Disappointing first half results for listed biotech company

Sheffield-based aquaculture health, nutrition and genetics business, Benchmark, has reported revenue from continuing operations of £57m for the first half of 2020, down 15% from 2019.

The business, which has published its second quarter and interim results for the six months ended 31 March 2020, says the fall is partly down to weakness in the shrimp markets.

Over the same period, the Group’s operating loss was £9.3m (H1 2019: loss of £4.2m). Loss before taxation was £18.9m (H1 2019: £6.2m).

The firm’s report explains: “The company began to experience the impact from Covid-19 in the Advanced Nutrition business in Asia towards the end of the period.

“In addition to the fall in demand for shrimp, which drove down the shrimp price and resulted in reduced production, curfews and regional quarantines in major producing countries affected production volumes.

“At the same time, the sector experienced transportation lockdowns across the supply chain from hatchery to nursery, grow-out and end markets which increased economic pressure across the value chain, impacting farm gate prices and stocking decisions.”

Benchmark says it has completed four disposals raising a total of £2.4m and expects to generate £27m to £30m from planned disposals which are underway.

It has also initiated a review of its vaccines strategy to help realise value from its technology and assets.

The business says it aims to deliver a minimum of £10m in annual savings from its restructuring and cost savings plan.

Peter George, executive chairman, said: “Our results for the first half of the year were disappointing reflecting the weakness in the shrimp markets and oversupply of Artemia, and the additional challenges of Covid-19 in the latter part of the period.

“Our salmon business has been more robust in the face of the global lockdown with good visibility, and this, together with a solid cash position after our fundraising in February and our cash conservation plan, gives us confidence in managing Benchmark through this crisis.

Our priority continues to be on completing the restructuring of the Group to focus on our core aquaculture disciplines, reducing our cost base, increasing efficiency and transitioning from R&D investment into profitability.

“Longer term the fundamentals of our business are very attractive with an increasing need for products and solutions that enable sustainable food production.”