REG - Benchmark Hlgs PLC - Q1 Results
22/02/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220222:nRSV3521Ca&default-theme=true
RNS Number : 3521C Benchmark Holdings PLC 22 February 2022
22 February 2022
Information within this announcement is deemed by the Company to constitute
inside information under the Market Abuse Regulations (EU) No. 596/2014.
Benchmark Holdings plc
("Benchmark", the "Company" or the "Group")
Q1 Results
(3 months ended 31 December 2021)
Excellent Q1 results with strong growth in revenues and Adjusted EBITDA
Building momentum following strong FY21 performance
In compliance with the terms of the Company's senior secured bond which
requires it to publish quarterly financial information, Benchmark, the
aquaculture biotechnology business, announces its unaudited results for the 3
months ended 31 December 2021 (the "period"). All Q1 FY22 and Q1 FY21 figures
quoted in this announcement are based on unaudited
accounts.
Highlights - Strong growth in revenues and Adjusted EBITDA; good performance
in all business areas
· Group revenues 38% ahead of the prior year (+38% CER) with good
growth in all three business areas:
o Advanced Nutrition - revenues 26% above Q1 FY21 (+28% CER) building upon
the strong FY21 performance
o Genetics - revenues 20% above Q1 FY21 (+18% CER) driven by higher harvest
income, as well as higher salmon egg revenues
o Health - revenues 347% above Q1 FY21 (+348% CER) reflecting sales of
Ectosan(â) Vet and CleanTreat(â) (launched in August 2021)
· Adjusted EBITDA of £7.4m, 145% ahead of Q1 FY22, with all business
areas EBITDA profitable
· Adjusted EBITDA margin increased from 10.4% to 18.6%
· Operating loss halved, however net loss increased due to negative
£4.9m non-cash movement in net finance costs (Q1 FY21 had benefitted from
£2.5m forex gain and £2.3m revaluation of hedging instrument associated with
NOK bond)
· Net debt reduced to £64.3m at 31 December 2021 (30 September 2021:
£80.9m) following equity raise in November 2021; Net debt excluding lease
liabilities £43.1m (30 September 2021: £56.9m)
· Cash of £50.6m and Liquidity (cash and available facility) of
£61.6m as at 21 February 2022
£m Q1 FY22 Q1 FY21 % AER % CER(**) FY21
(full year)
Revenue 40.0 29.0 +38% +38% 125.1
Adjusted
Adjusted EBITDA(1) 7.4 3.0 +145% +142% 19.4
Adj. EBITDA excluding fair value movement in biological asset 7.5 1.8 +329% +321% 16.1
Adjusted Operating Profit(2) 2.5 1.3 +97% +89% 10.8
Statutory
Operating loss (1.5) (3.3) (5.4)
Loss before tax (3.7) (0.5) (9.2)
Loss for the period (5.1) (0.2) (12.9)
Basic loss per share (p) (0.79) (0.11) (1.9)
Net debt(3) (64.3) (51.9) (80.9)
Net debt excluding lease liabilities (43.1) (40.4) (56.9)
** 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.
(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
Business Area Summary
£m Q1 FY22 Q1 FY21 % AER % CER(**) FY21
(full year)
Revenue
Advanced Nutrition 19.1 15.1 +26% +28% 70.5
Genetics 15.2 12.6 +20% +18% 46.8
Health 5.8 1.3 +347% +348% 7.8
Adjusted EBITDA(1)
Advanced Nutrition 4.3 1.0 +335% +337% 13.8
Genetics 3.3 3.9 -16% -19% 11.5
- Net of fair value movements in biological assets 3.4 2.6 +29% +23% 8.2
Health 0.5 (1.1) +149% +149% (2.7)
** 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
o Patrick Waty named new Head of Advanced Nutrition bringing extensive
commercial and industry expertise to business area
o Continued to strengthen our commercial footprint, enhancing our
distributor network and commercial team
o Obtained ISO 14001:2015 certification for main facility in Thailand
o Benchmark's Frippak China Aquatic Feed named "Favourite Brand"
· Genetics
o First deliveries of salmon eggs from new incubation centre in Iceland
showing excellent quality, enhancing our ability to serve all production
systems including land-based farming
o Good progress in the roll-out of SPR shrimp, winning new customers, import
licence to India obtained and gaining commercial traction
o Appointment of Professor Ross Houston, leading aquaculture genetics
scientist, as Director of Innovation, Genetics
· Health
o Both CleanTreat® systems in operation from last part of quarter onwards
and treatments showing excellent results in line with our expectations
o Order recently placed for third CleanTreat® system
o Collaboration with key customers on optimising future configuration
initiated
o Progress in trials to obtain extension of Marketing Authorisation for
Ectosan(â)Vet and CleanTreat(â) in Norway
o Ectosan(â)( )Vet patent grant approved providing 20-year protection
· One Benchmark integration - continued to integrate Group functions to
realise synergies, leverage capabilities and enhance customer proposition
· Sustainability - by working with our suppliers the soy beans used in
our feeds are sustainably certified
· Consideration of a listing in Oslo is ongoing
Current trading and outlook
· Following the good performance in Q1 we are trading in line with FY22
expectations
· Positive market environment across our core species
· Well positioned to reach sustainable profitability and deliver
growth, supported by leading market positions in all business areas, a focused
strategy and well embedded financial discipline
Trond Williksen, CEO commented
"Benchmark has delivered an excellent Q1 performance, reporting a 38% annual
growth in revenue and 145% increase in Adjusted EBITDA. This reflects an
excellent performance in Advanced Nutrition, continued good performance in
Genetics and the benefit of revenues from the recently launched Ectosan(â)
Vet and CleanTreat(â) in our Health business area.
"We are performing in line with market expectations for the full year, with
building momentum in our commercial, operating and financial performance in
all business areas. The positive market environment in our core species, our
leading market positions, together with our focused strategy and financial
discipline positions the Group well to reach profitability and deliver
growth."
Details of analyst / investor call today
There will be a call at 9:00am UK time today for analysts and investors. To
register for the call please contact MHP Communications on +44 (0)20 3128
8990 or by email on benchmark@mhpc.com (mailto:benchmark@mhpc.com)
Enquiries
For further information, please contact:
Benchmark Holdings plc Tel: 0114 240 9939
Trond Williksen, CEO
Septima Maguire, CFO
Ivonne Cantu, Investor Relations
Numis (Broker and NOMAD) Tel: 020 7260 1000
James Black, Freddie Barnfield, Duncan Monteith
MHP Communications Tel: 020 3128 8990
Katie Hunt, Reg Hoare, Charlie Protheroe
benchmark@mphc.com
(mailto:benchmark@mphc.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
Management Report
The Group delivered an excellent performance in the quarter reporting a 38%
growth in revenue and 145% growth in Adjusted EBITDA. These strong results
reflect an excellent performance in Advanced Nutrition, continued good
performance in Genetics and the benefit of early revenues from the recently
launched Ectosan(â) Vet and CleanTreat(â) in our Health business area. The
Group's performance is particularly pleasing in the context of the logistics
challenges and increased transportation costs affecting industries worldwide.
Conditions in our core markets have improved and are positive with a solid,
growing salmon sector, recovery in the global shrimp markets and stability in
the sea bass and sea bream market.
Operating costs in Q1 FY22 were £9.9m, 7% above the prior year as a result of
increased activity, but significantly below our revenue growth demonstrating
the operational leverage in our business. R&D expenses at £1.6m were
broadly in line with the comparative quarter (Q1 FY21: £1.7m). Total
R&D investment including capitalised development costs was £2.3m (Q1
FY21: £2.8m) reflecting the lower level of capitalised development costs
following the launch of Ectosan® Vet and CleanTreat® in Q4 FY21.
Adjusted EBITDA for the quarter was £7.4m, +145% up from £3.0m in Q1 FY21 as
a result of higher revenues, ongoing financial discipline and operational
improvements across the Group. Importantly our Adjusted EBITDA margin
increased to 18.6% (Q1 FY21: 10.4%). Depreciation and amortisation in the
quarter increased significantly from the comparative period last year to
£8.9m (Q1 FY21: £5.7m) due to both the depreciation of the leased vessels
used in the CleanTreat® operation and the commencement of amortisation of the
capitalised Ectosan® Vet and CleanTreat® development costs following the
launch at the end of FY21. These higher costs were more than offset by the
better Adjusted EBITDA and as a result, the Group reported a significant
improvement in its operating result, reducing the operating loss to £1.5m in
the period (Q1 FY21: operating loss of £3.3m).
Although Operating Loss halved, the Loss before tax, and Loss for the period,
increased due to a negative £4.9m non-cash movement in net finance costs (Q1
FY21 benefitted from £2.5m forex gain and £2.3m revaluation of hedging
instrument associated with NOK bond).
Advanced Nutrition
Advanced Nutrition delivered excellent results in the quarter building on a
strong performance in FY21 with revenues up 26% and Adjusted EBITDA increasing
more than four-fold. As the shrimp markets recover post COVID-19 we are
profiting from our leading market position, an enhanced commercial function
and new digital tools. Overall, we are emerging from the pandemic in a
stronger position.
Revenue in the quarter was £19.1m (Q1 FY21: £15.1m) with good growth across
all product areas - Artemia (+23%), Diets (+31%) and Health (+13%). By
region the Americas were up 41%, Asia +45% and Europe +1%.
Adjusted EBITDA was £4.3m (Q1 FY21: £1.0m). The increase in Adjusted EBITDA
reflects higher sales and gross profit margin and ongoing cost discipline. As
a result, adjusted EBITDA margin increased from 6.5% to 22.7%.
The shrimp markets continued to recover in the period which together with the
strategic focus on our commercial organisation contributed to our strong
performance. Examples of our commercial focus and success include receiving
an Aquatic Feed Favourite Brand Award in China for one of our lead products,
Frippak, expanding our network of distributors in Latin America and developing
new digital tools in local languages to better serve our Asian and Latin
American markets. The most recent Artemia harvest was below recent record
years which, together with increased sales, will allow us to reach normal
inventory levels over time.
During the period we obtained ISO 14001 Environmental Management System
certification for our facility in Thailand. This is an important milestone in
our sustainability programme. We are also evaluating greener energy
alternatives for our facility in Thailand as we work towards our Net Zero
targets.
Genetics
Genetics performed well in the period with revenues of £15.2m, 20% above the
prior year (Q1 FY21: £12.6m) driven by higher harvest revenues from our
broodstock licence in Salten, where we sell surplus broodstock as harvested
fish, as well as higher revenues from salmon eggs and SPR shrimp.
Adjusted EBITDA for Q1 FY22 of £3.3m was 16% lower than prior year (Q1 FY21:
£3.9m) as a result of adverse fair value movements in biological assets and
an increase in operating costs as operations normalise post COVID-19.
Excluding the reduction in fair value of biological assets of £0.1m (Q1 FY21
£1.3m uplift), Adjusted EBITDA was £3.4m, 29% above the prior year (Q1 FY21:
£2.6m).
We continued to make strategic progress during the period, with the first
deliveries of salmon eggs from the new incubation centre in Iceland as
planned. In Chile, we continued the operational ramp up of our facilities to
enable us to deliver a steady supply to the market, and we obtained organic
certification for our salmon eggs. While still in the early phase of
commercialisation entering an established market, we are growing sales in line
with our expectations and building our customer base.
In SPR shrimp we are gaining commercial traction. Sales of breeders in the
first quarter were 245% ahead of last year, in line with our commercial
roll-out plan. During the quarter we also obtained an import license in India
and secured our first customers in this important market.
We are delighted to have appointed Professor Ross Houston as Director of
Innovation, Genetics. Professor Houston has an international reputation where
his work includes the discovery of a genetic marker associated with resistance
to Infectious Pancreatic Necrosis and he leads several high-profile
aquaculture research projects focussing on the application of genomics and
genome editing technologies.
Health
Revenues in Q1 FY22 of £5.8m were significantly above the prior year
(Q1 FY21: £1.3m) due to sales from Ectosan® Vet and CleanTreat® following
the launch in Q4 FY21, together with slightly higher sales of Salmosan.
Adjusted EBITDA was a profit of £0.5m (Q1 FY21: loss of £1.1m) as a result
of the higher revenues. £1.0m of the revenue in the period (Q1 FY21: £nil)
derived from recharged vessel and fuel costs associated with the Ectosan®
Vet/CleanTreat® operations.
We have two CleanTreat® systems in operation and treatments continue to show
excellent results with efficacy above 99% and good operational efficiency.
Delivery of treatments post period end slowed down as anticipated due to
seasonal adverse weather conditions. Post period end we have placed an order
for our third CleanTreat® system, and we are working closely with customers
to optimise the future configuration of the system.
We are making progress in the trials to obtain extension of Marketing
Authorisation for Ectosan® Vet and CleanTreat® in Norway is continuing as
planned. In the period, the patent for Ectosan® Vet was approved and
granted giving 20 year protection.
Depreciation and Amortisation
Depreciation and amortisation charges increased from £5.7m to £8.9m in the
period as a result of the depreciation associated with the CleanTreat®
infrastructure and the commencement of the amortisation of the development
costs associated with Ectosan® Vet and CleanTreat®.
Finance costs, cashflow and net debt
Net finance cost for the quarter of £2.2m is significantly higher than the
prior year (Q1 FY21: credit of £2.7m), with the increase as a result of
minimal revaluation movements on financial instruments (£nil) and forex
movements (£0.2m loss) compared to much larger movements in the prior year
(Q1 FY21: £2.3m gain and £2.5m gain respectively). Interest charges
(including interest expense on right-of-use assets) of £2.2m are broadly in
line with the prior year (Q1 FY21: £2.1m).
The Group reported a cash inflow of £13.4m in the quarter, driven by an
equity raise of £20m (net proceeds) completed in November 2021. This, added
to a net cash inflow from operating activities of £1.1m was partially offset
by cash outflow from capex of £2.6m (including £0.6m of capitalised R&D)
and with tangible fixed asset additions primarily related to investments in
Genetics and cash outflow in financing activities (finance charges and
repayment of lease liabilities) of £4.6m. Net debt including lease
liabilities at the quarter end was £64.3m (30 September 2021: £80.9m).
Liquidity at the end of the period was £63.8m providing £53.8m of headroom
against our minimum liquidity covenant. Net debt excluding lease liabilities
was £43.1m (30 September 2021: £56.9m).
Outlook
The Group is performing in line with market expectations for the full year,
with continuing good performance and revenue visibility in Genetics and
Advanced Nutrition, and Health starting to benefit from the Ectosan® Vet and
CleanTreat® revenue stream. The roll-out of Ectosan Vet and CleanTreat is
progressing as expected, reflecting the anticipated challenges caused by the
winter weather. Conditions and outlook in our markets are positive with solid
salmon markets and the shrimp market showing recovery.
With a streamlined Group and leading market positions in each of our business
areas, as well as building commercial, operating and financial momentum, we
are well positioned to build on our FY21 track record and continue to deliver
improved performance, profitability and growth.
Consolidated Income Statement for period ended 31 December 2021
All figures in £000's Notes Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Revenue 4 40,014 29,030 125,062
Cost of sales (20,515) (14,359) (59,477)
Gross profit 19,499 14,671 65,585
Research and development costs (1,647) (1,745) (7,010)
Other operating costs (9,923) (9,285) (38,221)
Share of loss of equity-accounted investees, net of tax (504) (611) (905)
Adjusted EBITDA² 7,425 3,030 19,449
Exceptional - restructuring, disposal and acquisition related items 5 - (593) (184)
EBITDA¹ 7,425 2,437 19,265
Depreciation and impairment (4,495) (1,771) (8,359)
Amortisation and impairment (4,388) (3,918) (16,283)
Operating loss (1,458) (3,252) (5,377)
Finance cost (2,343) (2,149) (7,987)
Finance income 119 4,886 4,185
Loss before taxation (3,682) (515) (9,179)
Tax on loss 6 (1,427) 290 (2,397)
Loss for the period (5,109) (225) (11,576)
Loss for the period attributable to:
- Owners of the parent (5,357) (717) (12,891)
- Non-controlling interest 248 492 1,315
(5,109) (225) (11,576)
Earnings per share
Basic loss per share (pence) 7 (0.79) (0.11) (1.93)
Diluted loss per share (pence) 7 (0.79) (0.11) (1.93)
1 EBITDA - Earnings before interest, tax, depreciation, amortisation and
impairment
2 Adjusted EBITDA - EBITDA before exceptional items including acquisition
related items
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Statement of Comprehensive Income for period ended 31 December
2021
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Loss for the period (5,109) (225) (11,576)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences (2,611) (8,714) (9,929)
Cash flow hedges - changes in fair value (134) 2,898 3,054
Cash flow hedges - reclassified to profit or loss 115 156 709
Total comprehensive income for the period (7,739) (5,885) (17,742)
Total comprehensive income for the period attributable to:
- Owners of the parent (7,948) (6,624) (19,329)
- Non-controlling interest 209 739 1,587
(7,739) (5,885) (17,742)
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Balance Sheet as at 31 December 2021
31 December 2021 31 December 2020 30 September 2021
All figures in £000's Notes (unaudited) (unaudited) (audited)
Assets
Property, plant and equipment 78,082 68,820 78,780
Right-of-use assets 23,062 11,371 25,531
Intangible assets 224,192 235,644 229,040
Equity-accounted investees 2,815 3,069 3,354
Other investments 15 24 15
Biological assets 21,206 15,929 21,244
Non-current assets 349,372 334,857 357,964
Inventories 21,343 17,197 20,947
Biological assets 17,137 19,118 17,121
Trade and other receivables 43,267 35,248 46,489
Cash and cash equivalents 52,705 56,428 39,460
Current assets 134,452 127,991 124,026
Total assets 483,824 462,848 481,990
Liabilities
Trade and other payables (39,001) (28,318) (46,668)
Loans and borrowings 8 (6,872) (4,209) (10,654)
Corporation tax liability (6,936) (3,919) (5,634)
Provisions (557) - (563)
Current liabilities (53,366) (36,446) (63,519)
Loans and borrowings 8 (110,119) (104,077) (109,737)
Other payables (895) (1,822) (911)
Deferred tax (27,159) (30,450) (28,224)
Non-current liabilities (138,173) (136,349) (138,872)
Total liabilities (191,539) (172,795) (202,391)
Net assets 292,285 290,053 279,599
Issued capital and reserves attributable to owners of the parent
Share capital 9 704 668 670
Additional paid-in share capital 9 420,754 399,803 400,682
Capital redemption reserve 5 5 5
Retained earnings (159,269) (142,591) (154,231)
Hedging reserve (5,895) (6,596) (5,876)
Foreign exchange reserve 27,893 31,716 30,465
Equity attributable to owners of the parent 284,192 283,005 271,715
Non-controlling interest 8,093 7,048 7,884
Total equity and reserves 292,285 290,053 279,599
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Statement of Changes in Equity for the period ended 31 December
2021
Share Additional paid-in share capital Other Hedging Retained Total attributable Non- Total
capital
reserves*
reserve
earnings
to equity holders of
controlling
equity
parent
interest
£000 £000 £000 £000 £000 £000 £000 £000
As at 1 October 2021 (audited) 670 400,682 30,470 (5,876) (154,231) 271,715 7,884 279,599
Comprehensive income for the period
(Loss)/profit for the period - - - - (5,357) (5,357) 248 (5,109)
Other comprehensive income - - (2,572) (19) - (2,591) (39) (2,630)
Total comprehensive income for the period - - (2,572) (19) (5,357) (7,948) 209 (7,739)
Contributions by and distributions to owners
Share issue 34 20,634 - - - 20,668 - 20,668
Share issue costs recognised through equity - (562) - - - (562) - (562)
Share-based payment - - - - 319 319 - 319
Total contributions by and distributions to owners 34 20,072 - - 319 20,425 - 20,425
Total transactions with owners of the Company 34 20,072 - - 319 20,425 - 20,425
As at 30 December 2021 (unaudited) 704 420,754 27,898 (5,895) (159,269) 284,192 8,093 292,285
As at 1 October 2020 (audited) 668 399,601 40,683 (9,651) (142,170) 289,131 6,309 295,440
Comprehensive income for the period
(Loss)/profit for the period - - - - (717) (717) 492 (225)
Other comprehensive income - - (8,962) 3,055 - (5,907) 247 (5,660)
Total comprehensive income for the period - - (8,962) 3,055 (717) (6,624) 739 (5,885)
Contributions by and distributions to owners
Share issue 202 - - - 202 - 202
Share-based payment - - - - 296 296 - 296
Total contributions by and distributions to owners - 202 - - 296 498 - 498
Total transactions with owners of the Company - 202 - - 296 498 - 498
As at 31 December 2020 (unaudited) 668 399,803 31,721 (6,596) (142,591) 283,005 7,048 290,053
As at 1 October 2020 (audited) 668 399,601 40,683 (9,651) (142,170) 289,131 6,309 295,440
Comprehensive income for the period
(Loss)/profit for the period - - - - (12,891) (12,891) 1,315 (11,576)
Other comprehensive income - - (10,213) 3,775 - (6,438) 272 (6,166)
Total comprehensive income for the period - - (10,213) 3,775 (12,891) (19,329) 1,587 (17,742)
Contributions by and distributions to owners
Share issue 2 1,081 - - - 1,083 - 1,083
Share-based payment - - - - 830 830 - 830
Total contributions by and distributions to owners 2 1,081 - - 830 1,913 - 1,913
Changes in ownership
Disposal of subsidiary with NCI - - - - - - (12) (12)
Total changes in ownership interests - - - - - - (12) (12)
Total transactions with owners of the Company 2 1,081 - - 830 1,913 (12) 1,901
As at 31 Sept 2021 (audited) 670 400,682 30,470 (5,876) (154,231) 271,715 7,884 279,599
*Other reserves in this statement is an aggregation of capital redemption
reserve and foreign exchange reserve.
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Statement of Cash Flows for the period ended 31 December 2021
Q1 2022 (unaudited) Q1 2021 FY 2021 (audited)
(unaudited)
£000 £000 £000
Cash flows from operating activities
Loss for the period (5,109) (225) (11,576)
Adjustments for:
Depreciation and impairment of property, plant and equipment 2,022 1,272 5,017
Depreciation and impairment of right-of-use assets 2,473 499 3,342
Amortisation and impairment of intangible fixed assets 4,388 3,918 16,283
(Gain)/loss on sale of property, plant and equipment - (68) 46
Finance income (119) (2,336) (1,442)
Finance costs 2,247 2,149 7,987
Share of loss of equity-accounted investees, net of tax 504 611 905
Foreign exchange gains (9) (3,480) (1,800)
Share-based payment expense 319 296 830
Tax credit/(charge) 1,427 (290) 2,397
8,143 2,346 21,989
Decrease/(increase) in trade and other receivables 2,683 4,563 (8,178)
(Increase)/decrease in inventories (880) 1,799 (3,554)
Increase in biological assets (138) (2,038) (5,427)
(Decrease)/increase in trade and other payables (7,687) (11,846) 5,547
Decrease in provisions (6) (10) -
2,115 (5,186) 10,377
Income taxes paid (981) (1,241) (4,587)
Net cash flows generated from/(used in) operating activities 1,134 (6,427) 5,790
Investing activities
Purchase of investments - - (578)
Receipts from disposal of investments - - 9
Purchases of property, plant and equipment (1,914) (3,424) (17,683)
Purchase of intangibles (680) (1,128) (5,038)
Proceeds from sale of fixed assets - 286 112
Interest received 19 21 88
Net cash flows used in investing activities (2,575) (4,245) (23,090)
Financing activities
Proceeds of share issues 20,712 203 750
Share-issue costs recognised through equity (607) - -
Acquisition of NCI - - (12)
Repayment of bank or other borrowings (638) (1,664) (3,106)
Interest and finance charges paid (1,882) (1,800) (7,699)
Repayments of lease liabilities (2,730) (689) (4,602)
Net cash inflow/(outflow) from financing activities 14,855 (3,950) (14,669)
Net increase/(decrease) in cash and cash equivalents 13,414 (14,622) (31,969)
Cash and cash equivalents at beginning of period 39,460 71,605 71,605
Effect of movements in exchange rate (169) (555) (176)
Cash and cash equivalents at end of period 52,705 56,428 39,460
The accompanying notes are an integral part of this consolidated financial
information
Unaudited notes to the quarterly financial statements for the period ended 31
December 2021
1. Basis of preparation
Benchmark Holdings plc (the 'Company') is a company incorporated domiciled in
the United Kingdom. These consolidated quarterly financial statements as at
and for the three months ended 31 December 2021 represents that of the Company
and its subsidiaries (together referred to as the 'Group').
These quarterly financial statements have been prepared in accordance with IAS
34 Interim Financial Reporting and should be read in conjunction with the
Group's last annual consolidated financial statements as at and for the year
ended 30 September 2021 ('last annual financial statements'). They do not
include all of the information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to explain
events and transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the last
annual financial statements. Statutory accounts for the year ended 30
September 2021 were approved by the Directors on 29 November 2021 and will be
delivered to the Registrar of Companies. The audit report received on those
accounts was unqualified and did not make a statement under section 498 of the
Companies Act 2006 but did contain an emphasis of matter paragraph in relation
to going concern.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Management
Report.
As at 31 December 2021 the Group had net assets of £292.3m (30 September
2021: £279.6m), including cash of £52.7m (30 September 2021: £39.5m) as
set out in the consolidated balance sheet. The Group made a loss for the
quarter of £5.1m (year ended 30 September 2021: loss £11.6m).
As noted in the Management Report, we have continued to see recovery in our
end markets as the COVID-19 vaccine programmes across the world gain momentum
against the pandemic, and strong performance particularly in our Advanced
Nutrition business area, being the segment most impacted by COVID-19 because
of its exposure to global shrimp markets, has given cause for optimism about
any lasting impact. Even with this, the Directors remain cautious of any
possibility of return of restrictions before market recovery is fully complete
and available market analysis continues to be monitored to ensure appropriate
mitigating actions can be taken where necessary.
The uncertainty relating to any lasting impact on the Group of the pandemic
continues to be considered as part of the Directors' assessment of the going
concern assumption, and positive preventative measures implemented by the
Directors at an early stage in response to the pandemic continue to be in
force where necessary. The Directors have reviewed forecasts and cash flow
projections covering the period to September 2023 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 scenario analysis performed, the Directors
considered severe but plausible impacts of COVID-19 on the Group's trading and
cash flow forecasts, modelling reductions in the revenues and cash flows in
Advanced Nutrition, alongside modelling slower ramp up of the
commercialisation of Benchmark's new sea lice treatment in the Health business
area. Other key downside sensitivities modelled included assumptions on
slower than expected recovery in global shrimp markets (affecting demand for
Advanced Nutrition products), and slower commercialisation of SPR shrimp. As
noted in the Management Report, the Directors have continued to observe good
recovery in the shrimp markets in the strong performance of the Advanced
Nutrition business during the quarter. Nevertheless, mitigating measures
within the control of management were implemented early in the pandemic and a
number of these remain in place and have been factored into the downside
analysis performed. These measures include reductions in areas of
discretionary spend, deferral of capital projects and temporary hold on
R&D for non-imminent products.
While it is difficult to predict the overall outcome and impact of the
pandemic, the group ended the first quarter with strong cash balances of
£52.7m after the £20.1 equity raise (net of costs) in November 2021 and the
Group has sufficient liquidity and resources throughout the period under
review under all of the above scenario analysis, whilst still maintaining
adequate headroom against the borrowing covenants. However, it should be
noted that the Group's main borrowing facilities are set to expire within the
next 16 months - the undrawn $15m RCF is set to expire in December 2022, and
the NOK 850m bond is due to expire in June 2023. The cash flow forecasts
reviewed rely on these borrowing facilities being in place.
The Directors have commenced a review of the capital structure including
certain short-term actions and also longer-term financing options and are
confident that these facilities can be renewed or replaced before they expire,
with trading going well despite the headwinds of the pandemic, cash resources
remaining strong and relationships with finance providers positive.
Based on their assessment, the Directors believe it remains appropriate to
prepare the financial statements on a going concern basis. However, as
disclosed in the last annual financial statements, while the Directors remain
confident that the current facilities will be renewed or replaced in the next
16 months, the requirement to do this represents a material uncertainty that
may cast significant doubt on the Group's ability to continue as a going
concern and therefore to continue realising its assets and discharging its
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.
These financial statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union. The Group
reports earnings before interest, depreciation and amortisation ('EBITDA') and
EBITDA before exceptional and acquisition related items ('Adjusted EBITDA') to
enable a better understanding of the investment being made in the Group's
future growth and provide a better measure of our underlying performance.
The preparation of financial statements in compliance with adopted IFRSs
requires the use of certain critical accounting estimates. It also requires
Group management to exercise judgement in applying the Group's accounting
policies. The areas where significant judgements and estimates have been made
in preparing the financial statements and their effect are disclosed in Note
2.
2. Accounting policies
The accounting policies adopted are consistent with those used in preparing
the consolidated financial statements for the financial year ended 30
September 2021.
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total earnings.
Alternative performance measures ('APMs')
The Directors measure the performance of the Group based on a range of
financial measures, including measures not recognised by EU-adopted IFRS.
These APMs may not be directly comparable with other companies' APMs, and the
Directors do not intend these as a substitute for, or superior to, IFRS
measures.
Directors have presented the performance measures Adjusted EBITDA, Adjusted
Operating Profit, Adjusted Profit Before Tax and Adjusted EBITDA excluding
fair value movement on biological assets because they monitor performance at a
consolidated level using these and believe that these measures are relevant to
an understanding of the Group's financial performance (see note 10).
Furthermore, the Directors also refer to current period results using constant
currency, which are derived by retranslating current period results using
prior year's foreign exchange rates.
Use of estimates and judgements
The preparation of quarterly financial information requires management to make
certain judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual amounts may differ from these estimates.
In preparing these quarterly financial statements the significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those applied to the
consolidated financial statements for the year ended 30 September 2021.
3. 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.
· Advanced Nutrition - manufactures and provides technically
advanced nutrition and health products to the global aquaculture industry.
· Health - the segment provides health products and services to the
global aquaculture market.
In order to reconcile the segmental analysis to the consolidated income
statement, 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.
Segmental Revenue
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Genetics 15,195 12,616 46,797
Advanced Nutrition 19,059 15,132 70,530
Health 5,777 1,293 7,832
Corporate 1,406 1,205 4,820
Inter-segment sales (1,423) (1,216) (4,917)
Total 40,014 29,030 125,062
Segmental Adjusted EBITDA
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Genetics 3,263 3,879 11,528
Advanced Nutrition 4,320 993 13,802
Health 547 (1,117) (2,685)
Corporate (705) (725) (3,196)
Total 7,425 3,030 19,449
Reconciliations of segmental information to IFRS measures
Reconciliation of Reportable Segments Adjusted EBITDA to Loss before
taxation
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Total reportable segment Adjusted EBITDA 8,130 3,755 22,645
Corporate Adjusted EBITDA (705) (725) (3,196)
Adjusted EBITDA 7,425 3,030 19,449
Exceptional - restructuring, disposal and acquisition related items - (593) (184)
Depreciation and impairment (4,495) (1,771) (8,359)
Amortisation and impairment (4,388) (3,918) (16,283)
Net finance costs (2,224) 2,737 (3,802)
Loss before taxation (3,682) (515) (9,179)
4. Revenue
The Group's operations and main revenue streams are those described in its
financial statements to 30 September 2021. The Group's revenue is derived from
contracts with customers.
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary geographical
market and by sales of goods and services. The table includes a reconciliation
of the disaggregated revenue with the Group's reportable segments (see note
3).
Sale of goods and provision of services
3 months ended 31 December 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 14,509 19,048 3,251 - - 36,808
Provision of services 680 - 2,526 - - 3,206
Inter-segment sales 6 11 - 1,406 (1,423) -
15,195 19,059 5,777 1,406 (1,423) 40,014
3 months ended 31 December 2020 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 11,489 15,127 1,278 - - 27,894
Provision of services 1,121 - 15 - - 1,136
Inter-segment sales 6 5 - 1,205 (1,216) -
12,616 15,132 1,293 1,205 (1,216) 29,030
12 months ended 30 September 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 41,947 70,458 6,135 - - 118,540
Provision of services 4,825 - 1,697 - - 6,522
Inter-segment sales 25 72 - 4,820 (4,917) -
46,797 70,530 7,832 4,820 (4,917) 125,062
Sale of goods and provision of services (continued)
Primary geographical markets
3 months ended 31 December 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 9,679 112 4,668 - - 14,459
India 140 4,008 - - - 4,148
UK 1,957 14 88 - - 2,059
Turkey - 1,694 - - - 1,694
Greece - 1,639 - - - 1,639
Singapore - 1,138 - - - 1,138
Ecuador - 1,064 - - - 1,064
Faroe Islands 892 1 130 - - 1,023
Chile 116 - 403 - - 519
Rest of Europe 1,771 1,303 - - - 3,074
Rest of World 634 8,075 488 - - 9,197
Inter-segment sales 6 11 - 1,406 (1,423) -
15,195 19,059 5,777 1,406 (1,423) 40,014
3 months ended 31 December 2020 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 7,710 66 163 - - 7,939
India - 3,226 - - - 3,226
UK 1,430 26 235 - - 1,691
Turkey - 1,743 - - - 1,743
Greece - 1,830 - - - 1,830
Singapore - 941 - - - 941
Ecuador - 959 - - - 959
Faroe Islands 1,808 4 - - - 1,812
Chile 6 - 837 - - 843
Rest of Europe 1,160 1,438 2 - - 2,600
Rest of World 496 4,894 56 - - 5,446
Inter-segment sales 6 5 - 1,205 (1,216) -
12,616 15,132 1,293 1,205 (1,216) 29,030
Primary geographical markets (continued)
12 months ended 30 September 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 27,129 570 3,689 - - 31,388
India - 12,166 3 - - 12,169
UK 3,843 117 622 - - 4,582
Turkey - 5,977 - - - 5,977
Greece 25 6,108 - - - 6,133
Singapore - 7,544 - - - 7,544
Ecuador - 4,066 - - - 4,066
Faroe Islands 5,636 18 348 - - 6,002
Chile 437 7 2,335 - - 2,779
Rest of Europe 6,922 4,208 26 - - 11,156
Rest of World 2,780 29,677 809 - - 33,266
Inter-segment sales 25 72 - 4,820 (4,917) -
46,797 70,530 7,832 4,820 (4,917) 125,062
5. Exceptional - restructuring, disposal, and acquisition related
items
Items that are material because of their size or nature, non-recurring and
whose significance is sufficient to warrant separate disclosure and
identification within the consolidated financial statements are referred to as
exceptional items. The separate reporting of exceptional items helps to
provide an understanding of the Group's underlying performance.
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Acquisition related items - - (850)
Exceptional restructuring and disposal items - 593 480
Cost in relation to disposals - - 554
Total exceptional items - 593 184
There were no exceptional items in the quarter.
6. Taxation
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Analysis of charge in period
Current tax:
Current income tax expense on profits for the period 2,359 755 5,383
Adjustment in respect of prior periods 5 - 502
Total current tax charge 2,364 755 5,885
Deferred tax:
Origination and reversal of temporary differences (937) (1,045) (3,228)
Deferred tax movements in respect of prior periods - - (260)
Total deferred tax credit (937) (1,045) (3,488)
Total tax charge/(credit) 1,427 (290) 2,397
7. Loss per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares in issue during the period.
Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Loss attributable to equity holders of the parent (£000) (5,357) (717) (12,891)
Weighted average number of shares in issue (thousands) 681,271 667,926 669,459
Basic loss per share (pence) (0.79) (0.11) (1.93)
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.
At 31 December 2021, a total of 5,782,581 potential ordinary shares have not
been included within the calculation of statutory diluted loss per share for
the period as they are anti-dilutive (30 September 2021: 4,621,300 and 31
December 2020: 2,944,955). These potential ordinary shares could dilute
earnings/loss per share in the future.
8. Loans and borrowings
The Group's borrowing facilities include a USD 15m RCF provided by DNB Bank
ASA (50%) and HSBC UK Bank PLC (50%). At 31 December 2021 the whole facility
(USD 15m) was undrawn.
9. Share capital and additional paid-in share capital
Number Share Capital Additional
paid-in
share
capital
Allotted, called up and fully paid £000 £000
Ordinary shares of 0.1 pence each
Balance at 30 September 2021 670,374,484 670 400,682
Shares issued through placing and open offer 33,401,620 34 20,069
Exercise of share options 10,910 - 3
Balance at 31 December 2021 703,787,014 704 420,754
On 29 November 2021, the Company issued 33,401,620 new ordinary shares of 0.1
pence each by way of a placing and subscriptions at an issue price of 62.0
pence per share. Gross proceeds of £20.7m were received for the placing and
subscription shares. Non-recurring costs of £0.6m were in relation to the
share issues and this has been charged to the share premium account (presented
within Additional paid-in share capital).
During the period ended 31 December 2021, the Group issued a total of 10,910
ordinary shares of 0.1 pence each to certain employees of the Group relating
to share options, of which 3,000 were exercised at a price of 0.1 pence and
7,910 were exercised at a price of 42.5 pence.
10. Alternative performance measures and other metrics
Management has presented the performance measures EBITDA, Adjusted EBITDA,
Adjusted EBITDA before fair value movement in biological assets, Adjusted
Operating Profit and Adjusted Profit Before Tax because it monitors
performance at a consolidated level using these and believes that these
measures are relevant to an understanding of the Group's financial
performance.
Adjusted EBITDA which reflects underlying profitability, is earnings before
interest, tax, depreciation, amortisation, impairment, and exceptional items
including acquisition related items and is shown on the Income Statement.
Adjusted EBITDA before fair value movements in biological assets, which is
Adjusted EBITDA before the non-cash fair value movements in biological assets
arising from their revaluation in line with International Accounting
Standards.
Adjusted Operating Profit is operating loss before exceptional items including
acquisition related items and amortisation and impairment of intangible assets
excluding development costs as reconciled below.
Adjusted Profit Before Tax is earnings before tax, amortisation and impairment
of intangibles assets excluding development costs, and exceptional items
including acquisition related items as reconciled below.
These measures are not defined performance measures in IFRS. The Group's
definition of these measures may not be comparable with similarly titled
performance measures and disclosures by other entities.
Reconciliation of Adjusted Operating Profit to Operating Loss
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Revenue 40,014 29,030 125,062
Cost of sales (20,515) (14,359) (59,477)
Gross profit 19,499 14,671 65,585
Research and development costs (1,647) (1,745) (7,010)
Other operating costs (9,923) (9,285) (38,221)
Depreciation and impairment (4,495) (1,771) (8,359)
Amortisation of capitalised development costs (448) - (299)
Share of loss of equity accounted investees net of tax (504) (611) (905)
Adjusted operating profit 2,482 1,259 10,791
Exceptional - restructuring, disposal and acquisition related items - (593) (184)
Amortisation and impairment of intangible assets excluding development costs (3,940) (3,918) (15,984)
Operating loss (1,458) (3,252) (5,377)
10. Alternative performance measures and other metrics (continued)
Reconciliation of Loss Before Taxation to Adjusted Profit Before Tax
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Loss before taxation (3,682) (515) (9,179)
Exceptional - restructuring, disposal and acquisition related items - 593 184
Amortisation and impairment of intangible assets excluding development costs 3,940 3,918 15,984
Adjusted profit before tax 258 3,996 6,989
Other Metrics
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Total R&D Investment
Research and development costs 1,647 1,745 7,010
Internal capitalised development costs 627 1,060 4,813
Total R&D investment 2,274 2,805 11,823
All figures in £000's Q1 2022 Q1 2021 FY 2021
(unaudited)
(unaudited)
(audited)
Adjusted EBITDA excluding fair value movement in biological assets
Adjusted EBITDA 7,425 3,030 19,449
Exclude fair value movement 96 (1,276) (3,323)
Adjusted EBITDA excluding fair value movement in biological assets 7,521 1,754 16,126
Liquidity
Following the refinancing in June 2019 a key financial covenant is a minimum
liquidity of £10m, defined as cash plus undrawn facilities.
31 December 2021
All figures in £000's (unaudited)
Cash and cash equivalents 52,705
Undrawn bank facility 11,082
63,787
11. Net debt
Net debt is cash and cash equivalents less loans and borrowings.
31 December 2021 31 December 2020 30 September 2021
All figures in £000's (unaudited) (unaudited) (audited)
Cash and cash equivalents 52,705 56,428 39,460
Loans and borrowings (excluding lease liabilities) - current (1,592) (1,620) (1,612)
Loans and borrowings (excluding lease liabilities) - non-current (94,170) (95,244) (94,792)
Net debt excluding lease liabilities (43,057) (40,436) (56,944)
Lease liabilities - current (5,280) (2,589) (9,042)
Lease liabilities - non-current (15,949) (8,833) (14,945)
Net debt (64,286) (51,858) (80,931)
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 QRFPPUBAPUPPPPGRecent news on Benchmark Holdings
See all newsREG - Numis Securities Ltd Benchmark Hlgs PLC - Form 8.5 (EPT/RI) - Benchmark Holdings plc
AnnouncementREG - Numis Securities Ltd Benchmark Hlgs PLC - Form 8.5 (EPT/RI) - Benchmark Holdings Plc
AnnouncementREG - DNB Asset Management Benchmark Hlgs PLC - FORM 8.3 - BENCHMARK HOLDINGS PLC
AnnouncementREG - Numis Securities Ltd Benchmark Hlgs PLC - Form 8.5 (EPT/RI) - Benchmark Holdings Plc
AnnouncementREG - Takeover Panel - Disclosure Table
Announcement