Solid progress on strategic milestones
​Benchmark 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.
Headline figures in recent interim results offer a robust scorecard for the Group and a clear indication of strong growth for the underlying businesses, ex-acquisitions. Despite a number of separate headwinds for Animal Health businesses, EBITDA from Trading activities grew to £9.5m (from £1.2m, H1 2015), demonstrating the initial operational synergies that the recent INVE acquisition should provide in the longer term.
Adding INVE was a strategic stroke of genius - this profitable business helps diversify revenue streams and reduce dependence on Salmosan. BMK's focus on aquaculture and continuing core investment activities to support R&D, vaccine manufacturing and its product pipeline underlines an exciting and sustainable growth story.
Group revenues increased to £48m (+142%). Animal Health and Advanced Animal Nutrition divisions were notable for their positive contribution in the period. Salmosan/Byelice sales helped a notable improvement in the fortunes of Animal Health in the face of a number of business headwinds.
New products and R&D investment are the long term plan to create value. BMK has, probably, aquaculture's strongest new product/ technology pipeline - 85 products (from 61) across addressable markets valued up to £742m (was £646m).
BMK is unique with no obvious comparators. We have reviewed our forecasts, principally adjusting FY17 and FY18 to take account of El Nino headwinds and potential knock-on effects in aquaculture production trends and product demand. Our updated DCF supports a fair value of 95 p/share, reduced, but still well above current levels.
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