Delivering on strategic and financial targets
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.BMK delivered a 9% reported increase in sales in H1’18 despite FX headwinds (up 17% at constant exchange rates) to £75.7m, together with a 91% increase in adjusted EBITDA. This was driven by strong performance in Genetics and Advanced Nutrition and a higher margin product mix in these divisions.
Post period end, BMK entered into an aquaculture breeding and genetics Joint Venture with Empresas AquaChile SA, the world’s sixth largest salmon producer. The JV is projected to be immediately earnings enhancing in our forecasts. It is also a sound strategic move that cements BMK’s presence in Chile, the second largest global producer of Atlantic salmon after Norway.
Our forecasts have increased our FY’18 revenue forecast by a net 0.1%, including an adjustment for the JV, from £162 to £162.2m. In FY’19 we increase our projected revenue by 1.2% from £181.8m to £183.9m (adding in JV revenue share).
The figures were well received by market and it was encouraging to see Director’s share purchases after their release. After raising our forecasts and adding in the JV earnings, then rolling forwards our DCF valuation, our new value increases to £549m (from £521m) or 98.5p per share (including the new placing shares).
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.
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