REG - Benchmark Hlgs PLC - Second Quarter and Interim results
18/05/2022 07:00
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RNS Number : 8547L Benchmark Holdings PLC 18 May 2022
18 May 2022
Benchmark Holdings plc
("Benchmark", the "Company" or the "Group")
Second Quarter and Interim results for the six months ended 31 March 2022
Excellent H1 and Q2 results building on strong FY21 performance
Benchmark (LSE: BMK), the aquaculture biotechnology company, announces its
unaudited interim results for the six months ended 31 March 2022 (the
"Period"). The Company also announces its unaudited results for the three
months ended 31 March 2022 in compliance with the terms of its senior secured
bond.
Financial highlights
· Excellent H1 FY22 performance:
o +33% growth in revenues (+32% at constant exchange rate (CER)) to £79.2m
(H1 FY21:£59.5m)
o 100% increase in Adjusted EBITDA (+96% CER) ) to £15.9m (H1 FY21: £7.9m)
o 149% increase (143% CER) in Adjusted EBITDA excluding fair value movement
in biological assets to £14.8m (H1 FY21: £6.0m)
o Adjusted EBITDA margin increased to 20% (H1 FY21: 13%)
o H1 FY22 operating cash inflow £2.0m (H1 FY21: cash outflow of £1.5m)
· Q2 performance:
o Represents fourth consecutive quarter of year-on-year and
quarter-on-quarter Adjusted EBITDA growth; Adjusted EBITDA rose by 72% (+68%
CER) to £8.4m (Q2 FY21: £4.9m)
o Loss before tax significantly narrowed to (£1.5m) (Q2 FY21:(£2.7m))
· Net debt excluding lease liabilities £50.6m (30 September 2021:
£56.9m)
o Cash and cash equivalents of £46.3m after cash inflow of £6.0m,
including £20.1m raised from a successful cash placing in the period to
maintain growth momentum
Operating highlights
· Good progress on roll-out of Ectosan® Vet and CleanTreat®
o Solution continues to operate effectively delivering 99%+ efficacy and
good animal welfare
o Growing customer base, third CleanTreat® system ordered and development
of new system configuration underway
o Marketing Authorisation for second re-use of treatment water, increasing
operational efficiency and customer appeal, was granted post period-end
· Continued strong momentum in Advanced Nutrition with strong growth in
revenues and earnings for all product groups and areas.
· Continued growth in salmon egg sales in Genetics with contracted sales
underpinning a strong outlook for the year
· Commercialisation of specific pathogen-resistant (SPR) shrimp
progressing well with good take-up in key markets including India
· Sustainability: investing in solar panels at main production facility
in Thailand which will contribute significantly towards Net Zero targets
Current trading and outlook
· Trading in line with expectations:
o Strong outlook for salmon egg sales for remainder of the year
o Healthy outlook for the year in Advanced Nutrition, phased towards Q4 due
to seasonality and normal shift in revenues across quarters
o Continued effort to embed Ectosan® Vet and CleanTreat® into customers'
sea lice strategies
· Decision to pursue a listing on Euronext Growth Oslo in H2 calendar
year 2022:
o As previously announced, the Company engaged DNB Markets and Pareto
Securities as Joint Global Coordinators in connection with its assessment of a
listing in Oslo
o Intention to uplist to the Oslo Stock Exchange (Oslo Børs) within the
following twelve months
o Listing subject to favourable market conditions
£m % CER Q2 FY21 % CER
H1 FY22 H1 FY21 H1 FY22 Q2 FY22 Q2 FY22
Revenue 79.2 59.5 +32% 39.2 30.4 +26%
+33% +29%
Adjusted
Adjusted EBITDA(1) 15.9 7.9 +96% 8.4 4.9 +68%
+100% +72%
Adj. EBITDA excluding biological asset movements 14.8 6.0 +143% 7.3 4.2 +69%
+149% +74%
Adjusted Operating Profit(2) 4.9 4.4 +3% 2.4 3.2 -31%
+11% -25%
Statutory
Operating loss (2.2) (4.6) (0.7) (1.4)
Loss before tax (5.1) (3.3) (1.5) (2.7)
Basic loss per share (p) (1.32) (0.57) (0.54) (0.46)
Net debt(3) (81.4) (56.5) (81.4) (56.5)
Net debt(3) excluding lease liabilities (50.6) (42.5) (50.6) (42.5)
Business Area summary
£m %CER* % CER*
H1 FY22 H1 FY21 H1 FY22 Q2 FY22 Q2 FY21 Q2 FY22
Revenue
Advanced Nutrition 42.0 35.0 +19% 23.0 19.9 +12%
+20% +15%
Genetics 26.6 22.1 +18% 11.4 9.5 +18%
+20% +20%
Animal Health 10.7 2.3 +359% 4.9 1.0 +372%
+358% +371%
Adjusted EBITDA(1)
Advanced Nutrition 11.5 6.2 +81% 7.2 5.2 +32%
+84% +36%
Genetics 5.7 6.0 -7% 2.4 2.1 +14%
-5% +15%
- Net of fair value movements in biological assets 4.7 4.0 +12% 1.3 1.4 -9%
+16% -7%
Animal Health 0.1 (2.6) (0.5) (1.4)
*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
· Advanced Nutrition
o H1 FY22:
§ Revenue up 20%, with higher sales in all product areas and geographical
regions reflecting success of enhanced commercial organisation and recovering
shrimp market
§ Adjusted EBITDA up 84% driven by excellent cost control and revenue growth
§ Adjusted EBITDA margin significantly increased to 27% (H1 FY21: 18%)
o Q2 FY22
§ Revenue +15% and Adjusted EBITDA +36% translated into an Adjusted EBITDA
margin of 31% for the quarter (Q2 FY21: 26%)
o Continue to launch new technologies
§ Launch of automatic Artemia separation tool "Sep-Art Automag" delivering
sustainability benefits
o Post period end, closure of Thailand trial facility as part of ongoing
optimisation of operations
· Genetics
o H1 FY22:
§ Revenue up 20% from prior year as a result of higher harvest income and egg
revenues
§ Adjusted EBITDA up by 16% excluding fair value movements in biological
assets
o Q2 FY22
§ Revenue 20% up from prior year
§ Adjusted EBITDA down 7% excluding fair value movements in biological
assets, reflecting ongoing investment in growth areas - Chile, SPR shrimp and
tilapia
o SPR shrimp sales ahead of expectations particularly in India and Indonesia
o Obtained organic certification for salmon eggs in Chile
o First deliveries of eggs from new incubation centre in Iceland showing
excellent quality
o One Benchmark: the Group's cross-selling efforts delivered a new contract
post period end, with the largest sea bass/sea bream producer in Turkey to
provide genetic improvement services
· Animal Health
o H1 FY22
§ Revenue +358% reflecting revenues from Ectosan® Vet and CleanTreat®
§ Adjusted EBITDA showed profit of £0.1m (H1 FY21: (£2.6m) loss)
o Q2 FY22
§ Revenue +371% reflecting revenues from Ectosan® Vet and CleanTreat®
§ Adjusted EBITDA loss of (£0.5m) (Q2 FY21: £(1.4m) loss)
§ Q2 FY22 adversely impacted by extreme weather conditions in January which
made it impractical to carry out Ectosan® Vet and CleanTreat® treatments
o Progress on the roll-out of Ectosan® Vet and CleanTreat® as mentioned
above
o Post period end
§ Granted Marketing Authorisation ("MA") for re-use of treatment water,
increasing operational efficiency and customer appeal
§ The Company submitted an MA application for Ectosan® Vet in the Faroe
Islands
Trond Williksen, CEO, commented:
"Benchmark delivered an excellent performance in the first half of the year.
Evidence continues of the benefits of a restructured organisation with renewed
commercial focus and financial discipline driving growth and returns.
The Group delivered strong double digit revenue growth across all our business
areas, a doubling of Adjusted EBITDA and a significant increase in Adjusted
EBITDA margin. Q2 represented the fourth consecutive quarter of substantial
growth in the Group's revenues and Adjusted EBITDA.
We have visible growth opportunities underpinned by existing infrastructure
and are uniquely positioned in an industry with strong fundamentals driven by
megatrends."
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 8742, or by email on benchmark (mailto:benchmark@mhpc.com) @mhpc.com
(mailto:benchmark@mhpc.com)
Enquiries
For further information, please contact:
Benchmark Holdings plc benchmark@mphc.com
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@mhpc.com (mailto:benchmark@mhpc.com)
About Benchmark
Benchmark is a market leading aquaculture biotechnology company. Benchmark's
mission is to drive sustainability in aquaculture by delivering products and
solutions in genetics, advanced nutrition and health which improve yield,
growth and animal health and welfare.
Through a global footprint in 26 countries and a broad portfolio of products
and solutions, Benchmark addresses many of the major aquaculture species -
salmon, shrimp, sea bass and sea bream, and tilapia, in all the major
aquaculture regions around the world. Find out more at www.benchmarkplc.com
Management Report
The Group delivered an excellent performance in the first half of the year
reporting a 33% growth in revenue and 149% growth in Adjusted EBITDA excluding
fair value movements from biological assets. Performance was strong across all
business areas with each business area reporting at least double digit growth
in revenues.
The commercial traction in Advanced Nutrition resulting from our refocused
commercial organisation continued, with growth in every product area and
geography. In Health the roll-out of Ectosan® Vet and CleanTreat® resulted
in a significant increase in revenues and profit. Genetics continued to
execute its strategy of organic growth in well established markets achieving
good revenue growth, while expanding and investing in opex in new areas such
as SPR shrimp, salmon in Chile and tilapia.
Operating costs in H1 FY22 were £19.9m, a 6% increase from the prior year due
to higher activity levels, however the increase was significantly below
revenue growth, demonstrating the operational leverage in the business
alongside the well embedded cost discipline across the Group.
R&D expenses at £3.2m, were 11% below H1 FY21. Total R&D investment
including capitalised development costs was £4.6m, 21% below the prior year
(H1 FY21: £5.8m) reflecting the transition to the commercial phase of
Ectosan® Vet and CleanTreat®.
Adjusted EBITDA excluding fair value movement from biological assets was
£14.8m, +149% up from £6.0m in H1 FY21 as a result of higher revenues,
increased asset utilisation and ongoing cost control. As a result, the Group
achieved an Adjusted EBITDA margin of 20% (H1 FY21: 13%). Depreciation and
amortisation increased from the comparative period last year to £18.9m (H1
FY21: £11.7m) due to the depreciation of the Cleantreat® units and 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
in the period by more than half to (£2.2m) in the period (H1 FY21: operating
loss of (£4.6m)).
Net finance costs for H1 FY22 were £3.0m (H1 FY21: income £1.4m). The main
year on year movements were lower gains on fair value of financial instruments
and forex gains of £0.6m (H1 FY21: £2.4m) and £0.5m (H1 FY21: 3.3m)
respectively, but there was also a reduction in borrowing costs on the NOK
bond of £0.4m due to the higher interest rates suffered in the previous year
before the NOK bond was listed. These were offset by higher interest charges
on right of use assets from the two CleanTreat vessels in operation this year.
This left loss before tax in H1 FY22 £1.8m higher than the previous year at
£5.1m (H1 FY21: £3.3m).
Although loss before tax is higher in H1 FY22 than H1 FY21, the tax charge has
increased to £3.6m (H1 FY21: £0.2m credit) due to higher profits in the
Advanced Nutrition business area in territories where there is no opportunity
for losses to be utilised. Loss after tax was £8.8m (H1 FY21: £3.1m)
The Group reported a net operating cash inflow of £2.0m after an increase in
working capital of £13.5m related to the growth of sales and increase of
associated inventory levels in Ectosan® Vet and Advanced Nutrition, and tax
payments of £3.0m. Net cash outflow from investing activities was £6.6m of
which PPE capex was £5.1m primarily in Genetics (£2.8m) and Health (£1.7m)
and capitalised R&D was £1.5m (mainly in SPR Shrimp). Net cash inflow
from financing activities of £10.7m, includes an equity raise of (net)
£20.1m, £4.8m of lease payments and the NOK bond coupon payments. Our cash
position at the end of the period was £46.3m.
Advanced Nutrition
Advanced Nutrition delivered an excellent result in the first half of the year
continuing the strong performance in FY21 and in Q1 FY22, with revenues up 20%
and Adjusted EBITDA increasing by 84%. All product areas and geographic
regions achieved growth - Artemia (+19%), Diets (+18%) and Health (+11%). By
region the Americas were up 23%, Asia +7% and Europe +9%. The shrimp markets
continue to show recovery creating a positive outlook for this area of our
business.
With the growth in sales, asset utilisation increased, driving operational
leverage and leading to Adjusted EBITDA of £11.5m (H1 FY21: £6.2m), and an
Adjusted EBITDA margin of 27% (H1 FY21: 18%).
During the period we completed an energy efficiency study at our main
production facility in Thailand identifying significant opportunities to
reduce our carbon footprint towards our Net Zero targets. As a result we took
the decision to invest in a solar panel installation which is expected to
significantly reduce the carbon footprint of the facility once complete.
Post period end, as part of our ongoing efforts to optimise our operations, we
closed our trial facilities in Thailand, which increases our flexibility and
removes the investment associated with maintaining state of the art
facilities.
Genetics
Genetics delivered a good performance in the first half of the year with
revenues of £26.6m, 20% above the prior year (H1 FY21: £22.1m) driven by
higher harvest revenues from our broodstock licence, as well as higher
revenues from salmon eggs and SPR shrimp.
Revenues from salmon eggs increased by 2% while SPR shrimp revenues grew more
than three-fold reflecting the success of our commercial launch post test
market in FY21. SPR shrimp sales were ahead of expectations particularly in
India and Indonesia. We won new genetics services contracts with major sea
bass/bream and tilapia producers. We completed the expansion of our Tilapia
facility in Miami, following some delays due to global supply shortages,
meaning that we now have the infrastructure in place to produce tilapia
year-round.
Adjusted EBITDA for H1 FY22 excluding fair value movements of biological
assets was £4.7m, 16% ahead of the prior year (H1 FY21: £4.0m). Including
fair value movements Adjusted EBITDA for the first half was £5.7m, 5% below
the same period last year.
We continued to make progress in our growth areas with the first deliveries of
salmon eggs from the new incubation centre in Iceland showing excellent
quality. We completed expansion projects in the US for our SPR shrimp and
tilapia. 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.
Looking forward to the second half of FY22 we already have contracted sales
for salmon eggs underpinning a strong FY22 performance.
Health
Revenues in H1 FY22 increased to £10.7m (H1 FY21: £2.3m) due to sales from
Ectosan® Vet and CleanTreat® which were launched in Q4 FY21. Salmosan sales
were 7% below the prior year primarily as a result of lower sales in Chile
offset by improved sales in Canada. Adjusted EBITDA was a profit of £0.1m
(H1 FY21: loss of £(2.6)m) as a result of the higher revenues. £2.2m of
the revenue in the period (H1 FY21: £nil) was derived from recharging vessel
and fuel costs associated with the Ectosan® Vet and CleanTreat® operations.
Treatments performed with Ectosan® Vet and CleanTreat® reported efficacy
above 99% and the period for the fish to return to feed was nil days, an
important indicator of animal welfare. The roll-out of our transformational
sea lice solutions is progressing, with an increasing number of customers and
growing customer interest. This led us to move ahead with commencing the
build of a third CleanTreat® system. In addition we are exploring
alternative system configurations tailored to specific customer needs.
Post period end, on 3rd May, we announced the grant of a variation to the
Marketing Authorisation of Ectosan® in Norway, which enables the re-use of
treatment water on a second batch of fish. This is an important step towards
our goal of optimising the efficiency of our treatments, improving the appeal
of the solution to more customers. Further trials to support the multiple
re-use of treatment water are ongoing.
Q2 FY22 commentary
The Group reported revenue of £39.2m, 29% above prior year of £30.4m. This
was driven by revenue growth in all business areas with Advanced Nutrition
reporting revenue +15%, Genetics +20% and Health +371% higher than the
comparative period in the prior year.
Adjusted EBITDA excluding fair value uplift from biological assets was £7.3m,
74% ahead of the prior year and 69% higher on a constant currency basis (Q2
FY21: £4.2m), reflecting higher revenues, operational leverage and good cost
control. By business area, Advanced Nutrition reported an increase in Adjusted
EBITDA of 36%, and Health was up +64%, while Genetics was -7% down. Including
fair value movements from biological assets Genetics was up 16%.
Operating costs of £10m were 6% above last year (Q2 FY21: 9.4m) primarily
driven by an increase in Health associated with the launch and roll-out of
Ectosan® Vet and CleanTreat®. R&D expenses of £1.6m were 11% below the
prior year (Q2 FY21: £1.8m) and represented 4% of Group revenues (Q2 FY21:
6%). After an increase in depreciation and amortisation to £10.0m (Q2 FY21:
£6.0m), Group operating loss halved to £0.7m (Q2 FY21:£1.4m).
Net finance costs of £0.8m were lower than the comparative period (Q2 FY21:
£1.4m) due to lower interest rates following the listing of the NOK bond in
the prior year and a higher gain on the fair value of financial instruments,
offset by lower FX gains in Q2 FY22, leaving loss before tax at £1.5m for the
quarter (Q2 FY21: £2.7m).
The tax charge of £2.2m was higher than last year (Q2 FY21: £0.1m) due to
higher profits in Advanced Nutrition in the quarter in territories where no
loss relief was available. Loss after tax for the quarter was £3.7m (Q2
FY21: £2.8m).
Oslo Listing
As previously announced, the Company engaged DNB Markets and Pareto Securities
as Joint Global Coordinators in connection with its assessment of a potential
listing in Oslo. The Company has decided to pursue a listing on Euronext
Growth Oslo (operated by the Oslo Stock Exchange) during the second half of
the calendar year (subject to favourable market conditions). Although no
final decision has been made, the Company then has an intention to uplist to
the Oslo Børs Stock Exchange within the following twelve months.
Outlook
The Group had an excellent start to the year and is trading in line with
market expectations.
Our fundamentals are strong and our opportunities are significant. Aquaculture
is a growth industry, supported by robust megatrends with an increasing focus
on sustainability challenges as it expands. The answer to sustainability
lies in innovation - bringing forward new sustainable solutions. As a focused
aquaculture biotechnology company, Benchmark is well positioned to play an
important role, helping to improve sustainability across the aquaculture value
chain.
Medium term objectives
In 2020, following a management change, the Group completed a restructuring
programme to reduce the cash burn, right-size the cost base and strengthen the
Group's balance sheet, moving the Group from an R&D investment phase
towards profitability and returns. In addition, the new management team put in
place a new commercial culture and performance framework, as well as financial
processes to control costs and investments. This has resulted in consistent
and significant growth in Revenue and Adjusted EBITDA, and an improvement in
cashflow management, narrowing the Group's net loss. This positive momentum is
anchored by solid foundations with two well established, market leading
profitable business units with good financial visibility, and significant
growth opportunities which enable the Group to set medium term financial
objectives that would translate into attractive cash generation and returns.
The Group's medium term objectives are to achieve the following within three
to five years:
· to generate revenue growth of 15%-18% per annum
· to deliver an Adjusted EBITDA margin ranging from 25%-30%.
· to deliver cashflow conversion ratio(1) of 70-80% from Adjusted
EBITDA, creating the ability for significant organic deleveraging of the
business by reducing net debt while increasing Adjusted EBITDA.
· to produce free cash flow(2) as a percentage of sales of between 10%
and 15%.
· to earn an Adjusted Return on Capital Employed(3) of more than 15%
within three to five years.
Our medium term Group objectives are underpinned by objectives of 10%-15%
annual revenue growth and 22-27% Adjusted EBITDA margin in Genetics and 7%-10%
annual revenue growth and 20-25% Adjusted EBITDA margin in Advanced Nutrition.
These are two well established, market leading businesses which provide good
financial visibility. Growth in the Company's third business unit, Health, is
driven by the roll-out of its sea lice solution Ectosan® Vet and CleanTreat®
from which the Company aims to generate £50 to £75m annual revenue within
three to five years. Adjusted EBITDA margin in this area is dependent on a
number of factors including obtaining an extended MA for multiple re-use of
treatment water, geographic expansion and on embedding the solution in our
customers' infrastructure through tailored configuration. The Group aims to
achieve a 60% Adjusted EBITDA margin in Health when Ectosan(®) Vet and
CleanTreat(®) are fully commercialised in the outer years of the period.
1. Cash generated from operations after working capital and taxes as
percentage of Adj. EBITDA
2. Free cash flow: Net cash from operating activities less capex and
lease payments (excluding cash interest)
3. Adj. ROCE calculated as adjusted operating profit as a % of average
capital employed excluding goodwill and acquired intangible assets
Consolidated Income Statement for period ended 31 March 2022
All figures in £000's Notes Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Revenue 4 39,233 30,435 79,247 59,465 125,062
Cost of sales (19,210) (14,263) (39,725) (28,622) (59,477)
Gross profit 20,023 16,172 39,522 30,843 65,585
Research and development costs (1,590) (1,837) (3,237) (3,582) (7,010)
Other operating costs (9,984) (9,411) (19,907) (18,696) (38,221)
Share of loss of equity-accounted investees, net of tax (24) (30) (528) (641) (905)
Adjusted EBITDA² 8,425 4,894 15,850 7,924 19,449
Exceptional - restructuring, disposal and acquisition related items 5 908 (275) 908 (868) (184)
EBITDA¹ 9,333 4,619 16,758 7,056 19,265
Depreciation and impairment (5,557) (1,723) (10,052) (3,494) (8,359)
Amortisation and impairment (4,484) (4,260) (8,872) (8,178) (16,283)
Operating loss (708) (1,364) (2,166) (4,616) (5,377)
Finance cost (2,684) (2,466) (4,747) (4,395) (7,987)
Finance income 1,930 1,092 1,769 5,758 4,185
Loss before taxation (1,462) (2,738) (5,144) (3,253) (9,179)
Tax on loss 6 (2,189) (104) (3,616) 186 (2,397)
Loss for the period (3,651) (2,842) (8,760) (3,067) (11,576)
Loss for the period attributable to:
- Owners of the parent (3,775) (3,101) (9,132) (3,818) (12,891)
- Non-controlling interest 124 259 372 751 1,315
(3,651) (2,842) (8,760) (3,067) (11,576)
Earnings per share
Basic loss per share (pence) 7 (0.54) (0.46) (1.32) (0.57) (1.93)
Diluted loss per share (pence) 7 (0.54) (0.46) (1.32) (0.57) (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 the period ended 31 March 2022
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Loss for the period (3,651) (2,842) (8,760) (3,067) (11,576)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences 9,812 (4,955) 7,201 (13,669) (9,929)
Cash flow hedges - changes in fair value 3,082 (77) 2,948 2,821 3,054
Cash flow hedges - reclassified to profit or loss 63 132 178 288 709
Total comprehensive income for the period 9,306 (7,742) 1,567 (13,627) (17,742)
Total comprehensive income for the period attributable to:
- Owners of the parent 8,784 (8,033) 836 (14,657) (19,329)
- Non-controlling interest 522 291 731 1,030 1,587
9,306 (7,742) 1,567 (13,627) (17,742)
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Balance Sheet as at 31 March 2022
31 March 2022 31 March 2021 30 September 2021
All figures in £000's Notes (unaudited) (unaudited) (audited)
Assets
Property, plant and equipment 81,568 70,160 78,780
Right-of-use assets 31,360 14,102 25,531
Intangible assets 226,912 230,739 229,040
Equity-accounted investees 2,821 3,271 3,354
Other investments 15 15 15
Biological and agricultural assets 17,089 15,293 21,244
Non-current assets 359,765 333,580 357,964
Inventories 22,140 19,469 20,947
Biological and agricultural assets 24,294 21,111 17,121
Trade and other receivables 47,275 31,008 46,498
Cash and cash equivalents 46,294 53,630 39,460
Current assets 140,003 125,218 124,026
Total assets 499,768 458,798 481,990
Liabilities
Trade and other payables (33,284) (29,960) (46,668)
Loans and borrowings 8 (13,546) (7,279) (10,654)
Corporation tax liability (7,733) (3,971) (5,634)
Provisions (551) - (563)
Current liabilities (55,114) (41,210) (63,519)
Loans and borrowings 8 (114,185) (102,867) (109,737)
Other payables (936) (1,787) (911)
Deferred tax (27,524) (29,442) (28,224)
Non-current liabilities (142,645) (134,096) (138,872)
Total liabilities (197,759) (175,306) (202,391)
Net assets 302,009 283,492 279,599
Issued capital and reserves attributable to owners of the parent
Share capital 9 704 670 670
Additional paid-in share capital 9 420,824 400,574 400,682
Capital redemption reserve 5 5 5
Retained earnings (162,696) (145,284) (154,231)
Hedging reserve (2,750) (6,543) (5,876)
Foreign exchange reserve 37,307 26,731 30,465
Equity attributable to owners of the parent 293,394 276,153 271,715
Non-controlling interest 8,615 7,339 7,884
Total equity and reserves 302,009 283,492 279,599
The accompanying notes are an integral part of this consolidated financial
information.
Consolidated Statement of Changes in Equity for the period ended 31 March 2022
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 - - - - (9,132) (9,132) 372 (8,760)
Other comprehensive income - - 6,842 3,126 - 9,968 359 10,327
Total comprehensive income for the period - - 6,842 3,126 (9,132) 836 731 1,567
Contributions by and distributions to owners
Share issue 34 20,704 - - - 20,738 - 20,738
Share issue costs recognised through equity - (562) - - - (562) - (562)
Share-based payment - - - - 667 667 - 667
Total contributions by and distributions to owners 34 20,142 - - 667 20,843 - 20,843
Total transactions with owners of the Company 34 20,142 - - 667 20,843 - 20,843
As at 30 March 2022 (unaudited) 704 420,824 37,312 (2,750) (162,696) 293,394 8,615 302,009
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 - - - - (3,818) (3,818) 751 (3,067)
Other comprehensive income - - (13,947) 3,108 - (10,839) 279 (10,560)
Total comprehensive income for the period - - (13,947) 3,108 (3,818) (14,657) 1,030 (13,627)
Contributions by and distributions to owners
Share issue 2 973 - - - 975 - 975
Share-based payment - - - - 704 704 - 704
Total contributions by and distributions to owners 2 973 - - 704 1,679 - 1,679
Total transactions with owners of the Company 2 973 - - 704 1,679 - 1,679
As at 31 March 2021 (unaudited) 670 400,574 26,736 (6,543) (145,284) 276,153 7,339 283,492
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
Acquisition of 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 30 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 March 2022
Q2 2022 (unaudited) Q2 2021 FY 2021 (audited)
(unaudited)
£000 £000 £000
Cash flows from operating activities
Loss for the period (8,760) (3,067) (11,576)
Adjustments for:
Depreciation and impairment of property, plant and equipment 4,187 2,457 5,017
Depreciation and impairment of right-of-use assets 5,865 1,037 3,342
Amortisation and impairment of intangible fixed assets 8,872 8,178 16,283
Loss on sale of property, plant and equipment - - 46
Gain on sale of other investments - (91) -
Finance income (225) (43) (1,442)
Finance costs 3,714 1,976 7,987
Increase in fair value of contingent consideration receivable (909) - -
Share of loss of equity-accounted investees, net of tax 528 641 905
Foreign exchange losses 841 (3,809) (1,800)
Share-based payment expense 667 704 830
Tax credit 3,616 (186) 2,397
18,396 7,797 21,989
Decrease/(increase) in trade and other receivables 108 8,037 (8,178)
Increase in inventories (1,610) (1,424) (3,554)
Increase in biological and agricultural assets (1,635) (3,517) (5,427)
(Decrease)/increase in trade and other payables (10,317) (10,327) 5,547
Decrease in provisions (12) (22) -
4,930 544 10,377
Income taxes paid (2,975) (2,025) (4,587)
Net cash flows generated from/(used in) operating activities 1,955 (1,481) 5,790
Investing activities
Purchase of investments (48) (247) (578)
Receipts from disposal of investments - 99 9
Purchases of property, plant and equipment (5,084) (6,632) (17,683)
Purchase of intangibles (1,523) (2,337) (5,038)
Proceeds from sale of fixed assets 3 19 112
Interest received 25 42 88
Net cash flows used in investing activities (6,627) (9,056) (23,090)
Financing activities
Proceeds of share issues 20,782 641 750
Share-issue costs recognised through equity (607) - -
Acquisition of NCI - - (12)
Repayment of bank or other borrowings (939) (2,405) (3,106)
Interest and finance charges paid (3,757) (3,892) (7,699)
Repayments of lease liabilities (4,769) (1,114) (4,602)
Net cash inflow/(outflow) from financing activities 10,710 (6,770) (14,669)
Net increase/(decrease) in cash and cash equivalents 6,038 (17,307) (31,969)
Cash and cash equivalents at beginning of period 39,460 71,605 71,605
Effect of movements in exchange rate 796 (668) (176)
Cash and cash equivalents at end of period 46,294 53,630 39,460
The accompanying notes are an integral part of this consolidated financial
information.
1. Basis of preparation
Benchmark Holdings plc (the 'Company') is a company incorporated domiciled in
the United Kingdom. These consolidated interim financial statements as at and
for the six months ended 31 March 2022 represents that of the Company and its
subsidiaries (together referred to as the 'Group').
These interim 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 have
been 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 March 2022 the Group had net assets of £302.0m (30 September 2021:
£279.6m), including cash of £46.3m (30 September 2021: £39.5m) as set out
in the consolidated balance sheet. The Group made a loss for the six months of
£8.8m (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
£43.6m after the £20.1m equity raise (net of costs) in Q1 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 13 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 the refinancing process 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
13 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.
1. Basis of preparation (continued)
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 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.
3. Segment information (continued)
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 Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Genetics 11,408 9,514 26,603 22,130 46,797
Advanced Nutrition 22,974 19,895 42,033 35,027 70,530
Health 4,916 1,044 10,693 2,337 7,832
Corporate 1,406 1,199 2,812 2,404 4,820
Inter-segment sales (1,471) (1,217) (2,894) (2,433) (4,917)
Total 39,233 30,435 79,247 59,465 125,062
Segmental Adjusted EBITDA
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Genetics 2,428 2,108 5,691 5,987 11,528
Advanced Nutrition 7,154 5,247 11,474 6,240 13,802
Health (454) (1,446) 93 (2,563) (2,685)
Corporate (703) (1,015) (1,408) (1,740) (3,196)
Total 8,425 4,894 15,850 7,924 19,449
Reconciliations of segmental information to IFRS measures
Reconciliation of Reportable Segments Adjusted EBITDA to Loss before
taxation
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Total reportable segment Adjusted EBITDA 9,128 5,909 17,258 9,664 22,645
Corporate Adjusted EBITDA (703) (1,015) (1,408) (1,740) (3,196)
Adjusted EBITDA 8,425 4,894 15,850 7,924 19,449
Exceptional - restructuring, disposal and acquisition related items 908 (275) 908 (868) (184)
Depreciation and impairment (5,557) (1,723) (10,052) (3,494) (8,359)
Amortisation and impairment (4,484) (4,260) (8,872) (8,178) (16,283)
Net finance costs (754) (1,374) (2,978) 1,363 (3,802)
Loss before taxation (1,462) (2,738) (5,144) (3,253) (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 March 2022 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 9,872 22,945 2,594 - - 35,411
Provision of services 1,500 - 2,322 - - 3,822
Inter-segment sales 36 29 - 1,406 (1,471) -
11,408 22,974 4,916 1,406 (1,471) 39,233
3 months ended 31 March 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 8,542 19,883 1,039 - - 29,464
Provision of services 966 - 5 - - 971
Inter-segment sales 6 12 - 1,199 (1,217) -
9,514 19,895 1,044 1,199 (1,217) 30,435
6 months ended 31 March 2022 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 24,381 41,993 5,845 - - 72,219
Provision of services 2,180 - 4,848 - - 7,028
Inter-segment sales 42 40 - 2,812 (2,894) -
26,603 42,033 10,693 2,812 (2,894) 79,247
6 months ended 31 March 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Sale of goods 20,031 35,010 2,317 - - 57,358
Provision of services 2,087 - 20 - - 2,107
Inter-segment sales 12 17 - 2,404 (2,433) -
22,130 35,027 2,337 2,404 (2,433) 59,465
4. Revenue (continued)
Sale of goods and provision of services (continued)
Primary geographical markets
12 months ended 30 September 2021 (audited)
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
3 months ended 31 March 2022 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 6,115 211 4,288 - - 10,614
India 260 3,711 - - - 3,971
Singapore - 3,013 - - - 3,013
Greece - 1,832 - - - 1,832
Faroe Islands 1,709 5 147 - - 1,861
Turkey - 2,238 - - - 2,238
UK 899 14 30 - - 943
Ecuador - 1,227 - - - 1,227
Chile 224 5 150 - - 379
Rest of Europe 1,590 1,278 - - - 2,868
Rest of World 575 9,411 301 - - 10,287
Inter-segment sales 36 29 - 1,406 (1,471) -
11,408 22,974 4,916 1,406 (1,471) 39,233
3 months ended 31 March 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 4,553 191 272 - - 5,016
India - 3,041 - - - 3,041
Singapore - 2,409 - - - 2,409
Greece 25 1,642 - - - 1,667
Faroe Islands 1,563 5 - - - 1,568
Turkey - 1,702 - - - 1,702
UK 1,226 40 (220) - - 1,046
Ecuador - 1,041 - - - 1,041
Chile 31 4 598 - - 633
Rest of Europe 1,590 1,362 24 - - 2,976
Rest of World 520 8,446 370 - - 9,336
Inter-segment sales 6 12 - 1,199 (1,217) -
9,514 19,895 1,044 1,199 (1,217) 30,435
4. Revenue (continued)
Primary geographical markets (continued)
6 months ended 31 March 2022 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 15,794 323 8,956 - - 25,073
India 400 7,719 - - - 8,119
Singapore - 4,151 - - - 4,151
Greece - 3,471 - - - 3,471
Faroe Islands 2,601 6 277 - - 2,884
Turkey - 3,932 - - - 3,932
UK 2,856 28 118 - - 3,002
Ecuador - 2,291 - - - 2,291
Chile 340 5 553 - - 898
Rest of Europe 3,361 2,581 - - - 5,942
Rest of World 1,209 17,486 789 - - 19,484
Inter-segment sales 42 40 - 2,812 (2,894) -
26,603 42,033 10,693 2,812 (2,894) 79,247
6 months ended 31 March 2021 (unaudited)
All figures in £000's Genetics Advanced Nutrition Health Corporate Inter-segment sales Total
Norway 12,263 257 435 - - 12,955
India - 6,267 - - - 6,267
Singapore - 3,350 - - - 3,350
Greece 25 3,472 - - - 3,497
Faroe Islands 3,371 9 - - - 3,380
Turkey - 3,445 - - - 3,445
UK 2,656 66 15 - - 2,737
Ecuador - 2,000 - - - 2,000
Chile 37 4 1,435 - - 1,476
Rest of Europe 2,750 2,800 26 - - 5,576
Rest of World 1,016 13,340 426 - - 14,782
Inter-segment sales 12 17 - 2,404 (2,433) -
22,130 35,027 2,337 2,404 (2,433) 59,465
4. Revenue (continued)
Primary geographical markets (continued)
12 months ended 30 September 2021 (audited)
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
Singapore - 7,544 - - - 7,544
Greece 25 6,108 - - - 6,133
Faroe Islands 5,636 18 348 - - 6,002
Turkey - 5,977 - - - 5,977
UK 3,843 117 622 - - 4,582
Ecuador - 4,066 - - - 4,066
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 Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Acquisition related items - - - - (850)
Exceptional restructuring and disposal items (908) 275 (908) 868 1,034
Total exceptional items (908) 275 (908) 868 184
Exceptional restructuring and disposal items in Q2 2022 is a credit of
£909,000 (YTD Q2 2022: £909,000) relating to an increase in the fair value
of contingent consideration to be received following the disposal of Improve
International Limited and its subsidiaries on 23 June 2020.
6. Taxation
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Analysis of charge in period
Current tax:
Current income tax expense on profits for the period 2,642 875 5,007 1,631 5,383
Adjustment in respect of prior periods - - - - 502
Total current tax charge 2,642 875 5,007 1,631 5,885
Deferred tax:
Origination and reversal of temporary differences (453) (506) (1,391) (1,552) (3,228)
Deferred tax movements in respect of prior periods - (265) - (265) (260)
Total deferred tax credit (453) (771) (1,391) (1,817) (3,488)
Total tax charge/(credit) 2,189 104 3,616 (186) 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.
Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Loss attributable to equity holders of the parent (£000) (3,775) (3,101) (9,132) (3,818) (12,891)
Weighted average number of shares in issue (thousands) 703,926 669,425 692,474 668,667 669,459
Basic loss per share (pence) (0.54) (0.46) (1.32) (0.57) (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 March 2022, a total of 5,184,054 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 March
2021: 3,581,820). 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 March 2022 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 184,694 - 73
Balance at 31 March 2022 703,960,798 704 420,824
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 March 2022, the Group issued a total of 184,694
ordinary shares of 0.1 pence each to certain employees of the Group relating
to share options, of which 12,509 were exercised at a price of 0.1 pence and
172,185 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 Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Revenue 39,233 30,435 79,247 59,465 125,062
Cost of sales (19,210) (14,263) (39,725) (28,622) (59,477)
Gross profit 20,023 16,172 39,522 30,843 65,585
Research and development costs (1,590) (1,837) (3,237) (3,582) (7,010)
Other operating costs (9,984) (9,411) (19,907) (18,696) (38,221)
Depreciation and impairment (5,557) (1,723) (10,052) (3,494) (8,359)
Amortisation of capitalised development costs (448) - (896) - (299)
Share of loss of equity accounted investees net of tax (24) (30) (528) (641) (905)
Adjusted operating profit 2,420 3,171 4,902 4,430 10,791
Exceptional - restructuring, disposal and acquisition related items 908 (275) 908 (868) (184)
Amortisation and impairment of intangible assets excluding development costs (4,036) (4,260) (7,976) (8,178) (15,984)
Operating loss (708) (1,364) (2,166) (4,616) (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 Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Loss before taxation (1,462) (2,738) (5,144) (3,253) (9,179)
Exceptional - restructuring, disposal and acquisition related items (908) 275 (908) 868 184
Amortisation and impairment of intangible assets excluding development costs 4,036 4,260 7,976 8,178 15,984
Adjusted profit before tax 1,666 1,797 1,924 5,793 6,989
Other Metrics
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Total R&D Investment
Research and development costs 1,590 1,837 3,237 3,582 7,010
Internal capitalised development costs 777 1,121 1,404 2,181 4,813
Total R&D investment 2,367 2,958 4,641 5,763 11,823
All figures in £000's Q2 2022 Q2 2021 YTD Q2 2022 YTD Q2 2021 FY 2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Adjusted EBITDA excluding fair value movement in biological assets
Adjusted EBITDA 8,425 4,894 15,850 7,924 19,449
Exclude fair value movement (1,101) (682) (1,005) (1,958) (3,323)
Adjusted EBITDA excluding fair value movement in biological assets 7,324 4,212 14,845 5,966 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 March 2022
All figures in £000's (unaudited)
Cash and cash equivalents 46,294
Undrawn bank facility 11,405
57,699
11. Net debt
Net debt is cash and cash equivalents less loans and borrowings.
31 March 2022 31 March 2021 30 September 2021
All figures in £000's (unaudited) (unaudited) (audited)
Cash and cash equivalents 46,294 53,630 39,460
Loans and borrowings (excluding lease liabilities) - current (1,647) (1,517) (1,612)
Loans and borrowings (excluding lease liabilities) - non-current (95,270) (94,639) (94,792)
Net debt excluding lease liabilities (50,623) (42,526) (56,944)
Lease liabilities - current (11,899) (5,762) (9,042)
Lease liabilities - non-current (18,915) (8,228) (14,945)
Net debt (81,437) (56,516) (80,931)
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