Benchmark Holdings Plc (Buy, TP: NOK7.00) - Q1 miss, and strategic review
Q1 EBITDA (excluding funding valuation adjustments (FVA) and one-offs of GBP7.5m) missed our estimate and consensus by 28–29%, largely explained by Health, as customers cancelled orders due to biological challenges. The company is looking to transition to a new Health business model, and as a result, has now decommissioned a CleanTreat system. Management announced a strategic review on 22 January that will include exploring a full or partial sale of the company. However, we reiterate our BUY and NOK7 target price on our view that the stock is undervalued.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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