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27 June 2017

Interim Results 2017

Benchmark today announces its Interim Results for the six months ended 31 March 2017

Financial Highlights:

  • Revenue increased by 44% to £69.2m (H1 2016: £48.0m).  Like-for-like sales, excluding businesses acquired in 2016, increased 14% to £31.0m (H1 2016: £27.3m).
  • Adjusted EBITDA1 grew by 10% to £3.3m (H1 2016: £3.0m)
  • Reduced operating loss reflects:
    • full period impact from acquisition of INVE
    • a net credit of £1.9m (H1 2016: £12.1m expense) in exceptional and acquisition related expenditure resulting from a release of a provision for deferred consideration for an earlier acquisition,
    • offset by an increased charge for depreciation and amortisation of £11.8m (H1 2016: £6.1m) principally from the inclusion of INVE for a full six months.
  • Expensed R&D remained in line with the previous year at £6.4m (H1 2016: £6.0m) reflecting measured progress with, and prioritisation of, focused investment in the new product pipeline.
  • Construction continued on the combined land and sea based biosecure salmon production facility in Norway with £7.4m invested by Benchmark in the period. Completion expected 2019.

Operational highlights:

  • Progress made on key strategic investment objectives:
    • Long-term collaboration agreement signed with Salmar, one of the world’s leading salmon producers, to provide breeding and genetics services and products related to Atlantic salmon, including R&D services and production of salmon eggs.
    • Further opportunities for commercial collaboration in breeding and nutrition were advanced. Contract signed with Thailand’s largest tilapia producer, Manit Farms, to distribute INVE probiotic water quality management technology.
    • Continued progress in the development pipeline through targeted investment in scientific research and development, with a clear focus on 2-3 headline products which are expected to launch before the end of 2017.
    • Good progress made towards the commercial field trials launch of these headline products, including ground-breaking sea lice treatment and delivery method.  This moves us closer to significant organic growth as the rate of pipeline product launches increases.
  • Improved performance in Breeding and Genetics with recovery in sales of salmon eggs to Chile and growth in sales volumes and prices in other markets and species
  • Signs of growth returning in shrimp markets despite challenges faced by the industry and Benchmark is well positioned to leverage its distribution network and position in the market
  • Benchmark’s new vaccine manufacturing facility at Braintree is now in the commissioning phase, with first commercial batches expected in H2 2017. This is a key step to securing the Group’s supply chain and protecting its know-how, as well as providing manufacturing capacity
  • Continued progress made with the development of top line synergies across the Group
  • Rate of new headcount growth slowed reflecting the policy to phase additions in parallel with top line growth.  The majority of the increase of 31 to 915 at end H1 (FY 2016: 884) relates to the launch of new production facilities

I am pleased to report that the Group is increasingly recognised by its customers, some of the world’s largest aquaculture producers, as a leading technology partner. The platform Benchmark has built over the last three years is delivering products with significant commercial potential, and the management team has displayed clear focus in its prioritisation of 2-3 key products which we expect to launch by the end of 2017.

Alex Hambro

Chairman of Benchmark

“The Company’s foresight and dynamic development of the new product pipeline ensures that, as predicted disease pressures grow in certain species (such as salmon), pipeline products which have already been in development for a number of years are introduced to address those pressures. Benchmark’s diversification strategy has also proved prudent, with adjusted EBITDA up 10% despite headwinds in business segments which had traditionally contributed significantly. There is a genuine feeling of excitement around those products which are near launch, and I look forward to updating shareholders on further progress at the Preliminary Results.”

Benchmark’s Interim Report for the period ended 31 March 2017 is now available here

Construction underway — Benchmark's biosecure salmon production facility in Norway

1. Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure.  In the period to 31 March 2017, acquisition related costs were a net credit of £2.1m (H1 2016: £11.8m expense; FY 2016: £12.9m expense), and exceptional items were £0.2m (H1 2016: £0.3m; FY 2016: £0.1m).