Benchmark helps deliver improved healthcare products and welfare services to the global aquaculture and livestock industries. Rising demand from clients for its products and services to manage sustainability practice and performance underlines BMK's opportunity for significant organic and external growth.
EMA safety nod for game-changer BMK08
Benchmark has received a notification of positive safety opinion from the European Medicines Agency regarding BMK08, the Company’s revolutionary sea lice treatment, used in combination with the CleanTreat® purification system. This is a significant milestone and means that in the opinion of the EMA, the treatment is safe for consumers after extensive testing showing its compliance with the maximum residue limits (MRL).
The positive opinion paves the way for achieving regulatory clearance from the EU and is a condition of Marketing Approval for the novel treatment in the initial target market of Norway. The anticipated launch of CleanTreat® + BMK08 is therefore well on track for Q2 2021 (calendar year).Download Now Missing Out Get our research first
Bolstering liquidity, focusing on aquaculture
Benchmark is delivering on its strategic aims, having largely completed its disposals program of non-core or unprofitable operations and sharpening the focus on its core, aquaculture. The disposals will raise up to £44m, reinforcing the Company’s financial position to weather uncertainties related to the pandemic, to invest selectively in its core business and to enable liquidity to remain well within the covenant terms of its NOK bond loan. Actions taken have been as the new management team had promised. The launch of CleanTreat® + BMK08, a novel medicinal treatment to combat sea lice, is set to be transformational for the Group and is on track for Q2 2021 (calendar year).
The Group is well positioned financially. Proforma net debt stood at £36m (including disposals completed post period end) providing ample headroom to meet its NOK bond-lending covenant terms and allowing focus on the launch of CleanTreat® / BMK08, plus selective investment in its core business areas. The Company is well advanced in the delivery of a cost savings program targeting £10m pa including savings associated with the disposal of its vaccine facility completed in July. With FY20 on track to meet expectations, our forecasts and fair value of 63p / share are unchanged. We have made minor adjustments to our FY21 forecasts pending Company guidance at year end.Download Now Missing Out Get our research first
Streamlined for growth and efficiency
H1 2020 trading in Benchmark’s Genetics division was resilient in face of challenges posed by the pandemic, while in Advanced Nutrition recent difficulties were compounded by the shrimp sector’s exposure to the food service industry.
The ongoing restructuring and cost containment program, targeting £10m+ of annual savings, are being enacted under the guidance of a newly appointed aquaculture specialist as CEO.
Factoring in disposals and efficiencies, our new forecasts indicate liquidity remains well within its NOK bond-lending covenant terms. A key near term focus includes preparation for launch of BMK’s innovative sea lice treatment of CleanTreat® + BMK08, providing game-changing revenue prospects.
Our DCF valuation of BMK is £421m or 63 pence per share, using an 11% discount rate and 2.5% long-term growth - factoring in average Group revenue growth of 20% per annum 2021-25.Download Now Missing Out Get our research first
Interim Results Presentation
Peter George, Executive Chairman, Septima Maguire, CFO, and incoming CEO, Trond Williksen, present their Interim Results for the half year to the 31st March 2020, their focus on delivering true cash profitability across the group, and the progress they have made so far with their restructuring.