REG - Benchmark Hlgs PLC - Full Year Results
12/12/2024 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241212:nRSL8396Pa&default-theme=true
RNS Number : 8396P Benchmark Holdings PLC 12 December 2024
12 December 2024
Benchmark Holdings plc
("Benchmark", the "Company" or the "Group")
Full Year Results for the Financial Year ended 30 September 2024
Resilient performance in a year of change and market headwinds
Completion of strategic review resulting in disposal of Genetics business
Benchmark, the aquaculture biotechnology company, announces its full year
audited results for the year ended 30 September 2024 (the "period").
The Genetics business which is the subject of a post period end disposal has
been treated as held for sale and discontinued in the Annual Report. The 2024
results for Genetics have been included to enable our shareholders to evaluate
the performance and development of the Group as a whole before this disposal
took place
Financial highlights
· Total revenues (continuing and discontinued operations) were 7% below
the prior year at constant currency (CER) (-13% reported) resulting from:
o Advanced Nutrition: revenues +5% CER demonstrating resilient performance
in challenging shrimp markets.
o Health: revenues -41% CER following restructuring steps to transition to
new business model for Ectosan® Vet and CleanTreat® including
decommissioning of the two platform supply vessels and CleanTreat® units
o Genetics (discontinued): revenues -8% CER against a strong FY23
comparator, which benefitted from supply constraints in the market and due to
a shift from direct egg sales to indirect sales through the Company's JV in
Norway (which delivers an improved Adjusted EBITDA margin).
· Revenue from continuing operations was £90.4m was 6% below the prior
year at constant currency (-13% reported)
· Operating costs from continuing operations decreased by 20% (£7.2m)
with the savings resulting from restructuring actions across the Group
· Total Adjusted EBITDA excluding fair value movements in biological
assets was £28.9m, 10% below the prior year at constant currency (-16%
reported, FY23: £34.3m)
· Adjusted EBITDA from continuing operations was 24% below the prior
year at constant currency (-30% reported) driven by lower revenues in Health
and lower margin in Advanced Nutrition due to change in product mix in the
year, and higher logistic costs caused by trade route disruptions
· Total loss for the period was £39.1m (FY23: £21.6m) due to lower
revenues and margin, higher finance costs, higher exceptional costs primarily
arising from the strategic review process, and the impairment of capitalised
development costs in Health
· Net debt(3) reduced to £49.0m (FY23: £65.5m) following transfer of
£22.3m of Genetics loans and borrowings into liabilities held for sale
· Cash and cash equivalents of £23.1m and liquidity of £34.3m at year
end
· At 11 December 2024, cash and cash equivalents of £15.2m and
available liquidity of £26.5m
Conclusion of Strategic Review and Disposal of Genetics business
Post period end, on 25 November the Company announced the conclusion of the
strategic review initiated in January 2024 and the proposed Disposal of the
Genetics business to Novo Holdings AS (the "Disposal"). Transaction
highlights:
· Enterprise value of up to £260 million, representing a multiple of
17.9x Adjusted EBITDA (for the year to 30 June 2024).
· Initial cash consideration of £230m with additional contingent cash
consideration of up to £30m
· The Directors of the Company believe that the Disposal unlocks
significant value for shareholders and enables the Group to focus on its
Advanced Nutrition and Health business areas and creates an opportunity to
reduce complexity and streamline the Group to significantly reduce costs
· Net proceeds from the Disposal will be used to return capital to
shareholders and to reduce the Company's leverage, by repaying the Group's
unsecured listed green bond and drawn amounts under the Group's revolving
credit facility thereby strengthening the balance sheet of the continuing
business
· Completion of the Disposal is subject to regulatory approvals and is
expected during the first quarter of 2025
Financial Summary
(£m) FY 2024 FY 2023 % AER % CER**
Revenue from continuing operations 90.4 104.0 -13% -6%
Total Revenue (continuing and discontinued) 147.7 169.7 -13% -7%
Adjusted
Adjusted EBITDA(1) from continuing operations 11.9 17.0 -30% -24%
Total Adjusted EBITDA excluding fair value movements in biological assets 28.9 34.3 -16% -10%
Statutory
Operating loss from continuing operations (35.5) (17.5) -102% -99%
Loss before tax from continuing operations (45.9) (24.7) -86% -84%
Loss for the period including discontinued operations (39.1) (21.6) -81% -77%
Basic loss per share (p) (5.34) (3.16) -69%
Net debt(3) (49.0) (65.5)
Net debt excluding lease liabilities(3) (45.4) (45.6)
** Constant exchange rate (CER) figures derived by retranslating current year
figures using previous year's foreign exchange rates
(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and
amortisation and impairment), before exceptional items including acquisition
related items.
(2) Adjusted Operating Profit is operating loss before exceptional items
including acquisition related items and amortisation of intangible assets
excluding development costs
(3) Net debt is cash and cash equivalents less loans and borrowings after
transfer of £22.3m (£15.1m excluding lease liabilities) transferred to
liabilities held for sale relating to the Genetics business.
(4) Cash generated from operations after working capital and taxes as
percentage of Adj. EBITDA
Business Area Performance FY 2024 FY 2023 % AER % CER**
£m
Revenue
Advanced Nutrition 75.9 78.5 -3% +5%
Health 14.5 25.5 -43% -41%
Genetics (discontinued) 57.4 65.8 -13% -8%
Adjusted EBITDA(1)
Advanced Nutrition 14.4 18.4 -22% -16%
Health 2.1 4.8 -57% -55%
Genetics (discontinued) 14.8 14.4 +3% +9%
- excluding fair value movements in biological assets 15.1 14.5 +4% +10%
** Constant exchange rate (CER) figures derived by retranslating current year
figures using previous year's foreign exchange rates
(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and
amortisation and impairment), before exceptional items including acquisition
related expenditure.
Operational highlights
Advanced Nutrition - commercial focus and continued innovation
* Continued commercial focus through challenging markets
resulting in revenue growth at constant currency
* Launch of new products including SnappArt 360, applying
new production technology to increase feed stability and performance
* Expanded sales channels by establishing new subsidiary in
India which increases our commercial presence in this key market for shrimp
Health - rightsizing the business and moving away from capital intensive model
· Decommissioned the two supply vessels and CleanTreat units moving
away from capital intensive model
· Restructuring of the organisation, rightsizing it to deliver our
well-established sea lice treatment Salmosan® Vet
· Maintained capability to deliver Ectosan® Vet and CleanTreat®
onto customer owned infrastructure
Genetics - continued innovation and progress in growth vectors
· Launched new salmon genetic lines demonstrating ongoing innovation
· Excellent progress in our salmon genetics business in Chile
doubling its revenues
· Reorganisation of the shrimp genetics activities reducing costs and
leveraging our commercial presence in the shrimp markets through Advanced
Nutrition
· Significant progress in key R&D projects including gene
editing, sterility and gill disease
Sustainability
· Net Zero goal: Reduction in GHG emissions in Thailand following the
installation of solar panels in the year which supply 23% of the electricity
in the facility
Current trading and outlook
Advanced Nutrition
· Soft start to the year with unchanged conditions in the shrimp
markets; Q1 FY25 impacted by loss of significant customer in Venezuela
· Expect improvement through the year and recovery in gross margin
underpinned by higher quality of the recent Artemia harvest
· Actions taken over the past years to strengthen our commercial
effort, broaden the product portfolio and increase operational efficiency are
anticipated to mitigate the impact of market cyclicality and position the
business to deliver growth and improved profitability in the short and medium
term
Health
· Health has had a good start to the year. Our established sea lice
treatment Salmosan® Vet is well positioned in customers' toolkit to tackle
sea lice which continues to be a critical issue for the industry
· With a reduced cost base, Health is expected to deliver stable
profitability. At the same time, we will continue to work with customers to
develop an optimal model for Ectosan® Vet and CleanTreat® based on customer
owned infrastructure representing potential future upside
Group
· Focus on simplifying and streamlining the Group structure which is
expected to result in significant cost savings
· This effort will commence upon completion of the disposal of
Genetics, taking into consideration the Company's commitments under the
Transition Services Agreement
· Anticipate the streamlining exercise to be complete by the end of
FY25 with the benefits from the cost savings to come through in full in FY26
Trond Williksen, CEO, commented:
"FY24 was transformational for the Group. We managed to deliver a resilient
performance amidst difficult market conditions, as well as realising
significant shareholder value resulting from the successful development of our
Genetics business over the years.
"The sale of Genetics creates an opportunity to simplify the Group's
structure, positioning it to realise the potential in the Advanced Nutrition
and Health business areas, whilst reducing costs and leverage. At the same
time it will enable a return of capital to shareholders.
"Following the disposal, Benchmark will become a lean, profitable organisation
with a solid balance sheet, focused on realising the significant value and
potential in our continuing business where we have market leading positions, a
track record of innovation and significant headroom for growth."
Presentation for analysts and institutional investors at 8am GMT
Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial
Officer will host a presentation for analysts and institutional investors at
08.00 GMT (09.00 CET).
The presentation will be held in person at Haakon Vlls Gate 2, Oslo, Norway.
To register your interest, please contact benchmark@mhpgroup.com
(mailto:benchmark@mhpgroup.com)
A live webcast of the presentation will be available for analysts and
investors to join remotely at the following link: Benchmark Holdings Webcast
Q4 2024
(https://protect.checkpoint.com/v2/___https:/channel.royalcast.com/hegnarmedia/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpiYTgzYTZmNjFjYzBkMzY1ODRjNDkwMDc0N2VlOThlNTo2OmE0YWU6YTg4MTBiNWQ4ZTI1ZTU4MTM3ZDg0YTFjMzA1ZDQyMjQwNzc0ZmZjYmE5MmI1NTlhNWIzNTZhYWQ4NTY0MWFiNTpwOkY6Tg#!/hegnarmedia/20241212_2)
Equity Development webcast for retail investors at 11am GMT
Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial
Officer will host a second webcast for retail investors and wealth managers at
11.00 GMT (12:00 CET). The webcast is open to all existing and potential
shareholders.
To register please
visit: https://www.equitydevelopment.co.uk/news-and-events/benchmark-investor-presentation-12december2024
(https://protect.checkpoint.com/v2/___https:/www.equitydevelopment.co.uk/news-and-events/benchmark-investor-presentation-12december2024___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzowMTQ0M2U3NzdjNzkyYWE4ZDdiY2Q5ZDgwMWJhNGE2Yzo2OmZiMzA6YWYwMzE2NzdkYTE1YWQ5MTg3Zjg2OGRhZDM4MDk1ZWQwZTRmNzI5ZDM5NzliMWI1ZjRjNzBhMGMyOTc2MTYwMzpwOlQ6Tg)
Enquiries
Benchmark Holdings plc Tel: 0114 240 9939
Trond Williksen, CEO
Septima Maguire, CFO
Ivonne Cantu, Investor Relations
Deutsche Numis (Broker and NOMAD) Tel: 020 7260 1000
Freddie Barnfield, Duncan Monteith, Sher Shah
MHP Tel: 07890 952 661
Katie Hunt, Reg Hoare, Samuel Garner benchmark@mhpgroup.com (mailto:benchmark@mhpgroup.com)
About Benchmark
Benchmark's mission is to enable aquaculture producers to improve their
sustainability and profitability. We bring together biology and technology, to
develop innovative products which improve yield, quality and animal health and
welfare for our customers. We do this by improving the genetic make-up, health
and nutrition of their stock - from broodstock and hatchery through to nursery
and grow out. Benchmark has a broad portfolio of products and solutions,
including salmon eggs, live feed (Artemia), diets and probiotics and sea lice
treatments. Find out more at www.benchmarkplc.com
(https://protect.checkpoint.com/v2/___http:/www.benchmarkplc.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzoyNzdkZjMyYjhkZGZmNGYxMTg1YTUwNzQyNWY2YzkyMzo2OmRlMmQ6ZGI1MzI3NTAzZjQ5NTliYjgyZWM1YTEwNmViODFiYWVhZWFjYzY5N2E4MGE5OTc1YTFlYmQzZDYzMDFmZTNhODpwOkY6Tg)
Chairman's Statement
Conclusion of a Strategic Review
FY24 was a year of great consequence for the future of Benchmark. In January
2024, as a result of discussions with our major shareholders, the Company
announced the Board's decision to undertake a formal review of its strategic
options (the "Strategic Review") including a potential sale of the Company as
a whole or of one or more individual business areas. The goal of the Strategic
Review was to identify alternatives that would lead to value realisation for
shareholders at a level that the Board considered attractive relative to its
view of the Group's intrinsic value.
The reason behind the decision to carry out the Strategic Review was the
belief that the prevailing share price materially undervalues the combined
value of Benchmark's businesses and the long term prospects of the Group,
partly due to the illiquid nature of the Company's shares. Importantly, the
Board considered the significant progress made since the restructuring
conducted in 2020. Post restructuring and led by a new management team,
Benchmark grew revenues from £105.6m in FY20 to £169.7m in FY23 and Adjusted
EBITDA from £14.5m to £34.2m in the same period. The Company was well
positioned, with significant headroom to grow within its existing markets, and
multiple potential avenues for expansion. In addition, increased engagement
with sector specialist investors achieved through an Oslo listing in December
2022 was not successful in delivering materially increased liquidity and/or an
improvement in share price.
In order to achieve the best outcome from the Strategic Review, the Company
engaged a leading team of advisers who brought together substantial
transaction and sector expertise and who worked closely with the Board and the
Management team. A very thorough process was followed and while lengthy in
time, it enabled the Board to determine what it considers to be the optimal
course of action for the future of the Company - in the short and medium term
- for the benefit of its shareholders.
Post period end, on 25 November 2024, the Company announced the conclusion of
the Strategic Review which resulted in the proposed sale of the Genetics
business for up to £260.0m (the "Disposal"), which the Board considers an
attractive outcome for the Company and for shareholders. Benchmark received a
number of approaches from interested parties, which were invited to enter into
a thorough due diligence process. Following a review of the proposals, and
having conducted a targeted but extensive process, the Board resolved that the
disposal of Genetics represented the best option to unlock significant value
for shareholders at a level that fully reflects its intrinsic value and
prospects. The Disposal is subject to shareholder and regulatory approvals and
is expected to complete in Q1 CY25.
The Disposal will allow the Group to reduce leverage, return capital to
shareholders and strengthen its balance sheet to focus entirely on its
Advanced Nutrition and Health business areas. It positions Benchmark as a lean
organisation focused on realising the significant value inherent in our
continuing business which are market leading, profitable and which have
significant future potential. Following completion of the Disposal, the Board
intends to simplify and streamline the corporate organisation, rightsizing it
appropriately. A further update on the strategy and outlook for the continuing
business will be provided in due course.
Whilst the divestment of our Genetics business enables the Company to realise
value, we also believe that under the
new ownership the business will be able to continue to develop, providing good
opportunities for our employees and continued support to our customers, two
important stakeholder groups together with our shareholders.
The Strategic Review required substantial direct involvement, attention and
time from every Board member, in addition
to the annual work programme in the ordinary course of business, and I take
this opportunity to thank them for their commitment and contribution.
While the Strategic Review was front and centre in the Board's agenda, we
maintained our focus on the business as usual, responding in particular to
some challenging market conditions. Conditions in the shrimp market coupled
with the transition of our Ectosan® Vet and CleanTreat® business model,
resulted in lower total revenues from continuing and discontinued operations
of £147.7m (FY23: £169.7m) and lower Adjusted EBITDA excluding fair value
movements from biological assets of £28.9m (FY23: £34.3m). Genetics has been
classified as discontinued operations in our financial statements following
the decision to divest this activity. Excluding these, revenues from
continuing activities was £90.4m (FY23: £104.0m) and Adjusted EBITDA from
continuing operations was £11.9m (FY23: £17.0m).
We consider the Group delivered a solid performance given the challenges faced
and the actions taken. In Advanced Nutrition, in difficult markets, we
maintained our market position maximising commercial opportunities from our
broad product portfolio and opening new channels. In Genetics where we faced
two incidents of ISA, the robustness of our biosecurity protocols and rapid
action taken by our in-house team of experts limited the impact and secured
continuity of supply for our customers. In Health where we implemented a
significant restructuring as part of the change in business model, we
maintained a stable focused team delivering our well-established sea lice
solution Salmosan® Vet. We are well placed to benefit from an improvement in
market conditions and are confident of the strength and potential of our
business going forward.
Board changes
In November 2023 Laura Lavers retired from the Board and Jonathan Esfandi the
founder and managing partner at JNE Partners LLP, a significant shareholder of
the Company, joined. Jonathan is acting as shareholder representative of JNE
Partners LLP and therefore the Board has concluded that he is not an
independent director. In January 2024 Susan Searle, the Company's most tenured
Board member, retired from the Board and I would like to take this opportunity
to thank Susan for her outstanding contribution and support.
Sustainability
Our mission to drive sustainability in aquaculture continues to be embedded in
everything we do. During the year we made material progress towards our Net
Zero goals with the solar panel installation in Thailand now operational and
delivering a significant proportion of our energy needs. In line with our
commitment to transparent disclosure we made good progress towards compliance
with our upcoming CSRD obligations.
Our people
Benchmark is driven by a global team of talented people working together
within a culture that promotes collaboration, innovation and commercial focus.
I am proud to have seen continued employee engagement and dedication
throughout the Strategic Review which placed increased demands on many people
across the Group. On behalf of the Board, I would like to extend our gratitude
for their commitment and contribution.
Chief Executive Officer's Review
A transformational year for Benchmark
Introduction
FY24 was another transformational year for the Group in which we managed to
deliver a resilient performance amidst difficult market conditions as well as
an attractive outcome for the Company and its shareholders via our Strategic
Review.
Entering the year we realised that despite several years of consistently
demonstrating operational and financial progress following the restructuring
in 2020, there were certain structural issues - including the limited
liquidity in the Company's shares - which hampered our ability to translate
the Company's progress into shareholder returns through share price alone. As
a result, Management and the Board determined that a Strategic Review was
needed to explore possible routes to value realisation, and this review was
subsequently initiated in the second quarter of the financial year.
Post period end, on 25 November, the Company announced the conclusion of the
Strategic Review with the agreement to sell our Genetics business, realising
significant value for shareholders at a level which the Board considers is
reflective of the intrinsic value in the business. In addition, the sale of
Genetics creates an opportunity to simplify the Group, positioning it to
realise the potential in the Advanced Nutrition and Health business areas and
reduce costs. The disposal is subject to shareholder and regulatory approvals
and is expected to complete in Q1 CY25.
The proceeds from the disposal of the Genetics business enable the Company to
reduce leverage, return capital to shareholders and strengthen the balance
sheet to support growth opportunities in the continuing business. The Group is
now positioned for a new chapter as a lean, profitable organisation with a
solid balance sheet, focused on realising the significant value and potential
in our continuing business where we have market leading positions, a track
record of innovation and significant headroom for growth.
Operationally, FY24 was a challenging year where we experienced various
headwinds including continued difficult conditions in the global shrimp
markets for Advanced Nutrition, and two biological incidents at our main
salmon genetics facility in Norway which tested our biosecurity protocols. In
addition, in Health, the decision to restructure the business to transition to
a less capital intensive model for Ectosan® Vet and CleanTreat® had an
impact on revenues. Against this background the Company delivered a solid
result, responding strongly to mitigate the impact of the challenges faced,
while making progress in the development of our growth vectors.
I believe we emerge stronger from FY24, and as a leader in mission-critical
areas of aquaculture production, with strong fundamentals underpinning the
sector and a competent, talented organisation we are well placed to take
advantage of the opportunities ahead.
FY24 Performance Overview
Total Group revenues including Total Group revenues including discontinued
operations were £147.7m (FY23: £169.7m) driven by revenues of £75.9m in
Advanced Nutrition (FY23: £78.5m), £57.4m in Genetics (FY23: £65.8m) and
£14.5m in Health (FY23 £25.5m). Genetics has been classified as discontinued
operations for accounting purposes following the decision made before year end
to divest the business. Group revenues from continuing operations were £90.4m
(FY23 restated: £104.0m).
Total Adjusted EBITDA (continuing and discontinued) excluding fair value
movements from biological assets was £28.9m (FY23: £34.3m) and the Total
Adjusted EBITDA margin excluding fair value movements from biological assets
remained consistent at 20% (FY23: 20%). Total loss for the year was £39.1m
(FY23: 21.6m).
Adjusted EBITDA from continuing operations excluding fair value movements from
biological assets was £11.9m (FY23 restated: £17.0m). Operating loss from
continuing operations was £35.5m (FY23: £17.5m).
Our liquidity position at the end of the year (cash and available facility)
ended at £34.3m (FY23: £48.8m).
Strategically, our focus in the year was on carrying out the Strategic Review
and on continuing to progress our key strategies in the business. These
include maintaining and building on our leading market positions in our core
businesses and developing our growth vectors.
More specifically in Advanced Nutrition we worked on expanding our routes to
market and broadening our product offering with a number of product launches.
In Genetics we continued our efforts to become the supplier of choice for
salmon genetics in all key markets and made significant progress in Chile. In
Health our goal was to establish a profitable business model to build on our
position in medicinal sea lice treatments. I am pleased to say that we are
delivering on all fronts against these objectives.
Innovation is a key pillar of our strategy and a significant value driver for
the business. Our investment over recent years, together with our ability to
attract the top talent in the sector and a collaborative approach with
research institutions is bearing fruit. We made significant progress in the
year on our most promising R&D projects in Genetics including gene
editing, sterility and complex gill disease. In Advanced Nutrition, we
launched new products including SnappArt 360 which combines the SnappArt
device with an intuitive web-based platform, and a novel shrimp diet applying
new production technology to increase feed stability and performance.
Our mission to drive sustainability in aquaculture continues to be embedded
and made material and tangible progress towards our Net Zero goals with our
solar panel installation in Thailand being operational for the first time this
year delivering 23% of our electricity needs this year. Groupwide workshops
took place to develop site-specific energy transition plans to underpin the
next phase of our journey towards our Net Zero targets and increasing our
confidence in delivering on our ambitious goals.
Business area review
Advanced Nutrition
Advanced Nutrition delivered a resilient performance against a backdrop of
continued adverse conditions in the shrimp markets which affected demand for
our products, particularly those at the premium end. Our focus was on
maintaining our leading market position, maximising sales by taking advantage
of commercial opportunities and developing new sales channels. As a result,
revenues of £75.9m, were only 3% below the prior year but were actually 5%
ahead in constant currency taking account of the forex headwinds experienced
in the prior year. A change in product mix led to lower average prices and
gross profit margin was 48% as a result (FY23: 56%).
By product area, revenues from our Artemia portfolio were down 3% with lower
average price offsetting a 6% increase in volume. Revenue from Diets were in
line with the prior year with an increase in Mediterranean fish diets
offsetting lower revenues in shrimp. The Health segment, which mainly
comprises premium probiotics, was particularly impacted by market conditions
and was 17% down compared to the prior year. By region, Europe which is not
exposed to shrimp was up 3%, the Americas and Asia Pacific were slightly down,
and China experienced a significant drop.
In addition to a strong commercial focus, we maintained financial discipline
and continued our effort to increase operational efficiencies by streamlining
the organisation and reducing costs where possible. Outside of our control,
our logistics were affected by the Middle East conflict resulting in a
temporary disruption to trading routes with freight vessels avoiding the
regional insecurity of the Suez Canal by travelling via the Cape of Good Hope,
which increased costs. Together with the lower gross profit margin this led to
an Adjusted EBITDA of £14.4m (FY23: £18.4m) and an Adjusted EBITDA margin of
19% (FY23:23%).
In the area of innovation, in addition to a number of product launches, our
R&D site in Singapore is increasing its traction, playing a pivotal role
in the development of the Asian marine fish market through the transfer of
knowledge from our longstanding experience in the Mediterranean. Our focused
innovation efforts in FY24 are expected to lead to several new product
launches across the portfolio with promising value creation potential.
An important element of our commercial strategy is the development of new
sales channels. After considerable effort, in FY24 we established a new
subsidiary in India which will enable us to build on our network of
distributors in this key market for shrimp.
Our team continues to be recognised as a source of excellence across multiple
areas. A highlight which showcases the importance that we place on our people
was being awarded the Outstanding Operational Network Award for Employee
Mental Health Care in the Workplace from the Thai department of Mental Health,
one of only 13 companies in the country to receive the award.
One of the pillars of our sustainability programme in Advanced Nutrition is
the responsible sourcing of raw materials which sits high on the agenda for
industry participants and society at large. Through the efforts of our
procurement and R&D teams, all our marine protein sources, oil and marine
ingredients have a sustainability certification or assurance while at the same
time we made progress in the development of novel green ingredients reaching
advanced stage of testing for bacterial protein meal with positive results.
Genetics
Genetics delivered a good performance in FY24 despite revenues being lower
than in FY23 when we benefitted from supply constraints in the salmon egg
market. Total revenues of £57.4m were 13% below the prior year (8% down in
constant currency) driven by lower revenues from salmon eggs and non core
areas partially offset by higher revenues from Genetics Services.
Revenues from our core salmon egg business were £38.5m (FY23: £45.6m). This
should be compared against a very strong FY23 as mentioned above, and also
reflects a shift from direct egg sales to indirect sales through our joint
venture in Norway. While the shift from direct sales had an effect on revenues
it benefits the bottom line through the joint venture profits. The total
volume of egg sales including direct sales and indirect sales made through the
joint venture in Norway was 340m (FY23: 359m eggs) of which the direct sales
volume was 286m (FY23: 335). Revenues from non-product-based revenue streams
reflect a modest 5% increase in harvest revenues, an increase in revenues from
Genetics Services to £1.7m (FY23: £1.2m) and a reduction in other non-core
products to £5.6m (FY23: £7.4m). Adjusted EBITDA excluding the impact from
fair value movements of biological assets was £15.1m, 4% ahead of the prior
year. The Adjusted EBITDA margin excluding fair value movements of biological
assets was 26% (FY23: 22%).
Notably we made good progress in our growth vectors. Revenues from Chile more
than doubled to £3.6m taking the Adjusted EBITDA excluding fair value
movement from a loss of £3.0m in FY23 to a profit of £1.0m. Together with
higher revenues the improvement in Adjusted EBITDA reflects higher
capitalisation of production costs associated with our biological assets as we
gain commercial traction and there is increased visibility of future sales.
In shrimp our ongoing work to develop local lines continued and we benefitted
from the transition to a less capital- intensive model introduced at the
beginning of the year. While this is not yet evident in material sales which
increased marginally, Adjusted EBITDA loss significantly reduced from a loss
of £3.6m in FY23 to £1.8m in the period.
Our market leadership and progress in Chile are underpinned by the quality of
our products, biosecure facilities, superior customer service and continuous
innovation and as such we are well positioned to be the supplier of choice for
salmon genetics in all key markets.
During the year we launched a new product portfolio of specialised, premium
genetics products based on innovation in our existing technologies, including
genomics and cryopreservation, to optimise our genetic design, and focus our
selection intensity on the traits that give the most benefit to customers.
The biosecurity of our facility and robustness of our operations was tested in
the year with two isolated incidents of ISA (infectious salmon anaemia) at our
Salten facility. The presence of ISA is a material risk in our sector with
significant potential consequences. I am proud to say that the strict
biosecurity we have in place and the competence and dedication of our team
meant that the impact on our operations was very limited.
As mentioned above, post period end the Company announced the disposal of our
Genetics activities as a result of the Strategic Review conducted in the year.
I am proud of the Genetics business we built which demonstrated strong
development in recent years and value creation while setting the foundations
for significant growth. I wish every member of our Genetics team future
success in continuing to develop the organisation to fulfil its potential. I
believe that Novo Holdings will be an excellent new owner for the Genetics
business and is well positioned to take the business forward.
Health
In Health, the focus in the year was In Health the focus in the year was on
creating a sustainable, profitable business capable of delivering our core sea
lice solution Salmosan® Vet while maintaining our capability to deliver
Ectosan® Vet and CleanTreat® - a proven highly effective, environmentally
friendly sea lice solution with high animal welfare credentials. The
transition to a more sustainable, less capital-intensive business involved
rightsizing the cost base by taking out from service the two PSVs ("platform
supply vessels") carrying the CleanTreat® systems and streamlining the rest
of the organisation accordingly.
Sea lice continues to be the most significant sustainability issue in the
salmon industry and we firmly believe in the future of Ectosan® Vet and
CleanTreat® to contribute to address it. Together with industry participants
we are exploring configurations for the CleanTreat® infrastructure that are
more operationally and financially viable, both for both the Company and its
customers. Given the transition undertaken during the year the majority of the
revenues were generated from Salmosan® Vet. Revenues were £14.5m (FY23:
£25.5m) and Adjusted EBITDA was £2.1m (FY23: £4.8m).
Our People
Benchmark's people and culture are its most valuable asset. FY24 called for
special commitment, dedication and close collaboration across the Group. On
behalf of the Management Team, I specifically want to thank each of our
employees for their great effort and contribution throughout this year.
Current trading and outlook (continuing activities)
The start of the year has been soft In Advanced Nutrition with conditions in
the shrimp market remaining unchanged. However, we expect improvement through
the year and a recovery in the gross margin, which in 2024 was affected by the
product mix due in part to the nature of the 2023/24 Artemia harvest. We are
confident that the actions taken over the past three years to strengthen our
commercial effort, broaden our product portfolio and increase operational
efficiency, mitigate the impact of market cyclicality and position us to
deliver growth and improved profitability in the short and medium term.
Health has had a good start of the year. Our established sea lice treatment
Salmosan® Vet is well positioned in customers' toolkit to tackle sea lice
which continues to be a critical issue for the industry. With a reduced cost
base our Health business is expected to deliver stable profitability going
forward. At the same time, we will continue to work with customers to develop
a viable model for Ectosan® Vet and CleanTreat® based on customer owned
infrastructure.
For the Group as a whole the focus will be on simplifying and streamlining the
Group structure which is expected to result in significant cost savings. This
effort will commence upon completion of the disposal of Genetics, taking into
consideration the Company's commitments under the Transition Services
Agreement which has an expected duration of up to six months. We therefore
anticipate the streamlining exercise to be complete by the end of FY25 with
the benefits from the cost savings to come through in full in FY26.
Trond Williksen
Chief Executive Officer
Financial Review
Resilient performance in the year
Introduction
Following the statement made on 22 January 2024 announcing the Board's
decision to conduct a formal review to explore the Group's strategic options,
FY24 was very much a year of 'business as usual' to ensure continuity and
stability while allowing the formal review process to take place.
The outturn for FY24 was satisfactory against a backdrop of difficult
conditions, particularly in the soft shrimp market experienced by Advanced
Nutrition for which recovery is proving much slower than anticipated.
In addition, underutilisation of our innovative Ectosan® Vet and CleanTreat®
solution in Health and two isolated ISA incidents reported in our Genetics
business area during the year created challenges in the period. With our
continued focus on cost and cash preservation and actions taken by management
to mitigate the impact of adverse factors, we demonstrated strong resilience
in the period underpinned by a robust business platform and organisation.
We are anticipating recovery in the shrimp markets in FY25 which our Advanced
Nutrition business area is expected to benefit strongly from, and the medium
and long-term outlook for the Group remains positive.
Post period end, on 25 November 2024, the Company announced the conclusion of
the Strategic Review which involved the sale of the Genetics business area and
the decision to retain the Advanced Nutrition and Health business areas within
the Group and to streamline the corporate structure accordingly. Given the
advanced stage of the discussions related to the sale of Genetics as at 30
September, management assessed a sale to be highly probable and the assets and
liabilities of Genetics were classified as held for sale and its results as
discontinued operations. In this financial review we include narrative on the
results and operations for Genetics during the year to enable our shareholders
to evaluate the performance and development of the Group as a whole.
2023
As reported (£m unless otherwise stated) 2024 restated(*) % AER % CER(5)
Total Revenue (continuing and discontinued operations) 147.7 169.7 -13% -7%
Revenue from continuing operations 90.4 104.0 -13% -6%
Operating loss from continuing operations (35.5) (17.5) -102% -99%
Loss before tax from continuing operations (45.9) (24.7) -86% -84%
Loss for the period including discontinued operations (39.1) (21.6) -81% -77%
Basic loss per share from continuing operations (p) (5.99) (3.21) -87%
Basic loss per share (p) (5.34) (3.16) -69%
* 2023 numbers have been restated to reflect changes to the ongoing continuing
business following the decision to sell the Genetics business area during the
year (Note 5).
2023
Adjusted measures (£m unless otherwise stated) 2024 restated* % AER % CER(5)
Gross profit from continuing operations 43.9 56.1 -22% -18%
Gross profit margin from continuing operations % 49% 54%
Adjusted EBITDA(2) from continuing operations 11.9 17.0 -30% -24%
Adjusted EBITDA(2) margin from continuing operations % 13% 16%
Total Adjusted EBITDA(2) (continuing and discontinued operations) 28.6 34.2 -16% -10%
Total Adjusted EBITDA(2) margin (continuing and discontinued operations) % 19% 20%
Adjusted Operating Profit(3) from continuing operations (16.6) 1.2 -1,507% -1,451%
Net debt(4) (49.0) (65.5)
* 2023 numbers have been restated to reflect changes to the ongoing
continuing business following the decision to sell the Genetics business area
during the year (Note 5).
1 EBITDA is earnings/(loss) before interest, tax, depreciation and
amortisation and impairment. See income statement.
2 Adjusted EBITDA is EBITDA¹ before exceptional and
acquisition-related items. See income statement.
3 Adjusted Operating Profit is operating loss before exceptional and
acquisition-related items and amortisation of intangible assets excluding
development costs.
4 Net debt is cash and cash equivalents less loans, borrowings and
lease obligations. In FY24, this is after £22.3m of loans and borrowings have
been transferred to held for sale for the Genetics business. Net debt includes
£3.6m (FY23: £19.9m) relating to lease obligations, and a further £7.3m
included within the £22.3m in held for sale for Genetics. See Notes 13.
5 % CER is the change year on year translating current figures using
last year's foreign exchange rates.
Overview of reported financial results
A note on the presentation of results
On 22 January 2024, the Board announced the decision to undertake a formal
review of the Group's strategic options including a potential sale of the
Group as a whole or of one or more business areas. As at 30 September, the
Board assessed that discussions around a potential sale of the Genetics
business area were on terms which they were prepared to recommend was reaching
an advanced stage and that a sale was therefore highly probable, meeting
conditions in IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations for treatment as 'Held for Sale' and 'Discontinued Operations'.
Therefore, Genetics has been treated as discontinued operations (Note 5) and
the assets and liabilities have been transferred into Assets and Liabilities
Held for Sale (Note 13).
In FY24, the Group's focus was on maintaining operational 'business as usual'
while the formal Strategic Review was conducted.
In this context we focused on delivering commercial results while responding
to the challenges presented by difficult market conditions and operational
matters arising, both planned and unplanned.
Advanced Nutrition produced robust results in light of continued tough
conditions in the shrimp markets and a delay in the expected recovery of
demand, demonstrating the resilience of the business model. Strong commercial
focus resulted in an increase in revenues in constant currency despite reduced
prices in Artemia caused by a change in product mix sold. Genetics reported
increased Adjusted EBITDA despite lower sales against the prior year which
benefitted by supply constraints experienced by competitors. Health has taken
its CleanTreat® supply vessels out of commission while opportunities for more
cost effective, customer owned delivery mechanisms are explored. All of these
factors led to a reduction in total revenues (including discontinued Genetics
revenues) of £147.7m in the year (2023: £169.7m).
We continued to manage costs across the Group very closely. Operating costs
from the continuing operations decreased by £7.2m equivalent to 20% to
£29.6m (FY23 restated: £36.8m) from a combination of the benefits of
restructuring actions in Health, Advanced Nutrition and Corporate and the
absence of bonuses awarded for the year as incentive targets have not been
met. Expensed R&D from continuing operations remained at the same modest
level as last year at £2.4m.
Adjusted EBITDA from continued operations decreased to £11.9m (2023 restated:
£17.0m) driven by lower margin in Advanced Nutrition due to lower Artemia
prices, a change in product mix and higher logistic costs caused by trade
route disruptions, and the lower demand and subsequent pause in supply of
Ectosan® Vet and CleanTreat® in Health.
Business performance
Revenue AEBITDA(2) AEBITDA
margin %
Adjusted measures (£m) 2024 2023 % AER % CER(5) 2024 2023 % AER % CER(5)
2024 2023
Genetics 57.4 65.8 -13% -8% 14.8 14.4 3% 9% 26% 22%
Advanced Nutrition 75.9 78.5 -3% 5% 14.4 18.4 -22% -16% 19% 23%
Health 14.5 25.5 -43% -41% 2.1 4.8 -57% -55% 14% 19%
Corporate 4.0 5.7 -30% -30% (2.6) (3.3) 21% 21%
Inter-segment sales (4.1) (5.8) 29% 29% - - - -
Total Group including
discontinued operations 147.7 169.7 -13% -7% 28.6 34.2 -16% -10% 19% 20%
Less: discontinued operations
(Note 5) (57.4) (65.8) (16.7) (17.3)
Total Group continuing 90.4 104.0 -13% -6% 11.9 17.0 -30% -24% 13% 16%
Genetics excluding FV uplift 57.4 65.8 -13% -8% 15.1 14.5 4% 10% 26% 22%
Total group excluding FV uplift 147.7 169.7 -13% -7% 28.9 34.3 -16% -10% 20% 20%
Following the Strategic Review, the Genetics business area was classified as
held for sale at the year end, and its results classified as 'discontinued
operations'.
Adjusted measures
We continue to use adjusted results as our primary measures of financial
performance. We believe that these adjusted measures enable a better
evaluation of our underlying performance. This is how the Board monitors the
progress of the Group.
We use growth at constant exchange rate metrics when considering our
performance, in which currency balances are retranslated at the same exchange
rates in use for the prior year to illustrate growth on a currency
like-for-like basis.
In line with many of our peers in the sector, we highlight expensed R&D on
the face of the income statement separate from operating expenses.
Furthermore, we report earnings before interest, tax, depreciation and
amortisation ("EBITDA") and EBITDA before exceptional and acquisition and
disposal related items ("Adjusted EBITDA"). The activities of the Group's
equity accounted investees are closely aligned with the Group's principal
activities, as these arrangements were set up to exploit opportunities from
the Intellectual Property ("IP") held within the Group. As a result, to ensure
that adjusted performance measures are more meaningful, the Group's share of
the results of these entities is included within Adjusted EBITDA.
We also report this adjusted measure after depreciation and amortisation of
capitalised development costs ("Adjusted Operating Profit") as the Board
considers this reflects the result after taking account of the utilisation of
the invested production capacity and right-of-use assets.
In addition, in line with the salmon industry, we also report gross profit and
AEBITDA excluding fair value uplift under IAS 41. Available liquidity, being
cash and undrawn facilities, is an important metric for management of the
business as it gives a measure of the available liquid funds and is also a key
financial covenant in the Group's main debt facilities.
Advanced Nutrition
FY24 was a difficult year for Advanced Nutrition with the shrimp market
remaining soft throughout the year coupled with some forex headwinds. Recovery
in the market had been expected earlier in the year, but despite some green
shoots appearing, these have not yet turned into full market growth.
Regulators and market participants have been taking steps to support the
sector with measures including a reduction in import duty in India and new
product development in Ecuador among those designed to promote growth. We
expect these measures to benefit our business in the medium term.
Against this backdrop, the business generated revenue of £75.9m in the year,
3% lower than the prior year (2023: £78.5m), but 5% higher than prior year at
constant currency. This resilient performance is testament to the strong
commercial focus of the team and the actions taken, including expansion of our
product offering and strengthening our presence in key markets, to optimise
our performance and competitive position. By product area sales of Diets were
in line with the prior year, while Artemia sales were -3%, and Health -17%.
The gross profit margin in Advanced Nutrition of 48% was down on last year
(2023: 56%) reflecting a change in product mix, low Artemia sales prices and
increased freight costs owing to global geopolitical conflicts. R&D costs
were slightly up on prior year at £2.3m (2023: £2.1m) as a result of the
attention given to expanding the product portfolio. However, this was offset
by a reduction in operating costs, which at £20.0m were 14% lower than the
prior year (2023: £23.4m) as the restructuring activities in the current and
prior year have shown benefits adding to the saving from no bonus being earned
in FY24. Adjusted EBITDA as a result of the above factors was down 22% (16%
down at constant exchange rate) on last year at £14.4m (2023: £18.4m).
Strategically we continue to take steps to optimise our operations, to expand
our product portfolio to address specific market opportunities and have plans
to strengthen our presence in certain key markets both directly and through
collaborations. We continue to expect market recovery in the short term, and
remain confident that we will continue to be resilient and well positioned to
exploit and benefit from that recovery.
Health
FY24 was a tough year for the Health business area, with lower demand for the
Ectosan® Vet and CleanTreat® purification throughout the year. While the
Ectosan® Vet treatment remains attractive to customers as a proven, highly
efficacious and environmentally friendly way of treating sea lice with high
fish health and welfare credentials, the total cost to the customer under the
PSV model is higher than other alternatives, and the operating model employed,
which relied on leased platform supply vessels ("PSVs") to carry the
CleanTreat® systems, has a high fixed cost, which is not economical for
Benchmark in times of low demand.
The focus of this business area has therefore been to change the operating
model in Norway, laying the ground work for moving the CleanTreat® systems
from leased PSVs and operated by Benchmark to a less costly customer
infrastructure. As part of this move, the two PSVs were demobilised during the
year, as planned, which reduced our exposure to the capital intensive setup
from prior years. The first vessel was decommissioned during Q2, and the
second during Q3. At end of the year the business had no CleanTreat® systems
in operation. The CleanTreat® systems are currently stored onshore pending
future customer commitment to remobilise them under a new operating model. The
rest of the organisation was subsequently restructured and streamlined
accordingly, maintaining the core expertise both to deliver Salmosan® Vet
treatments globally, and to relaunch Ectosan®Vet and CleanTreat® under the
new operational model in the future. The cost savings associated with the
restructuring helped to offset the reduction in revenues in the year.
Health reported revenue of £14.5m (2023: £25.5m) reflecting the lower demand
for, and subsequent pausing of, the Ectosan® Vet and CleanTreat® sea lice
solution. Ectosan® Vet and CleanTreat® delivered revenue of £6.7m in the
year (2023: £17.2m) including £1.8m relating to revenue for vessel-related
costs (2023: £4.8m). The reduction in this revenue stream was partially
offset by another good year for our second sea lice treatment, Salmosan® Vet,
which continued to be in high demand in the year delivering revenue of £7.8m
(2023: £8.3m).
Gross profit was £7.3m (2023: £12.3m), the reduction driven primarily from
reduced sales of Ectosan®Vet and CleanTreat®. Gross margin increased to 50%
(2023: 48%), due to reduction in costs associated with the demobilisation of
the CleanTreat® units in the second half of the year.
Cash and cost control continues to be a very key focus for this business area
and operating costs decreased to £5.1m (2023: £7.3m) following the
restructuring in the second half of the year as mentioned above and with no
bonus being earned in the year. Research and development also fell accordingly
to £0.1m (2023: £0.3m). Adjusted EBITDA for the business area was £2.1m
(2023: £4.8m); AEBITDA margin was 14% for 2023 (2023: 19%).
Genetics
As part of the Strategic Review conducted during the year, it was decided that
the Genetics business area would be sold. As a result, the operations of the
business have been included as discontinued operations with a resulting
restatement of the prior year figures in the income statement (see Note 5) and
the balance sheet items have been transferred to assets and liabilities held
for resale (see Note 13).
Total revenues of £57.4m (2023: £65.8m) were down by 13%, 8% in constant
currency. The main driver of lower revenues was a decrease in egg revenues of
16% from £45.6m in 2023 to £38.5m in the year.
Egg volumes of 286 million were 49 million lower than prior year for two
reasons: firstly 2023 sales were favourably impacted by supply difficulties
experienced by our main competitor; and secondly, we have had a shift in the
current year from direct egg sales to indirect sales through the Group's JV in
Norway, the benefit of which is reflected in EBITDA. Adding indirect sales
made by Salmar Genetics to the direct sales made by Benchmark Genetics, the
total volume of eggs sold incorporating Benchmark's genetics in 2024 was 340
million (2023: 359 million).
Despite forex headwinds impacting NOK in particular, Genetics delivered a good
result at AEBITDA level compared to prior year which had benefitted from
supply constraints in the salmon egg market. Adjusted EBITDA of £14.8m was
£0.4m ahead of prior year and
£1.3m ahead in constant currency; after excluding fair value, AEBITDA of
£15.1m was £0.6m ahead of prior year (£1.5m ahead of prior year in constant
currency.)
In non-product-based revenue streams, revenues from harvested fish were aided
by early harvest of fish held under our broodstock licence, resulting in
income in the year of £11.6m (2023: £11.1m). We no longer generate royalties
from use of our genetic IP because the expected unwind of contracts is now
complete, whereas last year we reported royalty income of £0.5m. Genetic
Services delivered higher revenues of £1.7m in the year (2023: £1.2m), with
revenues from this income stream expected to increase in future years as we
build on the strength and depth of our recently expanded genetics team and our
IP in the business. Revenues from other products totalled £5.6m (2023:
£7.1m).
Gross profit from continuing operations reduced by 12% in 2024 to £26.4m
(2023: £29.9m) largely as a result of lower revenues, with a one percentage
increase in gross margin to 46% (2023: 45%). Production costs in the
business are relatively fixed, so we were pleased that we were able to control
costs in this area. The fair value of biological assets fell in the year by
£0.2m (2023: fall of £0.1m).
The shrimp genetics business has benefited from the restructuring programme
undertaken in the year. Headcount and operating costs were both reduced
significantly from the exercise (and with no bonus being earned in the year)
such that, despite revenues increasing only slightly to £1.3m (2023: £1.2m),
AEBITDA losses reduced significantly from £3.6m to £1.8m. This provides a
good platform for future growth.
Despite the overall decline in egg sales in the Group, the salmon egg business
in Chile continued on its growth trajectory, and the business achieved egg
sales of 19 million in the year (2023: 7 million). With these increased sales
and the related increase in biological assets, the business achieved a
positive Adjusted EBITDA of £1.0m in 2024 (2023: AEBITDA loss £3.0m).
Salmar Genetics, our joint venture with Salmar AS, showed great progress in
the year, with our share of profits of £1.3m (2023: £0.1m) arising from a
much- improved operational performance from this entity. The business sold 54
million eggs during the year versus 25 million in the previous year, the vast
majority to Salmar AS. Some of this increase in egg sales came at the expense
of direct sales by Benchmark, but we achieve a similar profit per egg
regardless of whether the sales are made direct to Salmar or via the joint
venture.
All these factors contributed to increased Adjusted EBITDA of £14.8m (2023:
£14.4m) and AEBITDA margin of 26% (2023 restated: 22%). AEBITDA excluding
fair value was £15.1m (2023: 14.5m) with an AEBITDA margin of 26% (2023:
22%).
The Genetics business area incurred exceptional costs of £1.8m during the
year (2023: £nil) relating to write-off of biological assets and cleaning
costs relating to the ISA incidents at Salten, reorganisation of the shrimp
business and residual closure costs of the tilapia business.
Research and development
Expensed Total expensed and capitalised
As % of sales As % of sales As % of sales As % of sales
R&D by business area (£m) 2024 2023 2024 2023
Genetics 3.3 6% 3.8 6% 3.3 6% 3.8 6%
Advanced Nutrition 2.3 3% 2.1 3% 2.3 3% 2.2 3%
Health 0.1 1% 0.3 1% 0.3 2% 0.8 4%
Total research and development 5.7 4% 6.1 4% 5.9 4% 6.8 4%
Less: discontinued operations - Genetics (3.3) (3.8) (3.3) (3.8)
Total research and development - continuing 2.4 3% 2.4 2% 2.6 3% 3.0 3%
Total expensed R&D activities (including discontinued operations - Note 5)
decreased in the year by £0.4m with Genetics continuing good cost
optimisation in this area while focusing on improvements in the breeding
nucleus to develop new disease and parasitic resistant traits as well as
growth traits which we can breed into our products. Health spending remained
low due to their significantly reduced R&D programmes. Advanced
Nutrition's focus is on expanding our product portfolio and driving growth
through product improvements. Capitalised development costs within the Health
business area remain at a low level at £0.2m (2023: £0.5m).
Other operating costs
As % of sales As % of sales
Operating expenses by business area (£m) 2024 2023
Genetics 9.6 17% 11.7 18%
Advanced Nutrition 20.0 26% 23.4 30%
Health 5.1 35% 7.3 29%
Corporate (net) 2.6 3.3
Total operating expenses 37.3 25% 45.6 27%
Less: discontinued operations Genetics (7.7) (8.9)
Total operating expenses - continuing 29.6 33% 36.8 35%
Other operating costs, including those for discontinued businesses, fell
£8.3m to £37.3m in the year with reductions in all business areas. These
figures include £0.5m in FY23 for the tilapia operations which were
discontinued and divested in the prior year. Cash and cost control continues
to be a focus for all areas of the business, and each business area has been
subject to some restructuring activity in response. While a significant
portion of the saving year on year relates to the absence of bonus payments
due to targets not been met £3.5m), cost savings have also been made
following the restructuring activity. With both of these factors, even on the
reduced revenues in the year, operating costs for all businesses (including
discontinued operations) as a percentage of sales fell to 25% (2023: 27%) and
fell to 33% (2023: 35%) for continuing operations.
Exceptional items (continuing operations)
Exceptional items (£m) 2024 2023
Acquisition related items 0.2 0.7
Exceptional restructuring costs 5.7 0.9
Disposal related items (0.3) (0.2)
Costs associated with the Oslo listing - 2.6
Exceptional items included in discontinued operations 1.8 3.9
Total exceptional items 7.4 7.8
less discontinued operations - Genetics (Note 5) (1.8) (3.9)
Exceptional items within continuing activities 5.6 3.9
Exceptional costs mainly relate to exceptional restructuring activity in the
year, including costs associated with the Strategic Review and potential sale
of Genetics (£4.5m), and redundancy costs and dilapidation provisions from
restructuring in Health, Advanced Nutrition and Corporate (£1.2m). Included
within these are the costs of reducing resource as Ectosan® Vet/CleanTreat®
operations are paused while alternative delivery solutions are explored
without the high fixed costs associated with Benchmark leasing its own
vessels.
These costs, together with costs from an aborted acquisition from the prior
year (£0.2m) were partially offset by income from an asset disposal from a
discontinued Health vaccine operation and exit from a longstanding lease
(£0.3m).
£1.8m of exceptional costs included in discontinued operations relating to
Genetics include certain costs following the closure of the tilapia operations
in FY23 (£0.4m), restructuring costs in relation to the shrimp genetics
operations (£0.5m) and costs incurred in relation to uninsured culling of
broodstock and clean-up costs after two separate isolated ISA incidents
(£0.8m).
Depreciation, amortisation and impairments
Depreciation and impairment of tangible assets including discontinued
operations and right-of-use assets was £16.3m (2023: £18.7m), including an
impairment charge of £2.5m (2023: £nil) on assets written down in Health as
a result of the restructuring and the sale of a property no longer required by
the business and impairment of CleanTreat assets as part of the
decommissioning of the PSVs. The reduction in the year relates to lower
depreciation and impairment charges on right-of-use assets under IFRS 16
(including discontinued operations) which was £7.0m (2023: £10.3m) as the
PSV leases in Health ended during the year.
Amortisation and impairment of intangible assets including discontinued
operations totalled £32.5m (2023: £18.5m). This includes an impairment
charge of £13.3m (2023: £0.5m) within Health relating to capitalised
development costs on Ectosan® Vet and CleanTreat® written off as the
likelihood of recovery of the value of these through sales in the short term
reduced when the PSVs were taken out of service, as well as impairment charge
of £2.0m (2023: £nil) within Advanced Nutrition for capitalised development
costs for products no longer planned to be used in the short term. Excluding
the impairment charges, amortisation fell slightly in the year as the assets
arising on previous acquisitions become fully amortised. We expect the
amortisation charge to reduce further after FY25 as more of the Advanced
Nutrition ("INVE") acquired assets also become fully written down.
Included within the above, the depreciation charge within the discontinued
Genetics operations was £5.4m (2023: £4.7m) including £1.8m relating to
depreciation of right-of-use assets (2023: £1.0m). The amortisation charge
within discontinued operations was £1.6m (2023: £1.9m).
Net finance costs
Net finance expenses (£m) 2024 2023
Interest income - (0.3)
Foreign exchange losses 1.2 0.8
Interest on bond and bank debt 7.5 7.2
Amortisation of deferred financing fees 1.0 0.6
Movements in hedging instruments 0.2 (2.2)
Finance lease interest 0.5 1.0
Net finance costs within discontinued operations 0.6 0.2
Total net finance expenses 11.0 7.4
Less: discontinued operations - Genetics (Note 5) (0.6) (0.2)
Total net finance expenses 10.4 7.2
The Group incurred net finance costs of £10.4m during the year (2023
restated: £7.2m). Included within this was interest charged on the Group's
interest-bearing debt facilities (including leases) of £8.0m (2023 restated:
£8.2m), with the increase from higher utilisation of the RCF facility during
the year being offset by lower lease interest as the PSV leases ended in the
year. In addition, a further £1.0m was charged on amortisation of deferred
finance costs (2023: £0.6m), with the increase related to additional fees
from refinancing the RCF in the prior year.
Net foreign exchange losses of £1.2m (2023 restated: losses of £0.8m) arose
due to the movement in exchange rates on intercompany loans and external debt,
and movements on the hedging instruments associated with hedging
ineffectiveness in accounting for the Group's NOK bond debt resulted in losses
of £0.2m (2023: gain of £2.2m).
Financing costs relating to the discontinued Genetics operations were £0.6m
(2023 restated: £0.2m) with interest of loans and leases of £2.0m (2023
restated: £1.7m) offset by forex gains of £1.1m (2023 restated: £1.1m) and
interest income of £0.3m (2023 restated: £0.3m).
Statutory loss before tax
The loss before tax from continuing operations for the year at £45.9m is
higher than the prior year (2023 restated: loss of £24.7m). This is mainly
due to the tough year's trading producing a lower gross margin, higher
exceptionals as a result of the Strategic Review, the impairment of the
capitalised development costs within Health and the higher net finance costs
all as noted above.
Taxation
There was a tax credit on the loss for the year of £1.6m (2023 restated:
£1.2m credit), with deferred tax credits mainly from amortisation of
intangibles arising on consolidation from historic acquisitions offsetting a
low tax charge on profits in Nutrition which has endured a tough year.
Loss from continued operations after tax
As a result of the above, the reported loss after tax for continuing
operations was £44.3m (2023 restated: £23.4m).
Other comprehensive income
In addition to the loss for the year, there was a significant movement of
£21.3m in other comprehensive income resulting from movements in the foreign
exchange and hedging reserves. The forex loss of £20.5m was driven by USD and
NOK impacting the retranslation of foreign currency denominated subsidiary
balance sheets into GBP offset by amounts designated as net investment hedges,
together with long term internal loans not expected to be repaid in the
foreseeable future which are treated like equity with the movements going
directly to reserves. These were offset by £0.8m credit into the hedge
reserve from hedge accounting on cash flow hedges.
Discontinued operations
Profit (net of tax) from discontinued operations, which comprise the Genetics
business area was £5.2m (2023 restated: £1.9m).
Reported loss for the year
The total loss for the was £39.1m (2023 restated: loss of £21.6m).
Loss per share
Basic loss and diluted loss per share were both 5.34p (2023: loss per share
3.16p). The movement year on year arises predominantly from the result for the
year, with only a modest increase in the number of shares in issue arising
from the exercise of share options during the year.
Dividends
No dividends have been paid or proposed in either 2024 or 2023 and the Board
is not recommending a final dividend in respect of the year ended 30 September
2024.
Biological assets
A feature of the Group's net assets is its investment in biological assets,
which under IAS 41 are stated at fair value. Following the decision to sell
the Genetics business, all of the group's biological assets at 30 September
2024 are included in assets held for sale as shown in note 13.
At 30 September 2024, the carrying value of biological assets was £43.1m
(2023: £46.0m). This decrease is due principally to the reduction in all
categories of biological asset available for sale in FY24 compared to FY23.
Intangibles
Additions to intangibles were £0.4m (2023: £0.8m) with small investment in
software and patents in Genetics and capitalised development costs incurred on
Salmosan® Vet in Health.
Following the decommissioning of the CleanTreat® vessels in Health, the short
term recovery of the value of Ectosan® and CleanTreat® capitalised
development costs was considered to be remote, and so these were fully
impaired with a resulting charge of £13.3m. In addition, an impairment charge
of £2.0m has been incurred in Advanced Nutrition for capitalised development
costs for products no longer likely to be used in the short term. This is in
addition to the normal amortisation charge on intangibles which totalled
£17.2m (2023: £18.0m) for continuing and discontinued operations.
Intangible assets with net book value of £43.0m within Genetics were
transferred into assets held for sale following the decision to sell the
business.
Capital expenditure
We have continued to monitor and control cash during the year resulting in
modest fixed asset additions during the year of £4.3m (2023: £6.0m) focused
on business critical areas. Expenditure was incurred as follows:
* Health: £0.9m (2023: £0.7m)
* Genetics: £1.9m (2023: £3.4m)
* Nutrition: £1.5m (2023: £1.9m)
The additions within Health relate to an increase in the provisions to
demobilise the CleanTreat® units. Capex within Genetics mainly related to
essential refurbishment work on equipment and tanks at our facilities in
Iceland. In Advanced Nutrition, we continued to invest where necessary in the
two manufacturing facilities to support growth and operational efficiency.
Cash flow, liquidity and net debt
Movement in net debt (£m) 2024 2023
Net debt at 30 September 2023/2022 (65.5) (73.7)
Cash generated from operations excluding working capital and taxes paid 22.6 29.6
Investment in working capital (13.8) (1.1)
Interest and tax (15.5) (17.1)
Capital expenditure (3.9) (6.8)
Investment in associates (0.2) (0.6)
Share issue 0.1 10.9
Additions to/modifications of leases (IFRS 16) - (3.7)
Other disposal activities 0.9 0.2
Foreign exchange on cash and debt 4.9 4.3
Proceeds from previous year disposals of subsidiaries - 1.3
Acquisition of subsidiaries net of cash/debt acquired - (0.2)
Acquisition of non-controlling interest - (8.0)
Other non-cash movements (0.9) (0.6)
Transfer to assets held for sale 22.3 -
Net debt at 30 September 2024/2023 (49.0) (65.5)
Cash flow
Despite continued focus on cash preservation and cash conversion, the
difficult trading conditions noted above led to a reduction in cash generated
from operations to £22.6m (2023: £29.6m). There was a large investment in
working capital of £13.8m compared to an outflow of £1.1m last year, with
the bulk in Advanced Nutrition (£6.4m) and Genetics (£4.8m) and a lower
investment in Health (£2.2m). Interest and taxes were lower than last year at
£15.5m (2023: £17.1m) due to lower tax paid on lower profits in Nutrition.
Capital expenditure, both intangible and tangible, showed another decrease in
the year to £3.9m (2023: £6.8m) as we continue to moderate our capex.
Loans and borrowings within Genetics of £22.3m have been transferred into
assets held for sale.
Working capital
Working capital has increased in all business areas in the period driven by a
number of factors. In Advanced Nutrition, there was an increase in receivables
with customers taking longer to pay in tough market conditions, and an
increase in inventories due to the timing of large sales around the year end
compared to the prior year, with a large US sale taking place shortly after
the year end and a reduction in payables due to the timing of payments and no
bonus accrual at the year end. A £2.2m reduction in provisions arose in
Health as payments were made to decommission the PSVs in the year. The
increase in working capital invested in Genetics of £4.8m is mainly due to a
reduction in payables due to different timing of the harvest resulting in
earlier payment of the associated creditors and no bonus accrual at the year
end.
A significant amount of cash remains tied up with the working capital of the
Group and focus will continue to be on releasing that investment in the
future.
Borrowing facilities
The Group has a senior unsecured green bond issue of NOK 750 million, with an
expected maturity date of 27 September 2025. The bond has a coupon of three
months NIBOR + 6.5% p.a. with quarterly interest payments. The Group also has
a £20.0m revolving credit facility ("RCF") with a June 2025 maturity.
The interest rate on the facility is between 2.5% and 3.25% above compound
interest rate depending on leverage. In March 2024, this facility was extended
on the same terms by £7.5m, to a total facility of £27.5m, with the £7.5m
extension maturing on 27 March 2025. At 30 September 2024, there was £16.25m
drawn on this facility (2023: £7.75m).
Following the decision to sell Genetics in the year, the assets and
liabilities of the business were transferred to assets held for sale. This
includes the amounts owed under its borrowing facilities of £22.3m. This
balance arises from the facilities originally put in place within Benchmark
Genetics Salten AS to fund the building of the Salten salmon eggs facility,
which are ring-fenced without recourse to the remainder of the Group.
Although these facilities are not yet due, an agreement was made in the deal
reached after the year end for the sale of Genetics, that these would all be
settled from sales proceeds upon completion of the sale. At 30 September 2024,
these were as follows:
* term loan with Nordea Bank, which has a maturity date of
five years ending 15 January 2028 and an interest rate of 2.5% above three-
month NIBOR.
* 12-month working capital facility of up to NOK 20.0m
provided by Nordea Bank Norge Abp.
* term loan provided by Innovasjon Norge. The loan is a
12-and-a-half year term loan maturing in March 2031.
* an additional 15-year term loan provided by Innovasjon
Norge and maturing in July 2038.
* a loan provided by the minority shareholder Salten
Stamfisk AS. The loan attracts interest at 2.5% above three-month NIBOR and is
repayable on maturity of the Nordea loan above.
Cash and total debt
Net debt (£m) 2024 2023
Cash 23.1 36.5
NOK 750m bond (53.1) (57.6)
Other borrowings (15.3) (24.5)
Lease liabilities (3.6) (19.9)
Net debt (49.0) (65.5)
Borrowings within liabilities held for sale (22.3) -
Total net debt (71.7) (65.5)
The amount undrawn on the RCF, combined with the year-end cash balance of
£23.1m (2023: £36.5m), means the Group had total liquidity of £34.3m (2023:
£48.8m).
Covenants
Banking covenants for the NOK bond and RCF exist in relation to liquidity and
an 'equity ratio'. Liquidity, defined as 'freely available and unrestricted
cash and cash equivalents, including any undrawn amounts under the RCF', must
always exceed the minimum liquidity value, set at £10.0m. Available liquidity
at 30 September 2024 is £34.3m (2023: £48.8m). The equity ratio, defined as
'the ratio of Book Equity to Total Assets' must always exceed 40%. The equity
ratio at 30 September 2024 was 58% (2023: 60%). In addition, an equity to
asset ratio covenant exists for the Benchmark Genetics Salten AS debt with a
target threshold of 40%; this equity to asset ratio was 53% at 30 September
2024 (2023: 60%).
Going concern
As at 30 September 2024 the Group had net assets of £224.3m (30 September
2023: £282.6m), including cash of £23.1m (30 September 2023: £36.5m) as set
out in the consolidated balance sheet. The Group made a total loss for the
period of £39.1m (year ended 30 September 2023: loss £21.6m). As at 30
September 2024 the Company had net assets of £237.0m (2023: £363.2m),
including cash of £1.4m (2023: £0.3m) as set out on the Company Balance
Sheet. The Company made a loss for the year of
£128.0m (2023: profit £4.2m).
The group meets its day-to-day working capital requirements using a green bond
and RCF together with cash. During the year on 26 March 2024, an additional
facility of £7.5m was added to the existing RCF with an expiry date of 31
March 2025. The original £20m RCF term remains unaltered, ending on 27 June
2025. Furthermore, the Group's unsecured NOK 750m bond is due to expire within
the next year in September 2025. The bond and RCF are subject to covenants
that are tested quarterly.
As described in note 16, on 25 November, an agreement was signed to sell the
whole Genetics business for consideration of up to £260m, with £230m
received up front and up to £30m earnout receivable in three years.
Completion of the sale is subject to shareholder approval and anti-trust
clearances which are expected to be received within three months. If and when
the sale completes, the proceeds will be used to repay debt and the directors
will then consider the ongoing needs of the remaining business to ensure that
adequate operational liquidity is available for the continuing business for
the forecast period.
In the absence of completion of the deal, the forecast would require
continuing finance facilities to be available to the Group. On the basis that
the sale of Genetics does not complete, the Directors have reviewed forecasts
and cash flow projections for a period of 12 months (the going concern
assessment period) including downside sensitivity assumptions in relation to
trading performance across the Group to assess the impact on the Group's
trading and cash flow forecasts and on the forecast compliance with the
covenants included within the Group's financing arrangements.
In the downside analysis performed, the Directors considered severe but
plausible scenarios on the Group's trading and cash flow forecasts. Key
downside sensitivities modelled included assumptions on lower sales growth
from a possible slower recovery in the shrimp market in Advanced Nutrition and
have not included any sales from relaunching Ectosan®/CleanTreat® sales
within Health.
The restructuring of the Health business area which currently focuses on the
Salmosan business has derisked the cash utilisation improving the likelihood
of cash generation within that business area for the foreseeable future, and
Ectosan®/CleanTreat® sales will only be relaunched with customer investment
to mitigate the Group's cashflow exposure. Additional downside sensitivities
have been identified and modelled within the discontinued Genetics business
for slower commercialisation of SPR shrimp, slower salmon egg sales growth in
Chile and removal of an additional financing opportunity. Further mitigating
measures within the control of management have been identified should they be
required in response to any or all of these sensitivities, including
reductions in areas of discretionary spend, tight control over new hires,
deferral of capital projects and temporary hold on R&D for non- imminent
products.
As a fallback position in the event that the sale of Genetics does not
complete, a revised forecast (including the severe but plausible downside
sensitivities) has been put together showing that the group would require a
refinancing of its existing facilities, with the RCF expiring on 31 March and
27 June 2025 and the green bond expiring in September 2025, together with
additional funding of up to £30m from combination of an equity raise and
additional debt facilities. Under those forecasts, the Group will remain
compliant with covenants through the going concern assessment period. The
Directors are confident that the existing facilities due to expire within the
next year can be renewed or replaced before expiry with the trading platform
showing resilience to market conditions and other challenges presented during
FY24 and relationships with finance providers and key shareholders strong.
Based on their assessment, the Directors believe it remains appropriate to
prepare the financial statements on a going concern basis. However, while the
Directors remain confident that either the deal to sell the Genetics business
will proceed as planned, or that the current facilities will be renewed or
replaced in the next 12 months before expiry on 31 March 2025 alongside
additional funding being secured through a combination of an additional debt
facilities and the completion of an equity raise, the requirement for either
the sale of the Genetics business to complete or the ongoing financing to be
secured represents a material uncertainty that may cast significant doubt on
the Group's and Company's ability to continue as a going concern and therefore
to continue realising their assets and discharging their liabilities in the
normal course of business. The financial statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
Consolidated Income Statement
for the year ended 30 September 2024
2024 2023
£000 Restated*
Notes £000
Continuing operations
Revenue 90,365 103,963
Cost of sales (46,418) (47,879)
Gross profit 43,947 56,084
Research and development costs (2,443) (2,350)
Other operating costs (29,582) (36,753)
Adjusted EBITDA2 11,922 16,981
Exceptional - restructuring/acquisition related items 4 (5,581) (3,904)
EBITDA1 6,341 13,077
Depreciation and impairment 7 (10,949) (14,010)
Amortisation and impairment 9 (30,891) (16,601)
Operating loss (35,499) (17,534)
Finance cost 3 (14,209) (13,342)
Finance income 3 3,783 6,177
Loss before taxation (45,925) (24,699)
Tax on loss 1,646 1,223
Loss from continuing operations (44,279) (23,476)
Discontinued operations
Profit from discontinued operations, net of tax 5 5,159 1,912
(39,120) (21,564)
Loss for the year attributable to:
- Owners of the Parent (39,464) (23,146)
- Non-controlling interest 344 1,582
(39,120) (21,564)
Earnings per share
Basic loss per share (pence) 6 (5.34) (3.16)
Diluted loss per share (pence) 6 (5.34) (3.16)
Earnings per share - continuing operations
Basic loss per share (pence) 6 (5.99) (3.21)
Diluted loss per share (pence) 6 (5.99) (3.21)
£000 £000
Adjusted EBITDA from continuing operations 11,922 16,981
Adjusted EBITDA from discontinued operations 16,698 17,257
Total Adjusted EBITDA 28,620 34,238
1 EBITDA - earnings before interest, tax, depreciation, amortisation
and impairment.
2 Adjusted EBITDA - EBITDA before exceptional and
acquisition-related items.
* 2023 numbers have been restated to reflect the results of the Genetics
business being classified as discontinued operations in FY24 in line with IFRS
5 following the decision to sell the business area (see Note 5).
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2024
2023
2024 Restated
£000 £000
Loss for the year (39,120) (21,564)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences (20,528) (23,475)
Cash flow hedges - changes in fair value (3,505) (2,123)
Cash flow hedges - reclassified to profit or loss 2,687 2,623
Other comprehensive income for the period (21,346) (22,975)
Total comprehensive income for the period (60,466) (44,539)
Total comprehensive income for the period attributable to:
- Owners of the Parent (60,259) (45,404)
- Non-controlling interest (207) 865
(60,466) (44,539)
Total comprehensive income for the period attributable to:
- Continuing operations (54,122) (37,965)
- Discontinued operations* (6,137) (7,439)
(60,259) (45,404)
* Total comprehensive income for the period relating to
discontinued operations for FY24 includes the profit of £5,159,000 (Note 5)
(2023: £1,912,000) and foreign exchange translation differences loss of
£11,296,000 (2023: £9,351,000).
Consolidated Balance Sheet
as at 30 September 2024
2024 2023
Notes £000 £000
Assets
Property, plant and equipment 7 10,107 73,411
Right-of-use assets 8 4,052 19,804
Intangible assets 9 115,527 206,077
Equity-accounted investees 2,315 3,558
Other investments - 14
Biological assets 11 - 18,406
Non-current assets 132,001 321,270
Inventories 23,674 25,269
Biological assets 11 - 27,586
Corporation tax asset 347 -
Trade and other receivables 12 42,539 59,795
Cash and cash equivalents 23,088 36,525
89,648 149,175
Assets held for sale 13 163,252 850
Current assets 252,900 150,025
Total assets 384,901 471,295
Liabilities
Trade and other payables 14 (30,102) (47,329)
Loans and borrowings 15 (69,233) (20,045)
Corporation tax liability - (6,422)
Provisions (233) (1,280)
(99,568) (75,076)
Liabilities directly associated with the assets held for sale 13 (46,697) -
Current liabilities (146,265) (75,076)
Loans and borrowings 15 (2,837) (81,954)
Other payables 14 (1,607) (6,842)
Deferred tax (9,923) (24,106)
Provisions - (700)
Non-current liabilities (14,367) (113,602)
Total liabilities (160,632) (188,678)
Net assets 224,269 282,617
Issued capital and reserves attributable to owners of the Parent
Share capital 740 739
Additional paid-in capital 37,490 37,428
Capital redemption reserve 5 5
Retained earnings 146,080 183,489
Hedging reserve (1,021) (203)
Foreign exchange reserve 34,970 54,947
Equity attributable to owners of the parent 218,264 276,405
Non-controlling interest 6,005 6,212
Total equity and reserves 224,269 282,617
The financial statements were approved and authorised for issue by the Board
of Directors on 12 December 2024 and were signed on its behalf by:
Septima Maguire
Chief Financial Officer
Company number: 04115910
Consolidated Statement of Changes in Equity
for the year ended 30 September 2024
Share capital Additional paid-in share capital Other reserves Hedging reserve Retained earnings Total attributable to equity holders of parent Non-controlling interest Total equity
£000 £000 £000 £000 £000 £000 £000 £000
As at 1 October 2022 704 420,824 77,710 (703) (185,136) 313,399 9,886 323,285
Comprehensive income for the year
(Loss)/profit for the year - - - - (23,146) (23,146) 1,582 (21,564)
Other comprehensive income - - (22,758) 500 - (22,258) (717) (22,975)
Total comprehensive income for the year - - (22,758) 500 (23,146) (45,404) 865 (44,539)
Contributions by and distributions to owners
Share issue 35 12,985 - - - 13,020 - 13,020
Share issue costs recognised
through equity - (2,146) - - - (2,146) - (2,146)
Cancellation of part of share premium
account - (394,235) 394,235 -
Share-based payment - - - - 1,006 1,006 - 1,006
Total contributions by and distributions to owners 35 (383,396) - - 395,241 11,880 - 11,880
Changes in ownership
Acquisition of NCI - - - - (3,470) (3,470) (4,539) (8,009)
Total changes in ownership interests - - - - (3,470) (3,470) (4,539) (8,009)
Total transactions with owners of the Company 35 (383,396) - - 391,771 8,410 (4,539) 3,871
As at 30 September 2023 739 37,428 54,952 (203) 183,489 276,405 6,212 282,617
Comprehensive income for the year
(Loss)/profit for the year - - - - (39,464 (39,464) 344 (39,120)
Other comprehensive income - - (19,977) (818) - (20,795) (551) (21,346)
Total comprehensive income for the year - - (19,977) (818) (39,464) (60,259) (207) (60,466)
Contributions by and distributions to owners
Share issue 1 62 - - - 63 - 63
Share-based payment - - - - 2,055 2,055 - 2,055
Total contributions by and distributions to owners 1 62 - - 2,055 2,118 - 2,118
Total transactions with owners of the Company 1 62 - - 2,055 2,118 - 2,118
As at 30 September 2024 740 37,490 34,975 (1,021) 146,080 218,264 6,005 224,269
Consolidated Statement of Cash Flows
for the year ended 30 September 2024
Notes 2024 2023
£000 £000
Cash flows from operating activities
Loss for the year (39,120) (21,564)
Adjustments for:
Depreciation and impairment of property, plant and equipment 7 9,319 8,453
Depreciation and impairment of right-of-use assets 8 7,001 10,260
Amortisation and impairment of intangible fixed assets 9 32,529 18,495
Profit on sale of property, plant and equipment (416) (121)
Loss on sale of discontinued operation - 3,774
Finance income (430) (2,802)
Finance costs 11,293 10,535
Profit on disposal of investments in joint ventures (42) -
Share of (profit)/loss of equity-accounted investees, net of tax (1,288) 32
Foreign exchange loss/(gain) 1,179 (1,814)
Share-based payment expense 2,054 1,005
Tax expense 495 3,365
Decrease/(increase) in trade and other receivables (1,136) (6,570)
Decrease in inventories 89 2,877
Increase in biological and agricultural assets (718) (1,659)
(Decrease)/increase in trade and other payables (9,974) 3,909
(Decrease)/increase in provisions (2,012) 386
8,823 28,561
Income taxes paid (6,819) (8,556)
Net cash flows generated from operating activities 2,004 20,005
Investing activities
Acquisition of subsidiaries - (48)
Purchase of investments in associates (209) (558)
Receipts from disposal of subsidiaries, joint ventures and other investments 37 1,250
Purchases of property, plant and equipment (3,509) (5,953)
Proceeds from sales of intangible assets 32 -
Purchase of intangibles (268) (196)
Capitalised research and development costs (149) (632)
Proceeds from sale of fixed assets 804 227
Cash receipts from swap contracts - 11
Interest received 430 627
Net cash flows used in investing activities (2,832) (5,272)
Financing activities
Proceeds of share issues - 13,000
Proceeds from exercise of share options 63 20
Share-issue costs recognised through equity - (2,146)
Acquisition of minority interests in subsidiaries - (8,009)
Proceeds from bank or other borrowings 8,196 21,847
Repayment of bank or other borrowings (1,990) (18,470)
Interest and finance charges paid (9,119) (9,131)
Repayments of lease liabilities (8,121) (9,438)
Net cash used in financing activities (10,971) (12,327)
Net (decrease)/increase in cash and cash equivalents (11,799) 2,406
Cash and cash equivalents at beginning of year 36,525 36,399
Effect of movements in exchange rate (1,638) (2,280)
Cash and cash equivalents at end of year 23,088 36,525
1. Basis of preparation
These audited results have been prepared on the basis of the accounting
policies which are to be set out in Benchmark Holdings Plc's annual report and
financial statements for the year ended 30 September 2024. Those policies have
been consistently applied to all the years presented unless otherwise stated.
These Group financial statements were prepared and approved by the Directors
in accordance with UK-adopted international accounting standards and in
accordance with IFRS adopted pursuant to Regulation (EC) No. 1606/2002 as it
applied in the European Union ("Adopted IFRS"). While the financial
information included in this preliminary statement has been prepared on the
basis of the requirements of IFRSs in issue, this statement does not itself
contain sufficient information to comply with IFRS.
The financial information set out above does not constitute the company's
statutory accounts for the years ended 30 September 2024 or 2023 but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the registrar of companies, and those for 2024 will be delivered in due
course. The auditor has reported on those accounts. The auditor's report for
2024 was (i) unqualified, (ii) contained a material uncertainty in respect of
going concern to which the auditor drew attention by way of emphasis without
modifying their report and (iii) did not contain a statement under section
498(2) or (3) of the Companies Act 2006. Their report for the accounts of 2023
was (i) unqualified and (ii) did not contain a statement under section 498(2)
or (3) of the Companies Act 2006.
The financial statements are prepared on the historical cost basis except that
the following assets and liabilities are stated at their fair value: certain
financial assets and financial liabilities (including contingent consideration
receivable and derivatives) and biological assets measured at fair value.
Non-current assets and disposal groups held for sale are stated at the lower
of previous carrying amount and fair value less costs to sell.
Going concern
As at 30 September 2024 the Group had net assets of £224.3m (30 September
2023: £282.6m), including cash of £23.1m (30 September 2023: £36.5m) as set
out in the consolidated balance sheet. The Group made a total loss for the
period of £39.1m (year ended 30 September 2023: loss £21.6m).
The group meets its day-to-day working capital requirements using a green bond
and RCF together with cash. During the year on 26 March 2024, an additional
facility of £7.5m was added to the existing RCF with an expiry date of 31
March 2025. The original £20m RCF term remains unaltered, ending on 27 June
2025. Furthermore, the Group's unsecured NOK 750m bond is due to expire within
the next year in September 2025. The bond and RCF are subject to covenants
that are tested quarterly.
As described in note 16, on 25 November, an agreement was signed to sell the
whole Genetics business for consideration of up to £260m, with £230m
received up front and up to £30m earnout receivable in three years.
Completion of the sale is subject to shareholder approval and anti-trust
clearances which are expected to be received within three months. If and when
the sale completes, the proceeds will be used to repay debt and the directors
will then consider the ongoing needs of the remaining business to ensure that
adequate operational liquidity is available for the continuing business for
the forecast period.
In the absence of completion of the deal, the forecast would require
continuing finance facilities to be available to the Group. On the basis that
the sale of Genetics does not complete, the Directors have reviewed forecasts
and cash flow projections for a period of 12 months (the going concern
assessment period) including downside sensitivity assumptions in relation to
trading performance across the Group to assess the impact on the Group's
trading and cash flow forecasts and on the forecast compliance with the
covenants included within the Group's financing arrangements.
In the downside analysis performed, the Directors considered severe but
plausible scenarios on the Group's trading and cash flow forecasts. Key
downside sensitivities modelled included assumptions on lower sales growth
from a possible slower recovery in the shrimp market in Advanced Nutrition and
have not included any sales from relaunching Ectosan®/CleanTreat® sales
within Health.
The restructuring of the Health business area which currently focuses on the
Salmosan business has derisked the cash utilisation improving the likelihood
of cash generation within that business area for the foreseeable future, and
Ectosan®/CleanTreat® sales will only be relaunched with customer investment
to mitigate the Group's cashflow exposure. Additional downside sensitivities
have been identified and modelled within the discontinued Genetics business
for slower commercialisation of SPR shrimp, slower salmon egg sales growth in
Chile and removal of an additional financing opportunity. Further mitigating
measures within the control of management have been identified should they be
required in response to any or all of these sensitivities, including
reductions in areas of discretionary spend, tight control over new hires,
deferral of capital projects and temporary hold on R&D for non-imminent
products.
As a fallback position in the event that the sale of Genetics does not
complete, a revised forecast (including the severe but plausible downside
sensitivities) has been put together showing that the group would require a
refinancing of its existing facilities, with the RCF expiring on 31 March and
27 June 2025 and the green bond expiring in September 2025, together with
additional funding of up to £30m from combination of an equity raise and
additional debt facilities. Under those forecasts, the Group will remain
compliant with covenants through the going concern assessment period. The
Directors are confident that the existing facilities due to expire within the
next year can be renewed or replaced before expiry with the trading platform
showing resilience to market conditions and other challenges presented during
FY24 and relationships with finance providers and key shareholders strong.
Based on their assessment, the Directors believe it remains appropriate to
prepare the financial statements on a going concern basis. However, while the
Directors remain confident that either the deal to sell the Genetics business
will proceed as planned, or that the current facilities will be renewed or
replaced in the next 12 months before expiry on 31 March 2025 alongside
additional funding being secured through a combination of an additional debt
facilities and the completion of an equity raise, the requirement for either
the sale of the Genetics business to complete or the ongoing financing to be
secured represents a material uncertainty that may cast significant doubt on
the Group's and Company's ability to continue as a going concern and therefore
to continue realising their assets and discharging their liabilities in the
normal course of business. The financial statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
2. 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 based on the following business areas:
• Genetics - 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. Following management's decision to
sell the Group's Genetics business area, this has been classified as
discontinued operations in the income statement. However, the tables below
include the Genetics business and therefore show the total of continuing
activities and discontinued operations.
• Advanced Nutrition - manufactures and provides technically
advanced nutrition and health products to the global aquaculture industry.
• Health - following the divestment programme completed in the
previous year, the segment now focuses on providing health products to the
global aquaculture market.
For completeness, corporate and inter-segment sales are also shown. Corporate
sales represent revenues earned from recharging
certain central costs to the operating business areas, 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.
Advanced Nutrition Inter-segment
Genetics £000 Health Corporate sales Total
Year ended 30 September 2024 £000 £000 £000 £000 £000
Revenue 57,385 75,918 14,525 4,040 (4,142) 147,726
Cost of sales (31,006) (39,177) (7,251) - 85 (77,349)
Gross profit / (loss) 26,379 36,741 7,274 4,040 (4,057) 70,377
Research and development costs (3,276) (2,328) (115) - - (5,719)
Operating costs (9,563) (20,040) (5,104) (6,676) 4,057 (37,326)
Share of profit of equity-accounted investees, net of tax 1,288 - - - - 1,288
Adjusted EBITDA 14,828 14,373 2,055 (2,636) - 28,620
Exceptional - restructuring/acquisition related items (1,800) (290) (642) (4,649) - (7,381)
EBITDA 13,028 14,083 1,413 (7,285) - 21,239
Depreciation and impairment (5,371) (2,755) (8,257) 63 - (16,320)
Amortisation and impairment (1,638) (15,863) (15,025) (3) - (32,529)
Operating profit / (loss) 6,019 (4,535) (21,869) (7,225) - (27,610)
Finance cost (15,182)
Finance income 4,167
Loss before tax (38,625)
Year ended 30 September 2023 Genetics Advanced Health Corporate Inter-segment Total
£000 Nutrition £000 £000 sales £000
£000 £000
Revenue 65,791 78,503 25,514 5,747 (5,811) 169,744
Cost of sales (35,876) (34,704) (13,173) - 54 (83,699)
Gross profit / (loss) 29,915 43,799 12,341 5,747 (5,757) 86,045
Research and development costs (3,778) (2,071) (279) - - (6,128)
Operating costs (11,696) (23,354) (7,290) (9,064) 5,757 (45,647)
Share of profit of equity-accounted (32) - - - - (32)
investees, net of tax
Adjusted EBITDA 14,409 18,374 4,772 (3,317) - 34,238
Exceptional - restructuring/acquisition (3,913) (920) (509) (2,475) - (7,817)
related items
EBITDA 10,496 17,454 4,263 (5,792) - 26,421
Depreciation and impairment (4,703) (2,437) (11,559) (14) - (18,713)
Amortisation and impairment (1,894) (14,269) (2,329) (3) - (18,495)
Operating profit / (loss) 3,899 748 (9,625) (5,809) - (10,787)
Finance cost (15,082)
Finance income 7,670
Loss before tax (18,199)
Reconciliation of segmental information to IFRS measures - Revenue and Loss
before tax
Revenue
2023
2024 Restated
£000 £000
Total Revenue per segmental information 147,726 169,744
Less: revenue from discontinued operations 5 (57,361) (65,781)
Consolidated revenue 90,365 103,963
Loss before tax
2023
2024 Restated
£000 £000
Loss before tax per segmental information (38,625) (18,199)
Less: loss before tax from discontinued operations 5 (7,300) (6,500)
Consolidated loss before tax (45,925) (24,699)
Non-current assets by location of assets
2024 2023
£000 £000
Belgium 115,154 144,344
Norway - 74,541
UK 880 29,690
Iceland - 37,631
Rest of Europe 1,916 1,017
Rest of world 14,051 34,047
132,001 321,270
3. Net finance costs
2023
2024 Restated
£000 £000
Interest received on bank deposits 44 250
Foreign exchange gains on financing activities - 158
Foreign exchange gains on operating activities 3,739 3,593
Cash flow hedges - ineffective portion of changes in fair value - 2,176
Finance income 3,783 6,177
Leases interest (518) (1,009)
Cash flow hedges - ineffective portion of changes in fair value (243) -
Foreign exchange losses on operating activities (4,954) (4,547)
Amortisation of capitalised borrowing fees (967) (565)
Interest expense on financial liabilities measured at amortised cost (7,527) (7,220)
Finance costs (14,209) (13,342)
Net finance costs recognised in profit or loss (10,426) (7,165)
4. Exceptional items - restructuring, acquisition and disposal related
items
Items that are material because of their nature, non-recurring or 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.
2023
2024 Restated
£000 £000
Acquisition related items 158 652
Exceptional restructuring costs 5,682 872
Disposal related items (259) (218)
Costs associated with the Oslo listing - 2,598
Total exceptional items 5,581 3,904
Acquisition related items comprise fees incurred in both 2024 and 2023 in
connection with an aborted acquisition.
Exceptional restructuring costs include £4,447,000 (2023: £nil) relating to
the formal review of the Company's strategic options as announced earlier in
the year. The other exceptional restructuring costs of £1,235,000 (2023:
£872,000) relate to redundancies and dilapidations provisions arising from
restructuring Health, Nutrition and Corporate business areas.
Disposal related items relate to income from asset disposals from Health
businesses discontinued in earlier years.
In 2023, exceptional restructuring costs included £2,598,000 of legal and
professional costs in relation to preparing for listing the
Group on the Oslo stock exchange.
5. Discontinued operations
On 22 January 2024, the Board announced the decision to undertake a formal
review of the Group's strategic options including the exploration of a
potential sale of the Group as a whole or of one or more business units,
should any attractive offers be made by potential bidders. As at 30 September,
the Board assessed that a deal for the sale of the Genetics business area was
reaching an advanced stage and that a sale of the business area was highly
probable. The circumstances at the year end were such that the conditions
outlined within IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations for treatment as 'held for sale' and 'discontinued operations' were
met, and this has been reflected in the financial statements.
In the prior year, the Group divested its Tilapia business, which was also in
the Genetics business area, for consideration of USD 1 in a management buy
out. Consequently, these operations were already classified as discontinued in
the prior year.
Summary of restatement of FY23 results as reported in FY23 financial
statements
(Loss) / profit from discontinued operations
Loss from continuing operations £000
Adjusted EBITDA £000
Revenue £000
£000
As stated in financial year 2023 financial statements 169,476 35,492 (16,059) (5,505)
Reclassified in financial year 2024 (65,513) (18,511) (7,417) 7,417
As stated in financial year 2024 financial statements 103,963 16,981 (23,476) 1,912
2023*
2024* Restated
£000 £000
Revenue 57,361 65,781
Cost of sales (30,931) (35,820)
Gross profit 26,430 29,961
Research and development costs (3,276) (3,778)
Other operating costs (7,744) (8,894)
Share of loss of equity-accounted investees, net of tax 1,288 (32)
Adjusted EBITDA 16,698 17,257
Exceptional loss on disposal (1,800) (3,913)
EBITDA 14,898 13,344
Depreciation and impairment (5,371) (4,703)
Amortisation and impairment (1,638) (1,894)
Operating profit / Profit before taxation 7,889 6,747
Net finance costs (589) (247)
Profit before taxation 7,300 6,500
Tax on profit (2,141) (4,588)
Profit from discontinued operations 5,159 1,912
* While all of the discontinued operations relate to the entire Genetics
business area, the results above exclude £1.9m of intercompany recharges
included within the Genetics segment in Note 2, which are eliminated within
continuing activities.
Exceptional items within discontinued operations
2023
2024 Restated
£000 £000
Exceptional restructuring costs 965 -
Other costs 835 -
Loss on disposal of trade and assets - 3,774
Other costs relating to disposals - 139
Total exceptional loss on disposal 1,800 3,913
Exceptional costs included in discontinued operations relating to Genetics
include certain costs following the closure of the tilapia operations in FY23
(£0.4m), restructuring costs in relation to the shrimp genetics operations
(£0.5m) and costs incurred in relation to uninsured culling of broodstock and
clean-up costs after two separate isolated ISA incidents (£0.8m).
Cash flows from discontinued operations
2023
2024 Restated
£000 £000
Net cash flow from operating activities 4,489 11,648
Net cash flow from investing activities (1,776) (11,416)
Net cash flow from financing activities (5,838) (2,401)
Net cash flow from discontinued operations (3,125) (2,169)
Results from discontinued operations by segment
The results from discontinued operations relate solely to the Genetics
operating segment.
Impact on the Group Consolidated Income Statement for the year ended 30
September 2024
2024 2024 2024
Continuing Discontinued Total
£000 £000 £000
Revenue 90,365 57,361 147,726
Cost of sales (46,418) (30,931) (77,349)
Gross profit 43,947 26,430 70,377
Research and development costs (2,443) (3,276) (5,719)
Other operating costs (29,582) (7,744) (37,326)
Share of profit of equity-accounted investees, net of tax - 1,288 1,288
Adjusted EBITDA 11,922 16,698 28,620
Exceptional - restructuring/acquisition related items (5,581) (1,800) (7,381)
EBITDA 6,341 14,898 21,239
Depreciation and impairment (10,949) (5,371) (16,320)
Amortisation and impairment (30,891) (1,638) (32,529)
Operating (loss)/profit (35,499) 7,889 (27,610)
Net finance costs (10,426) (589) (11,015)
(Loss)/profit before taxation (45,925) 7,300 (38,625)
Tax on loss 1,646 (2,141) (495)
(Loss)/profit after tax for the financial period (44,279) 5,159 (39,120)
Impact on the Group Consolidated Income Statement for the year ended 30
September 2023
2023 2023 2023
Continuing Discontinued Total
£000 £000 £000
Revenue 103,963 65,781 169,744
Cost of sales (47,879) (35,820) (83,699)
Gross profit 56,084 29,961 86,045
Research and development costs (2,350) (3,778) (6,128)
Other operating costs (36,753) (8,894) (45,647)
Share of profit of equity-accounted investees, net of tax - (32) (32)
Adjusted EBITDA 16,981 17,257 34,238
Exceptional - restructuring/acquisition related items (3,904) (3,913) (7,817)
EBITDA 13,077 13,344 26,421
Depreciation and impairment (14,010) (4,703) (18,713)
Amortisation and impairment (16,601) (1,894) (18,495)
Operating (loss)/profit (17,534) 6,747 (10,787)
Net finance costs (7,165) (247) (7,412)
(Loss)/profit before taxation (24,699) 6,500 (18,199)
Tax on loss 1,223 (4,588) (3,365)
(Loss)/profit after tax for the financial period (23,476) 1,912 (21,564)
Effects of business disposals on the financial position of the Group
On 30 September, the tilapia businesses of a Group's subsidiary was disposed
of for consideration of USD 1. The assets sold are
highlighted in the table below.
Tilapia
£000
Assets
Property, plant and equipment (including Right of use assets) 738
Intangible assets 3,036
Net assets and liabilities 3,774
Total consideration -
Consideration received in cash -
Cash and cash equivalents disposed of -
Net cash inflow/(outflow) -
6. Loss per share
Basic 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.
2024 2023
Continuing Discontinued Total Continuing Discontinued Total
Loss attributable to equity holders of the parent (£000) (44,279) 4,815 (39,464) (23,476) 330 (23,145)
Weighted average number of shares in issue (thousands) 739,575 731,935
Basic loss per share (pence) (5.99) 0.65 (5.34) (3.21) 0.05 (3.16)
Diluted 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. However, as
any potential ordinary shares would be anti-dilutive due to losses being made
there is no difference between Basic loss per share and Diluted loss per share
for any of the periods being reported.
A total of 13,656,055 (2023: 8,948,132) potential ordinary shares have not
been included within the calculation of statutory diluted loss per share for
the year as they are anti-dilutive and reduce the loss per share. However,
these potential ordinary shares could dilute earnings per share in the future.
The diluted and basic loss per share are the same for both continuing and
discontinued.
7. Property, plant and equipment
Group
Freehold Land and Buildings Assets in the course of construction Long-Term Leasehold Property Plant and Machinery Office Equipment and Fixtures Total
£000 £000 Improvements £000 £000 £000
£000
Cost
Balance at 1 October 2022 69,003 2,264 7,136 39,166 3,138 120,707
Additions 2,164 560 28 2,662 539 5,953
On acquisition - - - 315 - 315
Reclassification 56 (106) - 50 - -
Increase/(decrease) through transfers from assets in the course of 877 (1,556) - 679 - -
construction
Exchange differences (4,446) (53) (344) (1,670) (328) (6,841)
Transfer to assets held for resale (1,392) - - - - (1,392)
Transfer to inventory - - - 94 - 94
Disposals (81) - (1,575) (2,121) (58) (3,835)
Balance at 1 October 2023 66,181 1,109 5,245 39,175 3,291 115,001
Additions 1,291 546 - 2,256 249 4,342
Increase/(decrease) through transfers from assets in the course of 632 (842) - 231 (21) -
construction
Exchange differences (4,845) (50) (179) (1,147) (203) (6,424)
Transfer to assets held for resale (55,947) (522) (1,964) (11,657) (2,258) (72,348)
Disposals (40) - (3,102) (9,803) (263) (13,208)
Balance at 30 September 2024 7,272 241 - 19,055 795 27,363
Accumulated Depreciation
Balance at 1 October 2022 10,924 - 5,176 21,315 1,392 38,807
Depreciation charge for the year 2,266 - 79 5,513 595 8,453
Transfer to assets held for resale (542) - - - - (542)
Exchange differences (908) - (189) (810) (214) (2,121)
Disposals (81) - (1,575) (1,323) (28) (3,007)
Balance at 1 October 2023 11,659 - 3,491 24,695 1,745 41,590
Depreciation charge for the year 2,122 - 138 4,194 422 6,876
Impairment charge for the year - - - 1,893 - 1,893
Transfer to assets held for resale (10,150) - (470) (6,097) (1,536) (18,253)
Exchange differences (993) - (36) (586) (124) (1,739)
Disposals - - (3,123) (9,707) (281) (13,111)
Balance at 30 September 2024 2,638 - - 14,392 226 17,256
Net book value
At 30 September 2024 4,634 241 - 4,663 569 10,107
At 30 September 2023 54,522 1,109 1,754 14,480 1,546 73,411
At 1 October 2022 58,079 2,264 1,960 17,851 1,746 81,900
During the year, the business made the decision to pause operations on the
Health business area's new sea lice treatment (Ectosan® Vet/ CleanTreat®)
until a more suitable deployment platform can be found. As a result, the
capitalised plant and machinery costs relating to Ectosan® Vet/ CleanTreat®
of £1,893,000 were impaired to nil.
Reconciliation of depreciation and impairment to income statement
2024 2023
Note £000 £000
Depreciation on property, plant and equipment (6,876) (8,453)
Impairment of property, plant and equipment (1,893) -
Impairment of assets held for sale (550) -
Depreciation on continuing right of use assets 8 (5,221) (9,221)
Depreciation on discontinued right of use assets 8 (1,767) (1,039)
Impairment on continuing right of use assets 8 (13) -
Total per cash flow (16,320) (18,713)
Less: depreciation and impairment on discontinued 5 5,371 4,703
Total depreciation and impairment per income statement (10,949) (14,010)
8. Leases
Group
2024 2023
Right-of-use assets £000 £000
Leasehold property 8,996 9,213
Plant and machinery 2,896 10,585
Office equipment and fixtures 3 6
Transferred to held for sale (7,843) -
4,052 19,804
2024 2023
Lease liabilities £000 £000
Current 4,223 11,567
Non-current 6,657 8,293
Transferred to held for sale (7,254) -
3,626 19,860
Depreciation charge on right-of-use assets 2024 2023
£000 £000
Leasehold property 2,235 1,210
Plant and machinery 4,750 9,038
Office equipment and fixtures 3 12
6,988 10,260
Included within the depreciation charge above is £1,767,000 (2023:
£1,009,000) of charge relating to assets that were transferred to held for
sale.
Additional information 2024 2023
£000 £000
Additions to right-of-use assets 2,141 2,120
Modifications to right-of-use assets (4,781) 1,697
Impairment of leasehold property right-of-use asset (13) -
Interest expense continuing 518 1,654
Interest expense discontinuing 803 -
Expense relating to short-term leases 212 237
Expense relating to low-value leases 25 20
Total cash outflow for leases 8,121 9,438
Within the year, the two largest leases, the FS Aquarius vessel and the FS
Pegasus vessel, both within Benchmark Animal Health Limited, came to an end.
9. Intangible assets
Group
Websites Goodwill Patents and Trademarks Intellectual Property Customer Contracts Licences Genetics Development Total
Lists costs
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Cost or valuation
Balance at 1 October 2022 447 164,674 452 160,407 6,378 6,575 40,320 23,235 31,222 433,710
Additions - externally acquired 80 1 115 - - - - - - 196
Additions - internally developed - - - - - - - - 632 632
Disposals - (3,036) (21) - - - (150) - - (3,207)
Reclassification to assets held for resale - - - - - - - - - -
Exchange differences (15) (13,682) (1) (13,737) (559) (70) (3,186) (1,267) (982) (33,499)
Balance at 1 October 2023 512 147,957 545 146,670 5,819 6,505 36,984 21,968 30,872 397,832
Additions - externally acquired 149 - 104 15 - - - - - 268
Additions - internally developed - - - - - - - - 149 149
Disposals - (889) - - - (1,565) (2,425) (327) - (5,206)
Increase through transfers from PPE 74 - - - - - - - - 74
Reclassification to assets held for resale (692) (20,824) (599) (2,531) - (4,868) (2,447) (19,924) (5,900) (57,785)
Exchange differences (43) (12,929) (4) (12,772) (520) (72) (2,982) (1,717) (925) (31,964)
Balance at 30 September 2024 - 113,315 46 131,382 5,299 - 29,130 - 24,196 303,368
Accumulated amortization and impairment
Balance at 1 October 2022 143 49,950 206 104,386 1,656 6,293 16,943 4,886 3,983 188,446
Amortisation charge for the period 85 - 91 12,605 222 94 1,818 606 2,437 17,958
Impairment - 1 - 61 - - 476 - - 538
Disposals - - (21) - - - (150) - - (171)
Exchange differences (4) (4,484) (2) (8,868) (143) (52) (1,177) (253) (33) (15,016)
Balance at 1 October 2023 224 45,467 274 108,184 1,735 6,335 17,910 5,239 6,387 191,755
Amortisation charge for the period 119 - 112 11,701 215 89 1,489 581 2,889 17,195
Impairment 30 - - - - - - - 15,304 15,334
Disposals - (889) - 2 - (1,565) (2,425) (297) - (5,174)
Increase through transfers from PPE 23 - - - - - - - - 23
Reclassification to assets held for resale (375) (1) (360) (477) - (4,796) (2,405) (5,087) (1,524) (15,025)
Exchange differences (21) (4,035) (2) (10,043) (166) (63) (1,351) (436) (150) (16,267)
Balance at 30 September 2024 - 40,542 24 109,367 1,784 - 13,218 - 22,906 187,841
Net book value
At 30 September 2024 - 72,773 22 22,015 3,515 - 15,912 - 1,290 115,527
At 30 September 2023 288 102,490 271 38,486 4,084 170 19,074 16,729 24,485 206,077
At 1 October 2022 304 114,724 246 56,021 4,722 282 23,377 18,349 27,239 245,264
During the year, the business made the decision to pause operations on the
Health business area's new sea lice treatment (Ectosan® Vet/ CleanTreat®)
until a more suitable deployment platform can be found. As a result, the
capitalised development costs relating to Ectosan® Vet/ CleanTreat® of
£13,305,000 were impaired to nil.
Due to a lack of cohesive results, the Nutrition business area ceased
development on an Artemia replacement for shrimp, resulting in capitalised
costs of £1,999,000 being impaired to nil.
The table below provides further detail of intangibles and their remaining
amortisation period.
Description Category NBV 2024 NBV 2024 Remaining life
£000 £000 2024
Acquisition of INVE in 2015
Goodwill Goodwill 72,773 79,909 -
Harvesting rights Licences 15,914 19,029 11
Product technology Intellectual property - -
Product rights Intellectual property 12,590 24,880 1
Brand names Intellectual property 9,154 10,945 11
In-process R&D Intellectual property 271 535 1
Customer relationships Customer lists 3,515 4,085 17
Total relating to acquisition of INVE 114,217 139,383
Acquisition of Salmobreed AS (Now part of Benchmark Genetics Norway AS) in
2014*
Goodwill Goodwill - 6,063 -
Genetic material and breeding nuclei Genetics - 8,926 -
Total relating to acquisition of Salmobreed AS - 14,989
Acquisition of Stofnfiskur (Now Benchmark Genetics Iceland) in 2014*
Goodwill Goodwill - 11,999 -
Genetic material and breeding nuclei Genetics - 7,598 -
Total relating to acquisition of Stofnfiskur - 19,597
Acquisition of Akvaforsk Genetics Center AS
(Now part of Benchmark Genetics Norway AS) in 2015*
Goodwill Goodwill - 4,520 -
Licences Licences - - -
Contracts Contracts - 170 -
Total relating to acquisition of Akvaforsk Genetics Center AS - 4,690
Capitalised development costs
Ectosan®Vet/CleanTreat® Development costs - 14,048 -
Live food alternative diets Development costs 1,085 3,879 3
SPR Shrimp* Development costs - 5,453 -
Total capitalised development costs 1,085 23,380
Other purchased material intangible assets* Intellectual Property - 1,408
Total relating to other purchased intangible assets* - 1,408
Other individually immaterial goodwill and intangibles* 225 2,630
Total net book value at 30 September 115,527 206,077
* These assets were transferred to assets held for sale following the decision
to sell the Genetics business area.
Reconciliation of amortisation and impairment to income statement
2024 2023
£000 £000
Amortisation per intangibles note (17,195) (17,957)
Impairment per intangibles note (15,334) (538)
Total per cash flow (32,529) (18,495)
Less: amortisation and impairment on discontinued 5 1,638 1,894
Total amortisation and impairment per income statement (30,891) (16,601)
10. Impairment testing of goodwill and other intangible assets
The Group tests goodwill and other intangibles not yet ready for use annually
for impairment, or more frequently if there are indications that goodwill or
the other intangible assets might be impaired. Goodwill acquired in a business
combination is allocated, at acquisition, to the cash generating units (CGUs)
that are expected to benefit from the business combination. The only
intangible assets not yet ready for use are generally the capitalised
development costs on internally developed products. The development costs
included in the table below represents only those that are not yet ready for
use.
Due to the interdependence of the operations within each of the business areas
and the way in which they are managed, management have determined the CGUs are
the business areas themselves - Health, Genetics and Advanced Nutrition. These
are the smallest groups of assets that independently generate cashflows and
whose cashflows are largely independent of those generated by other assets.
Goodwill and capitalised development costs arise across the Group, and are
allocated specifically against the CGUs as follows:
Advanced Nutrition
Health 2024 Total 2024
2024 £000 £000
£000
INVE Aquaculture Group - Goodwill - 72,773 72,773
Development costs 206 - 206
The above table is after the transfer of £23,127,000 of Goodwill within the
Genetics business area into Assets Held for Sale (see Note 13).
Genetics 2023 Health Advanced Nutrition 2023 Total
£000 2023 £000 2023
£000 £000
Benchmark Genetics AS 6,062 - - 6,062
Benchmark Genetics Iceland HF (Previously Stofnfiskur HF) 11,999 - - 11,999
Akvaforsk Genetic Center* 4,520 - - 4,520
INVE Aquaculture Group - - 79,909 79,909
Goodwill 22,581 - 79,909 102,490
Development costs - 206 3,879 4,085
* Includes goodwill arising from the joint acquisition of Akvaforsk Genetics
Center AS (which was transferred into Benchmark Genetics Norway AS) and
Benchmark Genetics USA Inc (formerly Akvaforsk Genetics Center Inc).
The impairment calculations used Board approved cash flow projections from
four-year business plans based on actual operating results and current
forecasts as a base, including any costs in relation to the Group's climate
change strategy and climate change factors which have been considered when
setting the long-term growth rates. The pre-tax cash flows that these
projections produced were discounted at pre-tax discount rates based on the
Group's beta adjusted cost of capital, further adjusted to reflect
management's assessment of specific risks related to the markets and other
factors pertaining to each CGU. Specific assumptions used are as follows:
Advanced Nutrition
In assessing whether the Advanced Nutrition CGU is impaired, the carrying
value of the Advanced Nutrition CGU was compared to its recoverable amount,
being the higher of its value in use and its fair value less cost to sell, in
accordance with IAS36. Before testing was performed, an impairment charge of
£2.0m was made to capitalised development costs for products no longer
expected to be commercialised in the short term.
Historically a value in use calculation has been used to determine the
recoverable amount for the Advanced Nutrition CGU, however given the Strategic
Review undertaken during the year and which concluded after the year end,
consideration has been given to changes to the corporate cost base arising
from restructuring activities that would occur following the highly probable
sale of the Genetics CGU, consistent with a market participant's view, and the
subsequent reduction in the amount of corporate costs that would be allocated
to the Advanced Nutrition CGU.
Under IAS 36, the estimates of future cash flows in the value in use
calculation should not include cashflows that are expected to arise from a
future restructuring exercise, or from improvement or enhancement of the
assets, to which an entity is not yet
committed at the balance sheet date. Given the Genetics CGU was classified as
held for sale as at the balance sheet date, and that it was announced that a
sale has been agreed for this CGU on 25 November 2024, the value in use
calculation for the Advanced Nutrition CGU included an increased allocation of
the existing corporate cost base.
Management have therefore assessed the recoverability of the Advanced
Nutrition CGU using the alternative fair value less cost to sell methodology.
The fair value less cost to sell methodology considers the valuation from a
'market participant' perspective. Deriving a market participant valuation can
either be determined through a multiple of earnings methodology or through
using a discounted cash flow model from the perspective of a market
participant i.e. a buyer transacting in the principal market for an asset of
this type. Management have chosen to use the discounted cash flow methodology.
Management have used the approved 2024 four-year Business Plan, which includes
any costs in relation to the Group's climate change strategy and climate
change factors considered when setting the long-term growth rates, as the base
of the discounted cash flows in the fair value less cost to sell model and
have then considered their assumptions in the context of information that
would be available to a market participant. The key assumptions in the
impairment assessment are:
Expected revenue growth:
Forecast revenue growth is based on the approved four-year Board business
plan, which was adjusted to reflect a market participant view over five years
to create a five-year plan for FY25-29. The key assumptions underlying this
plan include the economic impact of the current market view of growth rates
across the three segments (Artemia, Diets and Health) based on market analysis
reports as well as revenue growth from commercial initiatives designed to grow
market share in the Diets and Health segments. In the
fair value less cost to sell model, an overlay has been applied to the
business plan to remove the growth associated with planned initiatives to grow
market share in the Diets and Health segments to reflect both the risk
associated with achieving this growth and reflecting that a market
participants view would be aligned with the current market view of growth
rates across the three segments. CAGR of revenue of 7.5% is implied in the
fair value less cost to sell model. In the prior year, the revenue growth
assumption used in the value in use model was aligned to the Board approved
business plan, and the CAGR implied in this model was 12%.
Discount rates:
The discount rate is based on the Advanced Nutrition CGU specific pre tax
discount rate of 16.1% (2023: 16.4%). As the post-tax WACC was produced from
the capital asset pricing model (CAPM), this was applied to post-tax cash
flows. The pre-tax WACC was then determined separately from the post-tax WACC
by removing the impact of the tax charge from the cash flows.
Long term growth rate:
A long-term growth rate of 3.5% (2023:3.5%) has been used for cash flows
subsequent to the five-year plan period into perpetuity. This long-term growth
rate represents a consistent approach for the CGU as in both periods this
assumption has been considered by reference to the long term growth rates
predicted in market analysis reports, which are c.7.5% (2023: c.5.0%) and are
therefore considered to reflect the view that a market participant would take.
Recoverable amount:
In accordance with IAS 36, the recoverable amount is the higher of value in
use and fair value less cost to sell. The fair value less cost to sell
methodology resulted in calculated headroom of £18.4m.
Sensitivity to change in assumptions:
Sensitivity analysis has been performed on the key assumptions. The forecast
growth rates inherently include assumptions around the ongoing recovery in
global shrimp markets, and if that recovery is slower or lower than expected,
due to factors such as continued reduced end market demand for shrimp, to the
extent that the CAGR of revenue implied over the five-year plan falls to 6.3%,
an impairment charge would be likely. Sensitivity to the discount rate was
also assessed and should the pre-tax discount rate increase to 17.4%, an
impairment charge would be likely. The sensitivity to a combination of a
movement in forecast growth rates, discount rate and long-term growth rate was
also assessed. A severe but plausible downside sensitivity was modelled to
include a reduction in the CAGR of revenue implied over the five year plan to
6.13%, a long term growth rate of 3.0% and an increased pre-tax discount rate
of 17.0%, and under this scenario, an impairment of £15.0m would be required.
In 2023 a value in use model was prepared using the pre-tax cashflows from
five-year projections which were discounted using a pre-tax discount rate of
16.4%. CAGR of revenue of 12% was implied by the five-year plan and a
long-term growth rate of 3.5% was used to extrapolate the terminal year
cashflow into perpetuity.
Health
During the year, the business made the decision to pause operations on the
business area's new sea lice treatment (Ectosan® Vet/ CleanTreat®) until a
more commercially sensible deployment model could be adopted. A prudent
assumption was used in the forecast to exclude any future Ectosan®
Vet/CleanTreat® operations from the business plan and continue to trade
primarily using the business area's existing and well-established sea lice
treatment (Salmosan® Vet). As a result, capitalised development costs
relating to Ectosan® Vet/CleanTreat® of £13.3m were impaired to nil.
In 2023 a value in use model was prepared using the pre-tax cash flows from
five-year projections which were discounted using a pre-tax discount rate of
17.4%. Revenue CAGR of 23% was implied by the five-year plan and a long-term
growth rate of 0.0% was used to extrapolate the terminal year cash flow into
perpetuity.
Genetics
Management have considered the recoverable amount of the Genetics CGU under a
fair value less cost to sell methodology. This reflects the ongoing Strategic
Review process and the subsequent disposal of the Genetics CGU to Novo
Holdings for consideration of £260.0m (see note 13), which indicates adequate
headroom.
In 2023, a value in use model was preparing using the pre-tax cash flows from
five-year projections which were discounted using a pre-tax discount rate of
15.7%. CAGR of revenue of 9% was implied by the five-year plan and a long-term
growth rate of 2.5% was used to extrapolate the terminal year cash flow into
perpetuity.
11. Biological assets
Book value of biological assets recognised at fair value
2024 2023
Group £000 £000
Salmon eggs - 10,631
Salmon broodstock - 33,411
Salmon milt - 796
Lumpfish fingerlings - 757
Shrimp - 397
Total biological assets 30 September - 45,992
Analysed as
Current - 27,586
Non-current - 18,406
Total biological assets 30 September - 45,992
Change in book value of biological assets
2024 2023
£000 £000
Biological assets 1 October Increase from production 45,992 46,658
Reduction due to sales 40,369 42,393
(39,421) (40,583)
Other movements in biological assets 948 1,810
Foreign exchange movement before fair value adjustment (2,436) (1,562)
Change in fair value through income statement (237) (103)
Foreign exchange impact on fair value adjustment (1,160) (811)
Transfer to assets held for sale (43,107) -
Biological assets 30 September - 45,992
Assumptions used for determining fair value of biological assets
IAS 41 requires that biological assets are accounted for at the estimated fair
value net of selling and harvesting costs. Fair value is measured in
accordance with IFRS 13 and is categorised into levels in the fair value
hierarchy.
The fair value inputs for salmon eggs are categorised as level 2. The
calculation of the fair value of the salmon eggs is based upon the current
seasonally adjusted selling prices for salmon eggs less transport and
incubation costs and taking account of the market capacity. The valuation also
takes account of the mortality rates of the eggs and expected life as sourced
from internally generated data.
The fair value inputs for salmon broodstock are categorised as level 3. The
broodstock contain generations of genetic improvements and cannot be valued
purely on the market weight of salmon. The Group does not sell its broodstock
commercially so there is no observable input in this respect. Therefore, the
calculation of the estimated fair value of salmon broodstock is primarily
based upon its main harvest output being salmon eggs, which are priced upon
the current seasonally adjusted selling prices for the Group's salmon eggs.
These prices are reduced for harvesting costs, freight costs, incubation costs
and market capacity to arrive at the net value of broodstock. The valuation
also reflects the internally generated data to arrive at the biomass. This
includes the weight of the broodstock, the yield that each kilogram of fish
will produce and mortality rates. The fish take four years to reach maturity,
and the age and biomass of the fish is taken into account in the fair value.
Finally, the valuation takes account of future expected sales volumes.
Change in book value of salmon broodstock
2024 2023
£000 £000
Biological assets 1 October 33,411 30,501
Increase from production 26,782 25,494
Transfer to salmon eggs following harvesting (25,224) (22,677)
Foreign exchange movement before fair value adjustment (1,822) (1,199)
Change in fair value through income statement 215 1,853
Foreign exchange impact on fair value adjustment (784) (561)
Transferred to assets held for sale (32,576) -
Biological assets 30 September - 33,411
Significant unobservable inputs used in the valuation of salmon broodstock
2024 2023
Number of eggs valued in broodstock (m units) 251 250
Average selling price per egg (GBP) 0.123 0.131
Future costs per egg (GBP) (0.014) (0.016)
The fair value inputs for lumpfish fingerlings and shrimp are categorised as
level 2. The calculation of the fair value of lumpfish fingerlings and shrimp
is valued on current selling prices less transport costs. Internally generated
data is used to incorporate mortality rates and the weight of the biomass.
The fair value inputs for salmon milt are categorised as level 3. Where we
have identified individual salmon carrying particular traits or disease
resistance, semen (milt) can be extracted and deep-frozen using
cryopreservation techniques (the process of freezing biological material at
extreme temperatures in liquid nitrogen). The calculation of the fair value of
milt is based on production and freezing costs and, where appropriate, an
uplift to recognise the additional selling price that can be achieved from
eggs fertilised by premium quality milt.
There is a presumption that fair value can be measured reliably for a
biological asset. However, we sometimes face a situation where alternative
estimates of fair value are determined to be clearly unreliable (for example,
where we establish a new broodstock farm
in a new territory). In such a case, that biological asset shall be measured
at its cost less any accumulated impairment losses. In the year, this applied
to £3,322,000 of broodstock in Chile. As at 30 September, the gross carrying
amount was £5,532,000 (2023: £5,074,000) and the accumulated impairment
losses were £2,210,000 (2023: £3,036,000).
The valuation models by their nature are based upon uncertain assumptions on
sales prices, market capacity, weight, mortality rates, yields and assessment
of the discounts to reflect the stages of maturity. The Group has a degree of
expertise in these assumptions but these assumptions are subject to change.
Relatively small changes in assumptions would have a significant impact on the
valuation. A 1% increase/decrease in the assumed selling price per egg would
increase/decrease the fair value of salmon broodstock and eggs by £416,000. A
10% increase/decrease in the biomass of salmon broodstock and the quantity of
salmon eggs valued would increase/decrease the fair value of those biological
assets by £4,159,000.
The Group is exposed to financial risks arising from changes in the market
value of the salmon eggs, lumpfish fingerlings and shrimp broodstock that it
sells. The Group does not anticipate that prices will decline significantly in
the foreseeable future and, therefore, has not entered into derivative or
other contracts to manage the risk of a decline in the price of its products.
The Group reviews its outlook for salmon eggs, lumpfish fingerlings and shrimp
broodstock prices regularly in considering the need for active financial risk
management.
Risk management strategy related to aquaculture activity
The Group is exposed to the following risks relating to its aquaculture
activities. These risks and management's strategies to mitigate them are
described below:
Regulatory and environmental risks
The nature of certain of the Group's operating activities exposes us to
certain significant risks to the environment, such as incidents associated
with releases of chemicals or hazardous substances when conducting our
operations, which could result in liability, fines, risk to our product
permissions and reputational damage. There is a risk that natural disasters
could lead to damage to infrastructure, loss of resources, products or
containment of hazardous substances. Our business activities could be
disrupted if we do not respond, or are perceived not to respond, in an
appropriate manner to any major crisis or if we are not able to restore or
replace critical operational capacity.
In mitigation, we have implemented standards and requirements which govern key
risk management activities such as inspection, maintenance, testing, business
continuity and crisis response.
Biological risks
The Group is exposed to the risk of disease within the Group's own operations
and disease in the market resulting in possible border closures. In
mitigation, the Group:
• Operates the highest levels of biosecurity.
• Holds genetic stock at multiple sites and increasingly sources from
its own land-based salmon breeding facilities.
• Operates containment zones which mitigates the risk of border
closures affecting its ability to import or export.
• Has placed increased focus on insuring its biological stock.
Outputs and quantities held
Total output of aquaculture activity in the year was:
2024 2023
Salmon eggs 286.1m units 334.7m units
Lumpfish fingerlings 0.9m units 1.5m units
Total quantities held at 30 September before being transferred to held for
sale were:
2024 2023
Salmon eggs Salmon broodstock 78.9m units 1,366 tonnes 85.6m units 1,517 tonnes
Lumpfish fingerlings 0.3m units 0.4m units
12. Trade and other receivables
2024 2023
Group £000 £000
Trade receivables 20,628 27,460
Less: provision for impairment of trade receivables (2,237) (2,612)
Trade receivables - net 18,391 24,848
Total financial assets other than cash and cash equivalents measured at 18,391 24,848
amortised cost
Prepayments 16,115 18,081
Other receivables 8,033 16,866
Total trade and other receivables 42,539 59,795
Other receivables relate to the following items: VAT recoverable £1,230,000
(2023: £4,353,000), research and development expenditure tax credits and
similar items £nil (2023: £157,000), the right to receive an agreed
proportion of a key supplier's harvest*
£6,196,000 (2023: £10,173,000), accrued income of £53,000 (2023:
£1,177,000) and other amounts receivable of £554,000 (2023: £1,006,000).
*A financial liability of £6,196,000 (2023: £10,173,000) is recognised
(within trade payables) for the amount invoiced and remaining outstanding at
the year end in relation to the Group's contractual obligation to pay for a
specified share of the harvest of a supplier, regardless of delivery and
without recourse to the supplier. As at 30 September, as the Group has not
taken physical delivery
of the harvested product and as the Group does not control the harvested
product, an 'other receivable' of £6,196,000 (2023:
£10,173,000) has been recorded in relation to the Group's right to receive
the product in the future.
The fair values of trade and other receivables measured at amortised cost are
not materially different to their carrying values. As at 30 September 2024,
trade receivables of £4,989,000 (2023: £6,313,000) were past due but not
impaired. They relate to customers with no default history. The ageing
analysis of these receivables is as follows:
2024 2023
£000 £000
Up to 3 months overdue 4,062 5,480
3 to 6 months overdue 857 833
6 to 12 months overdue 70 -
4,989 6,313
Movements on the Group provision for impairment of trade receivables are as
follows:
2024 2023
£000 £000
At 1 October 2,612 2,748
Provided during the year 704 696
Unused provisions reversed (482) (600)
Provisions used during the year (223) (32)
Foreign exchange movements (233) (200)
Transferred to assets held for sale (141) -
At 30 September 2,237 2,612
The movement on the provision for impaired receivables has been included in
the operating costs line in the Consolidated Income Statement.
Other classes of financial assets included within trade and other receivables
do not contain impaired assets.
13. Assets and liabilities held for sale
On 22 January 2024, the Board announced the decision to undertake a formal
review of the Group's strategic options including the exploration of a
potential sale of the Group as a whole or of one or more business units,
should any attractive offers be made by potential bidders. As at 30 September,
the Board assessed that a deal for the sale of the Genetics business area, on
terms to which they were committed, was reaching an advanced stage and their
commitment to the sale was such that a sale was highly probable. The
circumstances at the year end were such that the conditions outlined within
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for
treatment as 'held for sale' and 'discontinued operations' were met, and this
has been reflected in the financial statements.
In 2023, management committed to sell certain property, plant and equipment
with a market value of £850,000 which was held within the Health business
area. The property concerned was no longer required by the business, and so
the decision was made to sell. The property was sold during the year for
£300,000 after a further impairment charge in the year of £550,000.
Assets held for sale
Transferred to held for sale Fair Value Adjustment Total assets transferred Transferred to held for sale Fair Value Adjustment Total assets transferred
2024 2024 2024 2023 2023 2023
£000 £000 £000 £000 £000 £000
Property, plant and equipment 54,095 - 54,095 850 - 850
Right-of-use assets 7,843 - 7,843 - - -
Intangible assets 42,760 - 42,760 - - -
Equity-accounted investees 2,304 - 2,304 - - -
Biological and agricultural assets 43,107 - 43,107 - - -
Inventories 502 - 502 - - -
Trade and other receivables 12,641 - 12,641 - - -
Total Assets held for sale 163,252 - 163,252 850 - 850
Liabilities directly associated with the assets held for sale
2024 2023
£000 £000
Trade and other payables (11,754) -
Loans and borrowings (22,314) -
Corporation tax liability (3,147) -
Provisions (568) -
Deferred tax liability (8,914) -
Total liabilities directly associated with the assets held for sale (46,697) -
14. Trade and other payables
2024 2023
Group £000 £000
Trade payables 15,021 26,657
Other payables 2,037 2,213
Accruals 5,933 16,257
Other payables - tax and social security payments 1,870 2,957
Financial liabilities, excluding loans and borrowings,
classified as financial liabilities measured at amortised cost 24,861 48,084
Financial contracts - hedging instrument 6,779 5,683
Financial liabilities, excluding loans and borrowings,
classified as financial liabilities at fair value through profit or loss 6,779 5,683
Deferred income 69 404
Total trade and other payables 31,709 54,171
Less: non-current portion of other payables (1,607) (6,842)
Current portion 30,102 47,329
Book values approximate to fair value at 30 September 2024 and 2023.
Of the financial contracts, £6,779,000 (2023: £6,155,000) relates to a
NOKUSD floating to fixed cross-currency interest rate swap ("CCS") and a NOK
interest rate swap ("IRS"), both of which were entered to fully match the
timing and tenure of the underlying new senior secured floating rate listed
bond issue of NOK 750m.
The floating-to-fixed NOK IRS (notional NOK 300m) is designated a cash flow
hedge where any changes in the fair value of the swap will be taken directly
to equity within the hedging reserve and recycled to profit or loss as the
bond impacts the profit or loss.
The NOKUSD CCS (notional NOK 450m) has been separated into two synthetic
swaps; the first is a floating-to-fixed NOKGBP interest rate swap, being a
cash flow hedge of the foreign exchange and interest rate risk on NOK
denominated debt. The fair value of this synthetic swap is posted to the
hedging reserve in equity. The second synthetic swap is a fixed-to-fixed
GBPUSD swap designated as a net investment hedge in the USD net assets in the
consolidated accounts of Benchmark Holdings plc. The fair value of this leg is
posted to the foreign exchange translation reserve in equity.
15. Loans and borrowings
Group
2024 2023
Group £000 £000
Non-current
2025 750m NOK Loan notes - 57,604
Bank borrowings - 16,799
Unamortised debt issue costs - (742)
Lease liabilities (Note 8) 2,837 8,293
2,837 81,954
Current
2025 750m NOK Loan notes 53,125 -
Bank borrowings 16,250 9,320
Unamortised debt issue costs (931) (842)
Lease liabilities (Note 8) 789 11,567
69,233 20,045
Total loans and borrowings 72,070 101,999
At 30 September 2024, the fair value of the unsecured floating rate listed
green bond of NOK 750m was NOK 767m (2023: NOK 791m).
The Group has a secured GBP 20.0m RCF provided by DNB Bank ASA, maturing on 27
June 2025. This facility was extended on the same terms in March 2024 by GBP
7.5m, to a total facility of GBP 27.5m, with the GBP 7.5m extension maturing
on 27 March 2025. The margin on this combined facility is a minimum of 2.5%
and a maximum of 3.25%, dependent upon the leverage of the Group above the
relevant risk-free reference or IBOR rates depending on which currency is
drawn.
The lease liabilities are secured on the assets to which they relate.
Following the decision to sell the Genetics business area, £22.3m of loans
and borrowings have been transferred into held for sale. Under the terms of
the deal agreed on 25 November 2024 for the sale of Genetics, these facilities
will be repaid from the sale proceeds.
The currency profile of the Company's loans and borrowings is as follows:
2024 2023
£000 £000
Sterling 15,674 16,680
Norwegian Krone 53,125 76,730
Thai Baht 1,399 464
Euro 568 614
US Dollar 871 6,460
Iceland Krona - 585
Other 433 466
72,070 101,999
16. Post balance sheet events
Disposal of Genetics business area
The strategic review announced in January 2024 was completed post year end and
on 25 November 2024, the Company announced that it had entered into a binding
agreement to sell its Genetics business area by way of the disposal of
Benchmark Genetics Limited and Benchmark Genetics Norway AS and their
respective subsidiaries to Starfish Bidco AS, a wholly owned subsidiary of
Novo Holdings A/S. The agreed deal includes initial consideration of £230.0m
receivable on completion and additional contingent consideration of up to
£30.0m receivable in three years' time based on trading performance of the
core salmon sub- segment in the period from 1 October 2024 to 30 September
2027. Completion of the deal is expected during the first quarter of 2025
subject to shareholder approval and receipt of customary regulatory
clearances. The proceeds will enable Benchmark to repay its NOK 750m green
bond and amounts drawn on its RCF, and to focus on its Advanced Nutrition and
Health business areas going forward.
At the year end, the Genetics business were treated as discontinued operations
(see note 5) and the assets and liabilities transferred into held for sale
(see note 13) as the sale at the year end was considered highly probable.
Included within liabilities held for sale is £22.3m of borrowings held within
Genetics. The terms of the agreed deal prescribe that these facilities will be
paid out of the proceeds received at completion.
Change in control of a significant customer
On 26 November 2024, Benchmark learned that the business and assets of one of
its significant customers based in Venezuela, Grupo Lamar, had been seized and
controlled by the government. As a result of this and due to US, UK and EU
sanction laws applicable against the Venezuelan government, it is not
currently possible for Benchmark to trade with Grupo Lamar, and for that
company to export its products to its largest market in Europe. The demand for
products in Europe is unaffected by the change in control of Grupo Lamar, so
it is expected that other suppliers in the industry will be able to supply
their own products to that market. Benchmark in turn is expected to be able to
switch its supply to those suppliers which will mitigate the impact of this
event.
This change in control has happened after the year end, and so in line with
the guidance of IAS 10 Events After the Reporting Period, this is a
non-adjusting post balance sheet event and no amendments have been made to the
year-end accounts as a consequence of this matter. The Directors have
considered this matter when forming their conclusion over the going concern
status of the Benchmark Group and this has not affected their conclusion that
it remains appropriate to prepare the financial statements on a going concern
basis.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR QLLBFZLLZFBKRecent news on Benchmark Holdings
See all newsREG - Benchmark Hlgs PLC - Total Voting Rights
AnnouncementREG - Benchmark Hlgs PLC - Update on Strategy and Return of Capital
AnnouncementREG - Benchmark Hlgs PLC - Completion of Bond Redemption
AnnouncementREG - Benchmark Hlgs PLC - Notice of exercise of call option, bond redemption
AnnouncementREG - Benchmark Hlgs PLC - Completion of Disposal of the Genetics Business
Announcement