Benchmark confident after reporting year of decent growth

Aquaculture biotechnology company Benchmark reported a 7% increase in revenue from continuing operations in its full-year results on Wednesday, to £169.5m.

The AIM-traded firm said its advanced nutrition segment performed strongly in challenging shrimp markets, further solidifying its leading market position.

However, revenues in the segment experienced a slight decrease of 2%, or 7% at constant exchange rates.

Benchmark said its genetics segment showed a robust performance, with record salmon egg sales in its facilities in Iceland, Norway, and Chile.

That resulted in revenue growth of 14%, or 20% at constant currency.

The health segment also displayed positive results, with growing adoption of the sea lice solution Ectosan Vet and CleanTreat and increased sales of Salmosan Vet.

Benchmark said the health segment achieved solid revenue growth of 27%, or 29% at constant exchange rates.

Adjusted EBITDA rose 15% year-on-year from continuing operations to £35.6m, driven by higher revenues and effective cost control.

The adjusted EBITDA margin from continuing operations, excluding fair value movements from biological assets, increased to 21% compared to 20% in the prior year.

Significant progress towards profitability was made, with a 36% increase in adjusted operating profit from continuing operations to £14.6m.

The loss before tax from continuing operations narrowed to £12.7m from £21.4m year-on-year, attributed to positive trading results and lower finance costs, partly offset by higher exceptional items.

Cash generation saw a significant improvement, with operational cash flow nearly doubling to £20m from £10.8m, while cash conversion increased to 58% from 35%.

Benchmark reduced its net debt to £65.5m from £73.7m in the prior year.

The company reported cash and cash equivalents of £35.6m and available liquidity of £48.8m at year-end on 30 September.

As of 27 November, Benchmark had cash and cash equivalents of £29.3m and available liquidity of £41.5m.

Looking ahead, Benchmark said its current trading was positive, with the business maintaining momentum in line with management expectations.

It said it had good visibility of revenues in salmon genetics, early indications of improvement in the shrimp markets, and an increase in sea lice treatments since the end of the last financial year, with good capacity utilisation of CleanTreat.

The company was expecting normal seasonality in its operations.

“We delivered good growth in revenue and adjusted EBITDA, and increased cash conversion, despite challenging conditions in the global shrimp markets,” said chief executive officer Trond Williksen.

“This demonstrates the strength of our business and the agility of our organisation to adapt - mitigating the impact of a soft market and taking advantage of commercial opportunities to further consolidate our leading market position.

“The new financial year has also started well and in line with our expectations, with positive momentum in our three business areas.”

Williksen said that since the end of the 2020 financial year, when the group restructuring was completed, Benchmark had been building a track record of growth and improved profitability, reflected by revenues and adjusted EBITDA from continuing operations, which had increased over the period by 61% and 128%, respectively.

“Benchmark is uniquely positioned in an industry that is structurally growing, supported by attractive megatrends.

“With a clear strategy and an integrated commercial network covering the main aquaculture species, we have a significant opportunity to deliver growth and shareholder returns.

“We will continue the execution of our strategy to realise the value inherent in our business for the benefit of all our stakeholders.”

At 1045 GMT, shares in Benchmark Holdings were down 0.97% at 34.86p.

Reporting by Josh White for Sharecast.com.