -------------- ---------------
Adjusted operating profit 2,715 2,899 10,177
Exceptional including acquisition
related items - - (1,239)
Amortisation of intangible assets
excluding development costs (9,003) (9,153) (18,002)
---------------------------------------------- -------------- -------------- ---------------
Operating loss (6,288) (6,254) (9,064)
---------------------------------------------- -------------- -------------- ---------------
Reconciliation of Loss Before Taxation to Adjusted Profit Before
Tax
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------------------------- --- -------------- -------------- ---------------
Loss before taxation (8,330) (5,593) (13,659)
Exceptional including acquisition
related items - - 1,239
Amortisation of intangible assets
excluding development costs 9,003 9,153 18,002
---------------------------------------- -------------- -------------- ---------------
Adjusted profit before tax 673 3,560 5,582
---------------------------------------- -------------- -------------- ---------------
17. Net debt
Net debt is cash and cash equivalents less loans and
borrowings.
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------ --- -------------- -------------- ---------------
Cash and cash equivalents 23,832 21,869 24,090
Loans and borrowings - current (1,685) (558) (898)
Loans and borrowings - non-current (87,677) (62,627) (78,868)
(65,530) (41,316) (55,676)
---------------------------------------- -------------- -------------- ---------------
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London Stock Exchange. RNS is approved by the Financial Conduct
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END
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