Sheffield-based Benchmark Holdings, the aquaculture health, genetics and nutrition firm, said in a trading update its first half revenue rose 3.4% to £78.3 million.
Benchmark said the performance was driven by growth in genetics, animal health and knowledge services businesses “which more than offset lower revenues in advanced nutrition as a result of weakness in the global shrimp market.”
The firm also said it has mandated DNB Markets to arrange a series of fixed income investor meetings in connection with the refinancing of its existing $90 million credit facility.
Benchmark said it expects to deliver full-year results broadly in line with market expectations.
“Adjusted EBITDA of £7.5m was 23% ahead of H1 2018 reflecting the contribution of higher value products, an increase in the value of biological assets as a result of growing sales and increasing capacity at the company’s new land based salmon egg facility in Norway, as well as ongoing cost control,” said Benchmark.
“Adjusted EBITDA margin for the period grew to 10% (H1 2018: 8%). Net debt at 31 March 2019 was £65.5m.
“The company delivered against the strategic milestones set for the period, including further trials of its next generation sea lice treatment and establishing a supply chain for the roll-out of the company’s disease resistant shrimp in Asia, where trials continue to show significant commercial potential.
“Post period end the company inaugurated its new state of the art, land based, salmon egg production facility in Norway.
“The company’s programme of structural and operational efficiencies is underway to reallocate capital, reduce costs, grow margins, prioritise R&D spend, and exit from non-core activities.
“During the period the company streamlined its advanced nutrition production facilities in Asia resulting in the sale of a site, and its lumpfish operations which resulted in closure of one of its sites.
“Options for the company’s companion animal products are still being evaluated, with the most likely outcome being the establishment of a commercialisation partnership.
“As announced on 29 May 2019, the change of control at AquaChile, our genetics JV partner, has resulted in an opportunity for the company to take control of a breeding genetics facility currently owned by the JV and to pursue an independent strategy.
“It is envisaged that Benchmark’s original equity investment will be returned to Benchmark and that this will be reinvested in the company’s genetics business in Chile in the coming years, leaving the company well placed to continue to build a strong local presence in this important market.”
In its outlook, Benchmark said: “Conditions in the company’s core markets are mixed with salmon benefitting from growing demand and stable prices, while in the shrimp and sea bass/bream markets, a temporary overstocking has resulted in depressed prices and a decrease in production levels amongst our customers.
“This volatility is not unusual in our markets and we are monitoring it closely.
“The company is making significant progress in the implementation of its programme of structural efficiencies, and overall, we expect the group to deliver broadly in line with market expectations for the full year.”