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Benchmark braced for crucial 18 months

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The next 18 months are expected to be key for Benchmark Holdings as the group hopes that its wide portfolio of investments will finally begin to generate returns for its investors.

by Senior editor, The Fish Site
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The group’s report on the year ended 30 September 2018, which was issued today, shows a number of positives but also warns of the need “to keep the support of the investment community” if they are to achieve their long term mission to “drive improvements in sustainability in the food chain that lead to beneficial outcomes for our customers through improvements in yield, quality, health and welfare”.

The opening of Benchmark's new salmon egg production site in Salten has increased the group's ova production capacity by 75 per cent

Operation highlights in the quarter include successful field trials of the group’s sea lice treatment with three of the world's largest salmon producers, which showed 99 per cent efficacy, excellent fish welfare and no environmental impact; the launch of six new products – two in genetics and four in advanced nutrition; successful trials of disease-resistant shrimp in Thailand, Vietnam and China; good performance in large scale trials of sea bass/bream vaccines; the start of production at the group’s new land-based salmon egg facility in Norway, which has increased their ova capacity by per cent; and a joint venture with AquaChile to penetrate world's second largest salmon market.

According to Malcolm Pye, CEO of Benchmark: "2018 was a successful year for Benchmark. The group achieved good growth in revenues and underlying earnings, and made substantial progress in implementing its strategy. Particular highlights in the year included the successful commercial scale trials for our next generation sea lice treatment, the opening of our state of the art salmon egg facility in Norway, and the successful trials for our disease resistant shrimp in three Asian markets.

"The growth drivers for our business remain strong, with the increasing need for solutions that improve productivity in the growing aquaculture sector to support sustainable food production meaning that the areas of the market we address are growing considerably faster than the overall aquaculture market.

"The group has started the current financial year trading ahead of the same period last year, and is trading in line with expectations for the full year. Trading has commenced strongly in genetics, with high demand for our disease and sea lice resistant salmon eggs. Our advanced nutrition business in shrimp has started relatively slowly due to temporary volatility in the global shrimp market, but the outlook from spring onwards is positive. In animal health, we are planning to extend trials of our next generation sea lice treatment into new markets in 2019 and we are making substantial progress towards establishing a partnership for our companion animal products.

"Over the next 18 months we expect to see our investment in a number of areas, such as our next generation sea lice treatment, our disease resistant shrimp, new aquaculture vaccines and probiotics, together with our new facility in Norway, starting to deliver, resulting in high growth in revenues, attractive margins and cash generation, which will increase our financial flexibility and deliver attractive shareholder returns."

Many of the year’s figures were positive, with revenue increasing by 13 per cent in constant currency to £151.5m; gross margin for the group increasing to 49% (2017: 45%); adjusted EBITDA up 68% to £17 million, including a 36% increase in the group’s genetics division and a 22% increase in their advanced nutrition division.

On the other hand, following R&D investments of £19.4 million, the group’s net debt increased to £55.7 million (2017: £23.9m), while shares again dipped in value.