Benchmark Holdings Plc (Buy, TP: NOK7.00) - Safeguarding cash flow
Benchmark Holdings missed on the Q3 top line, but beat our forecast on EBITDA, driven by a higher margin from genetics. Health remains in a restructuring mode, but cut costs faster than we expected, reaching break-even EBITDA in Q3. The advanced nutrition end-market is guided to remain soft. The sales process is ongoing, with no firm guidance on the timeline. Despite cuts to near-term earnings estimates, we reiterate our BUY and NOK7 target price as we believe long-term value would be realised thorough a potential sale.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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