In mid-April I attended an excellent investor event hosted by PIWorld at the offices of MHP Communications. All of the companies presenting caught my interest and I've been meaning to write up my thoughts since then - despite being interrupted by Mello 2018!

Benchmark Holdings

Prior to this event I had no idea what Benchmark did and couldn't have guessed from their name. As explained by Malcolm Pye (CEO) and Mark Plampin (CFO) they are in the business of aquaculture with the specific goal of increasing yields through improvements in health, genetics and nutrition. The reason this is worth doing is that a growing global middle-class are pushing up protein consumption and putting real pressure on food production. Other areas of agriculture have spent time raising yields to deal with this but apparently fish farming has only taken off in the last 20 years, for most species, and is behind the curve. As such there's a real need for proven solutions across the fish life-cycle and that's where Benchmark come in with their history of R&D, patents and pipeline of products.

On the genetics front they are creating breed stocks with the very desirable traits of improved growth rates, better disease resistance and higher product quality. Right now salmon is the main focus but shrimp and tilapia have been added to appeal to the Asian and American markets. Then comes nutrition and here Benchmark apparently have preferential access to artemia, a shrimp food-stock which is in short supply, and they use this to create products that promote growth and immune system strength. Then there's the health aspect and this is all about creating vaccines and putting them through trials (much like any other pharma company). As such I imagine that a successful vaccine creates a barrier to entry for competitors and Benchmark have over 25 years experience in this market.

Now this all sounds great but it would be remiss of me to ignore the fact that the company hasn't made a profit since listing in 2013. This is probably a result of high capex and R&D demands, as the company has acted to take market share and reinforce customer relationships, but at some point all of this investment needs to pay off. Analyst forecasts suggest that the company will hit break-even in 2019/20 with earnings…

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