Feeding sustainable growth ambitions
​Benchmark (BMK) helps deliver improved healthcare products and services to the Animal Health and Aquaculture industry.
Headline results for the year to Sept 2015 were reassuring after regaining an upper hand in tussles with Salmosan generics, plus stronger than expected H2 results from Animal Health and Technical Publishing divisions.
Of much greater significance going forward was was the post-period reverse takeover of INVE: a strategic coup to diversify revenue streams and reduce dependence on Salmosan sales. BMK's clear 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.
Adding INVE transforms BMK into more than a profitable company: aquaculture activities should generate >70% and >65% of revenues and GP, respectively. This new leading aquaculture company boasts integrated activities from 'seed to feed' across a number of species and extensive diagnostic, health product and consulting services.
We revise our Group forecasts to include the INVE acquisition, FY2015 results and the divisional trading outlook. Forecast Group revenues in FY2016 and FY2017 are now £117m and £162m (previously £68m, £83m). Trading EBITDA forecasts are £24m and £37m (from £11m and £16m).
BMK is a unique business with no obvious comparators, but a highly related and hugely significant recent news item is ChemChina's massive $43bn agreed bid for Syngenta. Clear evidence of a developing global story on efforts to improve food security for a growing world population.
After a review of our earnings model we maintain our fair value of 130 pence/ share.
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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