Benchmark cuts annual losses by £11.2m
An increased demand for salmon eggs helped aquaculture health, nutrition and genetics business Benchmark reduce annual losses from £18.3 million in 2016 to £7.1m last year, the UK-based company said today.
Revenue increased by 28% to £140m, helped by a 47% sales growth in Benchmark's Genetics division - which includes Norwegian salmon egg producer SalmoBreed - but hindered by falling demand for its lice treatment Salmosan. Sales of the treatment are expected to improve this year due to a switch to direct distribution in Chile.
In the company's preliminary annual report for 2017, Benchmark chief executive Malcolm Pye said it had been been a transitional year, with some challenges. "After three years of heavy investment and acquisitions to build a platform of products and technologies with strong market positions, our focus during the year was on strengthening and aligning the organisation for the next phase of our growth."
Highlights of the report included:
- £21.5m investment in production capacity in genetics and animal health
- £15.2m investment in R&D
- Adjusted EBITDA increased by 9%
- Loss for the year reduced by 61%
10-year agreement
Benchmark also signed a new 10-year agreement with Great Salt Lake Cooperative securing access to high quality artemia, and like-for-like revenues in its Advanced Nutrition division grew by 21%, driven by continued signs of recovery in key shrimp markets and increased market share driven by demand for higher margin live feed replacement and health diets.
Pye said there had been a few setbacks, "notably the delay experienced in the launch of the commercial field trials phase for Ectosan, our new sea lice treatment; this was exacerbated by the impact from the anticipated drop in sales of Salmosan as a result of the development of partial resistance to the product and the industry focus on mechanical treatments.
"The increased complexity from the addition of the CleanTreat system to the Ectosan solution required the delay, but critically has created new opportunities for the Group. We are pleased that commercial trials for Ectosan have now commenced delivering excellent results so far and confirming the very significant potential of this product in the market."
Clean Treat purifies processing water with sea lice agent residues.
Broodstock facility
Pye added: "Sales in our Genetics division grew strongly as well, by 47% to £30.5m (2016: £20.7m), driven by increased demand for our salmon eggs which were up on prior year in every major market. Our new state-of-the-art land-based broodstock facility joint venture in Norway, with capacity to produce over 150 million ova per year, will enable us to continue to develop this market. The first broodstock has been delivered and salmon eggs from this stock will be produced in early Autumn 2018."
Benchmark launched five new products in 2017, and has 15 new products in the final phase of development.
The value of Benchmark shares went down by 1.4 pence, and no dividend is recommended for shareholders.
Pye said: "The organic growth delivered in the year and the achievement of significant milestones, together with the increased activity in many of our key markets at the end of the year leaves us full of confidence going into the new financial year. The continued growing global demand for aquaculture products, the disease challenges faced, and pressure to limit the use of antibiotics, puts the group in a strong position to drive growth for many years to come."
