Profitability dips at listed biotech firm

AIM-listed biotech firm Benchmark Holdings has reported increased revenues in a six-month period where its profitability suffered as it focused on delivering a higher value product mix.

The Sheffield-based aquaculture health, nutrition and genetics business this morning published its six-month results to 31 March 2019. Its revenues rose 3%, from £75.7m to £78.3m. But its adjusted pre-tax profits fell 80% from £3.6m last year to £700,000 this year. 

The firm added that its adjusted EBITDA increased by 25% to £7.5m (H1 2018: £6m), which it said reflected the contribution of higher value products, an increase in the value of biological assets as a result of growing sales and increasing capacity in Norway. It said it had also achieved cost control.

During the period, the firm made an R&D investment of £8.5m (10.9% of sales). Its net debt was £65.5m, which includes £26m ringfenced non-recourse debt to fund its Salten salmon egg facility in Norway.

Benchmark said it continued to make progress towards the commercialisation of key products. It said that the regulatory process was on track for the market launch of its next generation sea lice treatment.

Its work in Asia on disease resistant shrimp “continued to show good results for survivability, yield and consistency, demonstrating their commercial potential.” Production of its broodstock for export commenced at a new facility in Florida.

Benchmark has streamlined its Advanced Nutrition production facilities in Asia, resulting in the sale of one site and also closed a lumpfish operation site.
Progress in developing alternatives for the commercialisation of companion animal products

Malcolm Pye, Chief Executive, said:“We have delivered growth in Adjusted EBITDA and made progress against our strategic priorities despite challenging conditions in the shrimp markets. We continue to implement operational and structural efficiency initiatives and we expect the Group to deliver broadly in line with market expectations for the full year.

“We are starting to see benefits from the investments we have made into a number of areas including our new facility in Salten, Norway. These investments, combined with the successful completion of our refinancing, leaves us well placed to deliver on our five year strategy to drive future growth and profitability.”

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