CMD showcases expertise and strategy
Benchmark (BMK) helps deliver improved healthcare products and services to the Animal Health and Aquaculture industry. Rising demand from clients for its products and services to manage sustainability practice in worldwide production and supply chains underlines BMK’s opportunity for significant organic and external growth.The company held a well-attended Capital Markets Day (CMD) on 27 March, which highlighted its strategic targets for fulfilling its growth potential spanning Advanced Nutrition, Genetics and Animal Health.
Strong underlying dynamics include the ongoing recovery of supply in salmon markets following disease challenges, with higher pricing trends supported by strong demand and with signs of shrimp production entering a new growth phase. We have consistently said that BMK holds a unique position within aquaculture markets and that its strategic aims are set to translate into upward momentum in revenue and margin.
We reiterate our sales and adjusted EBITDA forecasts across the group for 15.6% revenue growth to £162m in FY18, rising to £200.9m by FY20, equivalent to a CAGR of 13% over the forecast period. We project that adjusted EBITDA will rise over 50% from £10m up to £15.2m in FY18, and reaching £24.6m in FY20, equivalent to a 12% margin.
Product mix and direct selling capabilities are estimated to be key drivers of margin expansion in Advanced Nutrition, with pricing growth and new species additive factors in Genetics. Animal Health drivers include product launches of higher margin products, starting with Ectosan – CleanTreat, which should drive the longer term break-even status of the division.
BMK appears very well positioned given its diversified approach to meet strong underlying demand growth for farmed seafood, whilst benefitting from synergies across the Group. Our DCF is supported by undemanding multiples falling sharply over the forecast period. Rolling forwards our model, the DCF value remains at £521m, or 99.8p per share.
Animalcare Group is a supplier of generic veterinary medicines and animal identification products to companion animal veterinary markets. Co. develops and sells goods and services to veterinary professionals principally for use in companion animals; operating directly in the United Kingdom and through distribution and development partners in key markets in Western Europe. Co.'s principal product lines are licensed veterinary medicines and companion animal identification products and services. Co. distributes its products to Veterinary Surgeons, Veterinary Nurses and Practitioners.
Anpario is engaged in the production and distribution of natural feed additives for animal health, hygiene and nutrition. Co.'s portfolio of products is divided into four categories, Eubiotics, Feed Security, Feed Quality and Nutritional.
Bayer is a life sciences group based in Germany. Co.'s operations are organized along three divisions: Pharmaceuticals (engaged in prescription pharmaceuticals for cardiology and women's healthcare); Consumer Health (engaged in non-prescription products in dermatology, dietary supplement, analgesic, gastrointestinal, allergy, cold and flu, foot care, sun protection and cardiovascular risk prevention categories); and CropScience (engaged in the development of seeds and plant traits; crop protection; and for gardens, the green industry and non-agricultural pest control). Co. also maintains an Animal Health business unit engaged in the development of products for farm and companion animals.
Co. is engaged in the manufacture, sale, and export of the following products: herbicides and fungicides; insect control sprays and related devices; rubber and plastic goods; health care related medications for humans and animals; diagnostic equipment sales and installation; and organic chemicals such as dyes, dyes intermediaries, and flavor additives.
Bayer is engaged in the representation and sale of chemicals used in manufacturing and bulk consumption. Items include household insecticides; representation of perfumes, fragrances and flavors, film and photograph paper, as well as pharmaceutical products for use in agriculture, veterinary and environmental sanitation; pigments and auxiliary products.
Charles River Laboratories International is a contract research organization. The company has a laboratory animal medicine and science to develop a portfolio of discovery and safety assessment services. The company's segments are: Research Models and Services, which supplies research models to the drug development industry; Discovery and Safety Assessment (DSA), which provides DSA services, including in vitro and in vivo studies, laboratory support services, and strategic non-clinical consulting and program management to support product development; and Manufacturing Support, which ensures the production and release of products manufactured by the company's clients.
hVIVO is a holding company. Co. is a specialty biopharma company focusing on a human-based analytical platform to accelerate drug discovery and development in respiratory and infectious diseases. Utilizing human disease models in flu, respiratory syncytial virus and asthma exacerbation, Co.'s platform captures disease in motion, illuminating the entire disease life cycle from healthy to sick and back to health. Co.'s operational activities are carried out through its subsidiary, hVIVO Services Limited. Co. carries out its main activities from the U.K. Co. also conducts sales activity in the U.S. and in Europe through its subsidiaries, hVIVO Inc and hVIVO Services Limited respectively.
Vernalis is a holding company. Through its subsidiaries, Co. is a commercial stage pharmaceutical company focused on drug development. Co. has three marketed products: Tuzistra® XR, in the U.S. prescription cough cold market; Moxatag®, the only once-daily amoxicillin approved in the U.S. for tonsillitis and pharyngitis; and frovatriptan, an acute treatment for migraine. In addition, Co.'s nine programs in its new chemical entity development pipeline are: V158866 for central nervous system indications; CP1-444 and V2006 for immuno-oncology indications; AUY922, Tosedostat, Bcl-2, Mcl-1, and V158411 for cancer indications; and RPL554 for chronic obstructive pulmonary disease indications.
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