Investor-backed to support LT growth
​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.
The company has been active recently: following a 10-yr strategic agreement with the Lerøy Group in July, BMK then announced new JVs with Salten Stamfisk for a land & sea production unit in Norway, producing 150m salmon ova p.a. and with an (undisclosed) major salmon producer to provide breeding & Gx services. The acquisition of Ceniacua (of Columbia) adds Shrimp Gx expertise to its Salmon and Tilapia platform.
A £31m placing in August allows the company to continue executing its expansion strategy through these new ventures and earmarks additional financial support to strengthen R&D activities and general working capital.
There was a cautious tone to a trading update in October, but the long term vision is clear. Highlights included good news on INVE integration, but headwinds still affecting SE Asia and Latin America activities, with a wider spread of acquaculture disease and lower harvests (e.g. for shrimp).
BMK’s attraction is underlined by its unique business model and above average growth, with forecast CAGR ('16-'21) in revenues and adjusted PBT of 25% and 60%, respectively. We have adjusted our FY17 and FY18 forecasts and the updated DCF calculation supports an upgraded value of 110p/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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