TIDMBMK
RNS Number : 4990I
Benchmark Holdings PLC
02 April 2020
2 April 2020
Benchmark Holdings plc
("Benchmark" or the "Company")
Covid-19 Update
Benchmark, the aquaculture genetics, health and advanced
nutrition company, provides the following update in light of
Covid-19. Benchmark's key priority at these unprecedented times is
the health and safety of its employees, customers and partners.
Highlights
-- Business continuity plan implemented with remote working
facilities, and adapted shift patterns and safety procedures at
manufacturing sites worldwide
-- Strong liquidity position with c.GBP63.6 million cash and
undrawn facilities as at 30th March 2020, well within covenant
levels. Taking action to conserve cash through the crisis
-- Too early to assess the level of impact in the current
financial year ending 30th September 2020 but we anticipate a
negative impact on earnings:
o Trading in Genetics has not been materially affected
o Expect significant impact in Advanced Nutrition as a result of
reduced consumption leading to lower levels of production and
disruption to logistics
-- Disposal of non-core activities and restructuring ongoing with some delays
-- Commercialisation plan for BMK08 progressing with timing
reliant on any potential impact from Covid-19 on regulatory
approval process
Current trading and outlook
Benchmark operates in the essential sustainable global food
production sector which, while experiencing short term challenges
from Covid-19, continues to have strong fundamentals.
To date, it is too early to assess the level of impact in the
current financial year ending 30 September 2020 but we anticipate a
negative impact on earnings.
Trading in our Genetics business has not been materially
affected by Covid-19. The two and a half to three year salmon
production cycle means that demand for salmon eggs is less affected
by the short term impact from Covid-19 on the salmon sector, which
is experiencing weaker demand from the catering industry, partially
offset by retail demand, as well as challenging logistics to Asia
and US.
In Advanced Nutrition, global shrimp consumption has dropped,
with a consequent reduction in production in most markets. There
are cautious signs of a potential recovery in China, although the
effect will be slowed by a backlog of shrimp stocks from prior
months. Demand for sea bass and bream in Europe and in the US has
been significantly impacted, leading to a reduction in production
across all markets which could worsen if European borders close to
fry or end product. There is ongoing uncertainty and we expect a
significant impact from Covid-19 on the division.
In Animal Health, the Company has built stocks to support
customers and trading is on track. Our work towards the commercial
launch of BMK08 and CleanTreat (R) is continuing, with timings
highly reliant on any impact from Covid-19 on the regulatory
approval process.
Liquidity and headroom
Having raised GBP42m net proceeds through a placing and open
offer completed in February, the Group has a strong liquidity
position with c.GBP63.6 million cash and undrawn facilities as at
30th March 2020, well within covenant levels.
Management priorities and actions
The Group is taking a number of actions to protect the health
and wellbeing of its staff, to continue to supply and service its
customers, and to protect cash and maintain headroom during this
period of uncertainty.
The Group has implemented a business continuity plan to manage
all parts of the business safely, whilst continuing to support
customers. This includes remote working across our global
operations for our office based employees. We have adapted shift
patterns at manufacturing sites worldwide to reduce employee
exposure and enhanced safety procedures such as deep cleaning.
We continue to serve our customers with limited interruption to
date. We have built an inventory of product and key ingredients in
response to the increased risk posed by the closure of borders and
freight and logistical challenges. We are also conducting regular
customer support webinars.
From a financial perspective, we are taking actions to conserve
cash to maintain a resilient financial position through the crisis.
These include cost reductions, cuts or delays to R&D and capex,
and working capital management. We are continuing to focus on the
disposal of non-core activities and restructuring, which is
progressing albeit with some delays. The business will take
advantage of governmental support packages where appropriate and
offered in the countries in which we operate.
Peter George, Executive Chairman, commented:
" During these difficult times, the Group's key priority is to
protect our employees and customers' interests whilst at the same
time ensuring our financial position remains resilient. We operate
in the essential sustainable global food production sector which,
while experiencing short term challenges from Covid-19, continues
to have strong fundamentals. We remain confident in our strategy
for the business for the long term including the prospects for the
commercial launch of BMK08 and CleanTreat . "
Enquiries
For further information, please contact:
Benchmark Holdings plc Tel: 020 3696 0630
Peter George, Executive Chairman
Septima Maguire, CFO
Ivonne Cantu, Investor Relations
Numis (Broker and NOMAD) Tel: 020 7260 1000
James Black, Freddie Barnfield, Duncan Monteith
MHP Communications Tel: 07551 170 451
Katie Hunt, Reg Hoare, Alistair de Kare-Silver
benchmark@mphc.com
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