Biotech firm sees revenues rise 28% in year of organic growth

AIM-listed biotech firm Benchmark Holdings has reported a strong financial year of organic growth, with revenues up 28% to £140m from £109m in 2016.

The Sheffield-based aquaculture health, nutrition and genetics business this morning announced its preliminary results for the year ended 30 September 2017. EBITDA stood at £10m; a rise from £9.2m in 2016. The firm’s losses also reduced by 61%, from £18m in 2016 to £7m in 2017. Net debt rose to £23m; which was due to investment in production facilities and £15.2m in research and development.

Mark Plampin, finance director at Benchmark, said the firm was also preparing for further growth over the next three years. Of the 2017 results, he said: “The 28% top-line growth is completely organic growth. The growth there is driven by genetics and the advanced nutrition division, which grew by 21%. Both are enjoying higher market share and good gross margins. We anticipate future growth of revenues around 10-15% and that will be orgnanic growth.”

During the year, the firm made a £21.5m investment in state-of-the-art production capacity in genetics and animal health in Norway. The production facility will open later this year, employing around 25 people and increasing capacity of salmon egg production up to 150m eggs when fully operational. 

Malcolm Pye, chief executive, said that the market was extremely good and a focus on healthy eating ,diets and nutrition was driving good results. He said: “Not being able to catch natural fish for the fish-based proteins means that there has been a growth in farmed production and that is a trend we will continue to see. 

“Primarily we are a tech business, we provide technical solutions; that means that we expect to grow as fast or faster than the marketplace. We are operating in a very healthy marketplace. The UK’s academic environment is also strong and we work closely with a lot of universities to benefit from that.”

The firm also opened a manufacturing facility in Essex in September. Pye said the firm’s significant investments meant that they could service customer needs even better because there was further security of supply and the costs of its production base would lower. He said Norway was a key market for Salmon egg production and the new facility there would be bio-secure and allow production to take place throughout the year, including outside of the natural spawning period.

Benchmark has also invested in new technology in its shrimp market. The new products created from this innovative piece of work will this year be trialled trial around the world.   Pye said more innovations had been created in the vaccines division and a product which “is an exciting development for the industry” is set to launch this year.

He added:  “2017 has been a year of significant operational and strategic progress for Benchmark Holdings. Despite certain challenges, we have continued our focussed investment in the development of the Group’s pipeline and have put in place important technological, infrastructure and organisational building blocks.  Benchmark is now one of the leading global providers of advanced nutrition, genetics and animal health in the industry.

The organic growth delivered in the year and the  achievement of significant milestones, together with the increased activity in many of our key markets at the end of the year leaves us full of confidence going into the new financial year.  The continued growing global demand for aquaculture products, the disease challenges faced, and pressure to limit the use of antibiotics, puts the group in a strong position to drive growth for many years to come.” 

The firm said the fundamental drivers remained favourable and outlook for the core species was positive, with salmon production growing and shrimp production recovering.

The firm’s Advanced Nutrition division saw like for like  revenues grow by 21% over the previous year, driven by continued signs of recovery in key shrimp markets and increased market share driven by demand for higher margin live feed replacement and health diets.

The division also secured a new 10 year sales and marketing agreement for high quality live feed (artemia). 

Its gentics division reported a 47% sales growth, driven by an increased demand for salmon eggs with sales up in every major market and strong growth in recently launched products.

However, sales in Animal Health decreased from £24.8m to £15.1m as a result of drop in sales of Salmosan. Benchmark said the outlook had improved in first months of 2018, partly due to a switch to direct distribution in Chile.

 

 

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