Seeking a Nordic capital injection
BMK reports good H119 performance: Group revenues increased 3.4% overall to £78.3m from £75.7m and with adjusted EBITDA growing ahead of sales, up 25% from £6m in H118 to £7.5m. Animal Health, Genetics and Knowledge Services’ performance was robust, driven by progress with the field trials of the next generation sea lice treatment as well as delivery on key milestones with the specific pathogen resistant (SPR) shrimp. Sales in these divisions helped to offset weaker than expected trading in Advanced Nutrition caused by oversupply and price weakness in the shrimp and sea bass markets.The proposed refinancing of the Group’s existing $90m credit facility via a NOK 850m ($95m) bond issue, underwritten by DNB Bank ASA, is a decision taken to increase financial headroom and provide greater flexibility for the Company’s growth strategy. As a reminder, growth initiatives include commercialisation plans for both the disease resistant, Specific Pathogen Resistant (SPR) shrimp (with initial launch planned by year end 2019) and the sea lice treatment (peak sales estimated >£45m) for 2020 launch. BMK is also progressing the development of its vaccine and probiotics pipeline.
A listed NOK financing would provide access to, and raise the Group’s visibility in, the world’s largest aquaculture market. Their overall financial position for the period to end March 2019 stood at net debt of £65m up from £55.7m (end 2018) illustrating sustained investment in both tangible and intangible assets. With key product launches in view as well as potential news on commercial deals for Animal Health products and further rationalisation of the business, the outlook remains largely buoyant, except for Nutrition where weaker markets could continue in H219.
In light of the recently announced discussions for the Chile JV, as well as news on the outcome of marketing the NOK Bond, we leave our financial forecasts unchanged ahead of greater visibility at the interim results on 25 June. We reiterate our DCF valuation of BMK of £585m - or 105p per 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.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.