Benchmark Holdings Plc (Buy, TP: NOK7.00) - Improved cash flow
Q4 EBITDA (excluding fair value adjustments and one-offs) was GBP9.2m versus our estimate of GBP7.6m and consensus of GBP7.2m, driven by strong results in Genetics and Advanced Nutrition, while Health failed to report positive EBITDA, as the de-licing season started a quarter later than normal. Free cash flow to the firm was positive in 2023, marking a significant improvement versus 2019–2022. We reiterate our BUY and NOK7 target price, but have reduced our 2024–2025e EPS due to a slower ramp-up in Health and higher interest costs.Benchmark Holdings is principally engaged in the provision of technical services, products and knowledge that support the development of sustainable food and farming industries. Co.'s reportable segments include: Animal Health Division, which provides veterinary services, environmental services diagnostics and animal health products to aquaculture, and manufactures licenced veterinary vaccines and vaccine components; Genetics Division, which harnesses salmon breeding technologies combined with production facilities to provide a range of high genetic merit ova; and Advanced Animal Nutrition, which manufactures and provides nutrition and health products to the aquaculture industry.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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