Sustainability and profitability
Benchmark helps deliver improved healthcare products and services to the Animal Health and Aquaculture industry and has just reported a confident message on FY18 trading to the end of September 2018.They updated that adjusted EBITDA earnings for the period would be ahead of our estimates due to the higher margin mix of revenues from Advanced Nutrition. Headline financials for the period included c. 7% revenue growth vs FY17 to over £150m and adjusted EBITDA of over £16.5m, up 65% compared to FY17.
The outlook is positive across the Group and with strategic progress on key projects positioning Benchmark for sustained earnings growth driven by increasing recognition of the value of specialist aquaculture products.
FY18 saw improved profitability in Advanced Nutrition where earnings growth has been driven by sales of premium specialist diets, as opposed to lower margin live feed. In Genetics, the investment in developing disease-resistant salmon eggs paid off with high client demand that exceeded supply, together with market expansion. The Health Division made excellent progress towards the full commercial launch of Ectosan + Cleantreat, BMK’s revolutionary sea lice treatment. We are encouraged by both the number of successful trials, accelerating progress ahead of full commercial launch, as well as confirmation of strong outcomes, with 100% efficacy and no environmental impact.
The guidance on adjusted EBITDA being over £16.5m is higher than our forecast of £16.4m. Continuing this trend into FY19 takes our revenue forecast down to £174m (previously £183m), but again more than offset by an improving sales mix which we estimate will translate into an upgrade in FY19 adjusted EBITDA to £23.4m, 4.6% above our prior forecast of £22.4m.
Looking ahead, we expect news flow across the Group relating to the rollout of Ectosan + Cleantreat, plus further detail on the progress with the AquaChile JV.
Inputting new forecasts reflecting the improving earnings trajectory and the change in net debt gives an increased DCF valuation of £573m for Benchmark, versus £549m previously: this equates to 103p 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.