Q3 Results

Benchmark Holdings PLC
24 August 2023
 

24 August 2023

 

Information within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014

 

Benchmark Holdings plc

("Benchmark", the "Company" or the "Group")

 

Q3 & Year to Date Results

(Three months and nine months ended 30 June 2023)

 

Strong performance YTD Q3 

 

Q3 reflects anticipated seasonality in Health and conditions in the global shrimp market

 

In compliance with the terms of the Company's unsecured Green bond, which requires it to publish quarterly financial information, Benchmark, the aquaculture biotechnology business, announces its unaudited results for the three months ended 30 June 2023 (the "Period"), which constitutes the third quarter for the fiscal year ("FY") 2023, and its year to date unaudited results for the nine months ended 30 June 2023. All Q3 FY23, Q3 FY22, Q3 YTD FY23 and Q3 YTD FY22 figures quoted in this announcement are based on unaudited accounts.

Financial highlights

Q3 FY23   

·    Q3 FY23 revenues 6% below the prior year (-1% CER) with growth in Genetics offset by lower revenues in Advanced Nutrition due to ongoing softness in shrimp markets. Health revenues broadly in line with the prior year.

·    Q3 FY23 Adjusted EBITDA excluding fair value movements from biological assets 29% below the prior year (-19% CER) as a result of lower revenues, adverse forex and quarter specific factors including an increase in third party production costs for our salmon harvest income, partially offset by ongoing cost control.

·    Adjusted Operating Loss excluding FV movement in biological assets of £1.7m (Q3 FY22: £0.7m loss).

·    Loss before tax reduced substantially £4.7m (Q3 FY22: £11.2m loss) due to a material reduction in net finance costs as a result of forex movements and mark to market movements in the value of financial derivatives.

Q3 YTD FY23 - Significant year on year growth and improved profitability

·    Q3 YTD FY23 revenues 15% ahead of the prior year (+13% CER), driven by growth in Genetics and Health; Advanced Nutrition revenues in line with prior year.

·    Adjusted EBITDA excluding fair value movements from biological assets 27% ahead of the prior year (+27% CER) driven primarily by growth in Health and resilience in Advanced Nutrition.  Adjusted EBITDA margin (excluding fair value movements from biological assets) of 19% (Q3 YTD FY22: 17%).

·    Adjusted Operating Profit excluding FV movement in biological assets more than triple to £9.7m (Q3 YTD FY22: £3.2m).

·    Loss before tax significantly reduced to £6.6m (Q3 YTD FY22: £16.4m).

·    Operating cash significantly improved to £11.2m inflow versus prior year (Q3 YTD FY22: cash outflow of £2.2m).

·    Cash of £32.9m and liquidity of £45.1m (cash and available facility) as at 30 June 2023.

·    Net debt (excluding lease liabilities) continues to reduce year on year to £45.7m as at 30 June 2023 (31 March 2023: £44.5m; 30 September 2022: £47.5m).

Business Area Highlights

·    Advanced Nutrition - commercial focus and cost control mitigate impact of shrimp market conditions

Q3 revenues 17% below the prior year (-18% CER) reflecting global shrimp market.  YTD Q3 23 revenues in line with prior year.

Despite drop in revenue, Q3 Adjusted EBITDA 20% above Q3 2022 as a result of product mix, lower freight costs, and ongoing efficiency programme. YTD Q3 Adjusted EBITDA 4% ahead of the prior year.

Conditions in global shrimp markets affecting demand for our nutritional solutions

·    Genetics - revenue growth offset by quarter specific factors  

Q3 revenues 10% above Q3 2022 (+21% CER) driven by higher sales of salmon eggs and harvest revenues

§ Growth in salmon egg sales: 68.5m eggs sold in Q3 FY23 (Q3 FY22: 59.4m eggs)

YTD Q3 revenues 23% (+28% CER) ahead of prior year

Q3 Adjusted EBITDA excluding FV movement in biological assets 44% below the prior year (-29% CER) due to a number of factors including:

§ higher third-party production costs related to harvest income

§ lower capitalisation of biological asset production costs, and

§ forex headwinds

YTD Q3 Adjusted EBITDA excluding FV movements 5% below the prior year (CER +7% higher).

·    Health - results reflective of seasonality in sea lice treatments

Q3 revenues broadly in line with Q3 2022 at 1% below (+5% CER)

YTD Q3 revenues 57% ahead of prior year (+59% CER)

Q3 Adjusted EBITDA loss of £1.0m (Q3 FY22 loss £0.6m) due to low utilisation of CleanTreat® vessels during low season for sea lice treatments

YTD Q3 Adjusted EBITDA of £5.6m (YTD Q3 2022: £0.5m loss).

The Company is making progress in the development of the new configuration and business model for CleanTreat® with partners MMC and SALT

·    Group integration initiatives - steps taken to realise synergies and strengthen commercial focus by combining Health and Genetics activities within Salmon under common leadership with a combined commercial offering.

Current trading and outlook

·    Trading within market expectations for FY23:

Good visibility in Genetics for the remainder of the year

Advanced Nutrition will continue to be influenced by weak global shrimp market conditions

Health expected to benefit from seasonal increase in sea lice treatments during Q4

Efforts continue to focus on profitability and cash generation driven by commercial success and integration synergies

 

£m

Q3 YTD FY23

Q3 YTD FY22

% CER

Q3 YTD FY23

 

Q3 FY23

Q3 FY22

% CER

Q3 FY23

Revenue

133.1

+15%

115.5

+13%

34.3

-6%

36.3

-1%

Adjusted







Adjusted EBITDA1

27.1

+21%

22.4

+21%

5.1

-23%

6.6

-13%

Adj. EBITDA excluding biological asset fair value movements

25.4

+27%

20.0

+27%

3.6

-29%

5.1

-19%

Adjusted Operating Profit/(Loss)2

11.4

104%

5.6

107%

(0.2)

-129%

0.8

-58%

Adj. Operating profit excluding biological asset fair value movements

9.7

207%

3.2

206%

(1.7)

-149%

(0.7)

-83%

Statutory







Operating loss

(4.2)

32%

(6.1)

35%

(4.5)

-13%

(4.0)

1%

Loss before tax

(6.6)

60%

(16.4)

64%

(4.7)

58%

(11.2)

63%

Basic loss per share (p)

(1.27)

(3.24)


(0.70)

(1.90)


Net debt3

(66.9)

(89.1)


(66.9)

(89.1)


Net debt3 excluding lease liabilities

(45.7)

(59.3)


(45.7)

(59.3)


Business Area summary

£m

Q3 YTD FY23

Q3 YTD FY22

% CER

Q3 YTD FY23

 

Q3 FY23

Q3 FY22

% CER

Q3 FY23

Revenue





 

 

Advanced Nutrition

61.4

0%

61.4

-8%

16.1

-17%

19.4

-18%

Genetics

48.9

+23%

39.7

+28%

14.4

+10%

13.1

+21%

Health

22.9

+57%

14.5

+59%

3.8

-1%

3.8

+5%

Adjusted EBITDA1

 

 


 



Advanced Nutrition

14.9

+4%

14.3

-4%

3.4

+20%

2.8

+20%

Genetics

9.3

-11%

10.5

0%

3.4

-30%

4.8

-18%

-       Net of fair value movements in biological assets

7.6

-5%

8.1

+7%

1.9

-44%

3.4

-29%

Health

5.6

+1,188%

(0.5)

1,186%

(1.0)

-67%

(0.6)

-57%

 

*Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure

(2) Adjusted Operating Profit is operating loss before exceptional items including acquisition related items and amortisation of intangible assets excluding development costs

(3) Net debt is cash and cash equivalents less loans and borrowings 

 

Trond Williksen, CEO, commented:

 

"Our Q3 trading reflects the anticipated low season for our Health solutions in the salmon industry, as well as the continuing adverse market conditions in the global shrimp market. Despite these headwinds we have delivered strong year to date results, with double digit growth in revenues and earnings compared to the prior year.

 

"For the remainder of the year we have good visibility in Genetics and are moving into the main season for sea lice treatments in Health. Notwithstanding the prevailing market conditions for Advanced Nutrition, we continue to demonstrate momentum in our business and the resilience of our diversified business model to face cyclical fluctuations in our end markets. We continue our strong commercial focus to ensure the further growth and profitable development of the Group."

 

Presentation for analysts and institutional investors at 08.00 UK time (09.00 CET)  

 

Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial Officer will host a presentation for analysts and institutional investors on the day at 08.00 UK time. 

 

The presentation will be held in person at DnB's offices in Oslo at Dronning Eufemias gate 30, 0191 Oslo, Norway. If you would like to attend in person, please contact Henriette Christensen at henriette.gjeldvik.christensen@dnb.no

 

A live webcast of the presentation will be available for analysts and investors to join remotely at the following link: Benchmark Holdings Webcast Q3 2023 (royalcast.com)

 

A copy of the presentation can be found on the Company's website https://www.benchmarkplc.com/investors/reports-presentations/

 

Equity Development webcast at 12.00 UK time

 

Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial Officer will host a second webcast for retail investors and wealth managers on the day at 12.00 UK time. The webcast is open to all existing and potential shareholders. 

 

To register please visit: https://www.equitydevelopment.co.uk/news-and-events/benchmark-q3results-presentation-24aug2023

 

A recording of the presentation will be available after the event on the Equity Development website.

 

Enquiries

 

For further information, please contact:


Benchmark Holdings plc

benchmark@mphc.com

Trond Williksen, CEO


Septima Maguire, CFO


Ivonne Cantu, Investor Relations






Numis (Broker and NOMAD)

Tel:  020 7260 1000

Freddie Barnfield, Duncan Monteith, Sher Shah

 




MHP  

Tel:  +44(0) 20 3128 8004

Katie Hunt, Reg Hoare, Veronica Farah                                                                                                           benchmark@mhpgroup.com

 

About Benchmark 

Benchmark is a market leading aquaculture biotechnology company. Benchmark's mission is to drive sustainability in aquaculture by delivering products and solutions in genetics, advanced nutrition and health which improve yield, growth and animal health and welfare.

Through a global footprint in 26 countries and a broad portfolio of products and solutions, Benchmark addresses many of the major aquaculture species - salmon, shrimp, sea bass and sea bream, and tilapia -   in all the major aquaculture regions around the world. Find out more at www.benchmarkplc.com

 

Management Report

 

Q3 FY23 commentary

 

Benchmark reported revenues of £34.3m, 6% below the prior year revenue of £36.3m. This resulted from revenue growth in Genetics of 10% being offset by a 17% drop in Advanced Nutrition as a result of prevailing conditions in the global shrimp markets during the period.  Revenues in the Health business area broadly in line with the prior year (-1%). On a constant exchange rate (CER) basis Group revenues were 1% below the prior year, a reflection of some forex headwinds in the quarter. 

 

Adjusted EBITDA (excluding fair value uplift from biological assets) was £3.6m, 29% (CER -19%) below the prior year (Q3 FY22: £5.1m).  This was mainly due to a reduction in Adjusted EBITDA in Genetics and Health.  Despite lower revenues in Advanced Nutrition, Adjusted EBITDA showed growth of 20% in Q3 FY23 due to continued commercial focus and cost control.  Further detail on business area performance is provided below.

 

Operating costs for the Group of £10.6m were 7% below last year (Q3 FY22: £11.5m) with a decrease in all business areas demonstrating the focus on continued cost control. R&D expenses of £1.5m were broadly in line with the prior year (Q3 FY22: £1.4m).  Depreciation and amortisation decreased to £9.0m (Q3 FY22: £10.1m), taking Group operating loss for the quarter to £4.5m (Q3 FY22: £4.0m).  The Adjusted Operating loss excluding fair value movements in biological assets was £1.7m (Q3 FY22: £0.7m).

 

Net finance costs were £0.2m, significantly below the comparative period (Q3 FY22: £7.3m), due to a combination of the portion of the movement in the fair value of the derivative instrument which is ineffective for hedge accounting purposes and forex movements.  The ineffective portion of the movement in the fair value of the derivative in the period was a gain of £1.1m (Q3 YTD FY22: £2.3m loss) and the Group had net forex gains of £1.3m (Q3 FY22:  £3.1m).  As a result of these year-on-year movements, the loss before tax in the quarter was £4.7m (Q3 FY22: £11.2m).  Interest charges, including interest on right of use assets increased £0.9m primarily following increased interest rates from the refinancing in FY22.

 

The tax charge in the period was a £76,000 credit (Q3 FY22: £1.6m charge) due to lower profits in Advanced Nutrition and Genetics in the quarter in territories where no loss relief was available.  The resulting loss after tax for the quarter was £4.6m (Q3 FY22: loss £12.8m).

 

We continue our efforts to enhance our commercial focus and integrate the Group to drive synergies. In the period we brought together our Health and Genetics operations under common leadership which drives the synergies from our salmon product portfolio across the two business areas and results in an integrated customer-centric offering.  

 

Advanced Nutrition

 

Advanced Nutrition revenues were down 17% (CER -18%) compared to Q3 2022, a direct result of conditions in the global shrimp markets which remained unfavourable throughout the year.  In 2023 the global shrimp markets have been affected by a number of factors including inflation in the US and in Europe which have reduced consumption, creating oversupply and driving down farm gate prices for shrimp. Imports to the US and Europe are estimated to be 20%-30% below the prior year.  At the same time shrimp producers have been faced with increased costs particularly in aquafeed and have reacted by reducing pond stocking thus limiting demand for our products.  This environment is expected to continue for the remainder of the year. By product area, sales of Artemia were -21%, Diets -16% and Health -8% against Q3 2022. 

 

Against this backdrop our business has demonstrated resilience, making commercial decisions to maintain and strengthen our market position, while taking action to align our resources and cost base to the market environment.  As a result of this, and with a shift in the product mix, our Advanced Nutrition business delivered an increase in Adjusted EBITDA of 20% to £3.4m (Q3 FY22: £2.8m) (CER 20%).

 

Revenue YTD at £61.4m was in line with the prior year (Q3 YTD FY22: £61.4m) with assistance from forex movements (CER -8% below prior year); Adjusted EBITDA was 4% above (CER -4% below) prior year at £14.9m (Q3 YTD FY22: £14.3m) due to continued commercial focus and cost control.

 

Genetics

 

Despite forex headwinds with weak NOK and ISK, Genetics delivered good revenue growth in Q3 FY23 with revenues of £14.4m, 10% above the prior year (Q3 FY22: £13.1m) (+21% CER).  This was driven mainly by strong salmon egg sales, together with improved revenue from harvest income and smolt sales, partially offset by a reduction in sales of SPR shrimp and lumpfish. Sales of salmon eggs were 39% higher than the prior year while sales from shrimp were below the prior year at £0.2m (Q3 FY22: £0.4m) and revenues from tilapia were flat.

 

Our work to refine the shrimp genetics product line is ongoing and we have lowered our commercial activities during this period. Prevailing conditions in the shrimp markets have also affected this area of our business.  As previously announced, we are conducting a strategic review of our tilapia operations and are well advanced. This has had a bearing on our commercial activities in this area in the short run.

 

Adjusted EBITDA for Q3 FY23 excluding fair value movements of biological assets was down 44% to £1.9m (Q3 FY22: £3.4m) due to a number of factors specific to Q3. These included forex pressure from weak NOK and ISK (-£0.6m), a £1.2m reduction in the margin from harvest income where third party production costs have been significantly higher than the prior year, together with our own cost inflation, and lower capitalisation of production costs as a result of lower closing stock levels (-£1.2m). Biological assets were higher in Q3 FY22 in anticipation of higher sales in Q4 FY22 due to supply issues in the market a year ago.  On a constant currency basis Adjusted EBITDA excluding FV movements was down -29% compared to Q3 FY22.

 

Revenue YTD at £48.9m was 23% higher than the prior year (Q3 YTD FY22: £39.7m) and Adjusted EBITDA excluding fair value movements in biological assets was 5% below the prior year at £7.6m (Q3 YTD FY22: £8.1m) (+7% CER).

 

Health

 

Revenues in Q3 FY23 were £3.8m, in line with the prior year (Q3 FY22: £3.8m).  Sales from Ectosan® Vet and CleanTreat® were £2.7m, 25% ahead of the prior year, while Salmosan® sales for the quarter were below prior year at £1.1m (Q3 FY22 £1.6m) following strong sales in Q2.  Adjusted EBITDA was a loss of £1.0m (Q3 FY22: loss of £0.6m) as a result of the low utilisation rate of the CleanTreat® assets in the quarter due to it being the low season for sea lice treatments.  £0.9m of the revenue in the period (Q3 FY22: £0.2m) was derived from recharging vessel and fuel costs associated with the Ectosan® Vet and CleanTreat® operations.  YTD revenue was significantly ahead of the prior year at £22.9m (Q3 YTD FY22: £14.5m) with corresponding YTD Adjusted EBITDA also higher at £5.6m (YTD Q3 FY22 £0.5m loss).

 

Q3 has seasonally been a slow period for sea lice treatments as anticipated, however going into Q4, we expect increased activity. We continue to progress the development of a new configuration of the Group's CleanTreat® systems with our partners MMC, a wellboat equipment provider and SALT, a ship designer. The new configuration is based on the next generation of large wellboats, which form a core part of our customers' infrastructure and is of strategic importance for the ongoing commercial roll-out of Ectosan® Vet and CleanTreat®.

 

Q3 YTD FY23 Commentary

 

Q3 YTD the Group delivered 15% growth (CER +13%) in revenue at £133.1m and 27% growth (CER +27%) in Adjusted EBITDA excluding fair value movements from biological assets at £25.4m. Genetics and Health reported strong revenue growth of 23% and 57% respectively while revenues in Advanced Nutrition were in line with the prior year despite significant headwinds in the shrimp markets.

 

Operating costs were £34.7m, an 11% increase from the prior year (Q3 YTD FY22: £31.4) due to higher activity levels, cost inflation and the impact of forex movements, while R&D expenses of £4.5m were 4% lower than the comparative period in the previous year (Q3 YTD FY22: £4.7m). Total R&D investment including capitalised development costs was £4.9m, £1.4m below the prior year (Q3 YTD FY22: £6.3m) following the cessation of capitalisation of SPR shrimp development costs at the end of the prior year.

 

Adjusted EBITDA (excluding fair value movement from biological assets) was £25.4m (Q3 YTD FY22: £20.0m) driven by higher revenues, increased asset utilisation and ongoing cost control. As a result, the Group achieved an Adjusted EBITDA margin (excluding fair value movement from biological assets) of 19% (Q3 YTD FY22: 17%).  Depreciation and amortisation decreased 3% from the comparative period last year to £28.1m (Q3 YTD FY22: £29.0m), leaving the operating loss in the period at £4.2m (Q3 YTD FY22: £6.1m).

 

There was a significant decrease in net finance costs for Q3 YTD to £2.4m (Q3 YTD FY22: £10.3m), primarily due to the portion of the movement in the fair value of the derivative instrument which is ineffective for hedge accounting purposes and forex movements.  Ineffective movements in the fair value of the derivative instruments were a gain of £3.7m (Q3 YTD FY22: £1.7m loss) and there were net forex gains of £0.5m (Q3 YTD FY22: £2.6m loss). Interest costs, including interest on right of use assets, were £1.2m higher than prior year following the refinancing at the end of FY22.  Together this led to a Q3 YTD FY23 loss before tax of £6.6m significantly below the loss in the previous year of £16.4m. There was a lower income tax charge in the period of £1.4m (YTD Q3 FY22: £5.2m) due to lower profits in the territories with no available loss reliefs, leaving loss after tax of £8.0m significantly below the prior year (Q3 YTD FY22: loss after tax £21.6m).

 

Year to date, the Group reported a net operating cash inflow of £11.2m after an increase in working capital of £5.3m mainly due to a reduction in payables in the nutrition business which has had low sales in recent months.  Net cash outflow from investing activities was £11.3m, £8.0m of which was spent in acquiring the minority interest in Benchmark Genetics Iceland.  Capex was £4.2m primarily in Genetics (£2.8m) and Health (£1.2m) and capitalised R&D was £0.4m mostly incurred in Health, both of which were offset by receipts of deferred consideration from earlier year disposals of divested businesses of £1.3m.  Our cash position at the end of the period was £32.9m and liquidity of £45.1m.

 

Outlook

 

YTD Q3 FY23 the Group has delivered double digit revenue growth of 15% and 27% increase in Adjusted EBITDA excluding FV movement from biological assets. This demonstrates the momentum in our business and resilience of our diversified business model to face cyclical fluctuations in our end markets. 

 

Looking forward conditions in the salmon remain favourable while the global shrimp markets are expected to remain unchanged for the rest of the year.  We anticipate a seasonal improvement in sales of our Health solutions and continue to have good visibility of our Genetics revenues. There is continued commercial focus in the business, and the Group is trading within market expectations for the full year.

All figures in £000's

Notes

Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

Revenue

4

34,267

36,272

133,129

115,519

158,277

Cost of sales


(16,990)

(16,799)

(66,807)

(56,524)

(75,149)

Gross profit

 

17,277

19,473

66,322

58,995

83,128

Research and development costs


(1,496)

(1,426)

(4,494)

(4,663)

(6,691)

Other operating costs


(10,639)

(11,464)

(34,682)

(31,371)

(44,661)

Share of (loss)/profit of equity-accounted investees, net of tax


(55)

(10)

1

(538)

(595)

Adjusted EBITDA²

 

5,087

6,573

27,147

22,423

31,181

Exceptional - restructuring, disposal and acquisition related items

5

(530)

(469)

(3,218)

439

16

EBITDA¹

 

4,557

6,104

23,929

22,862

31,197

Depreciation and impairment


(4,702)

(5,206)

(13,868)

(15,258)

(19,897)

Amortisation and impairment


(4,318)

(4,849)

(14,230)

(13,721)

(19,161)

Operating profit/(loss)

 

(4,463)

(3,951)

(4,169)

(6,117)

(7,861)

Finance cost

6

(2,981)

(7,428)

(13,207)

(10,674)

(20,057)

Finance income

6

2,746

141

10,762

409

4,741

Loss before taxation

 

(4,698)

(11,238)

(6,614)

(16,382)

(23,177)

Tax on loss

7

76

(1,584)

(1,407)

(5,200)

(7,274)

Loss for the period


(4,622)

(12,822)

(8,021)

(21,582)

(30,451)

Loss for the period attributable to:

 






- Owners of the parent


(5,153)

(13,394)

(9,294)

(22,526)

(32,087)

- Non-controlling interest


531

572

1,273

944

1,636

 


(4,622)

(12,822)

(8,021)

(21,582)

(30,451)

 







Earnings per share

 






Basic loss per share (pence)

8

(0.70)

(1.90)

(1.27)

(3.24)

(4.60)

Diluted loss per share (pence)

8

(0.70)

(1.90)

(1.27)

(3.24)

(4.60)

 

1 EBITDA - Earnings before interest, tax, depreciation, amortisation, and impairment

2 Adjusted EBITDA - EBITDA before exceptional items including acquisition related items

 

 

 

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

 







Loss for the period

 

(4,622)

(12,822)

(8,021)

(21,582)

(30,451)

Other comprehensive income

 






Items that are or may be reclassified subsequently to profit or loss

 






Foreign exchange translation differences


(11,153)

17,180

(35,166)

24,381

47,606

Cash flow hedges - changes in fair value


2,093

(2,368)

1,794

580

2,627

Cash flow hedges - reclassified to profit or loss


(273)

(19)

(565)

159

2,546

Total comprehensive income for the period


(13,955)

1,971

(41,958)

3,538

22,328

 







Total comprehensive income for the period attributable to:

 






- Owners of the parent


(14,204)

1,381

(42,250)

2,217

20,326

- Non-controlling interest


249

590

292

1,321

2,002

 


(13,955)

1,971

(41,958)

3,538

22,328

 

 

The accompanying notes are an integral part of this consolidated financial information.




30 June 2023


30 June 2022


30 September 2022

All figures in £000's

Notes

(unaudited)

(unaudited)

(audited)

Assets

 




Property, plant and equipment


71,880

81,478

81,900

Right-of-use assets


21,755

29,060

27,034

Intangible assets


205,312

235,175

245,264

Equity-accounted investees


3,028

3,086

3,113

Other investments


13

15

15

Biological and agricultural assets


21,688

20,927

20,878

Non-current assets


323,676

369,741

378,204

Inventories


26,244

27,228

29,813

Biological and agricultural assets


21,301

23,636

25,780

Trade and other receivables


47,858

51,105

56,377

Cash and cash equivalents


32,858

38,179

36,399

 


128,261

140,148

148,369

Assets held for sale

9

850

-

-

Current assets


129,111

140,148

148,369

Total assets


452,787

509,889

526,573

Liabilities

 




Trade and other payables


(32,034)

(41,243)

(44,324)

Loans and borrowings

10

(21,757)

(14,226)

(17,091)

Corporation tax liability


(6,791)

(7,408)

(10,211)

Provisions


(1,557)

(543)

(1,631)

Current liabilities


(62,139)

(63,420)

(73,257)

Loans and borrowings

10

(77,960)

(113,094)

(93,045)

Other payables


(4,908)

(1,055)

(8,996)

Deferred tax


(22,755)

(28,116)

(27,990)

Non-current liabilities


(105,623)

(142,265)

(130,031)

Total liabilities


(167,762)

(205,685)

(203,288)

Net assets


285,025

304,204

323,285

Issued capital and reserves attributable to owners of the parent

 




Share capital

11

739

704

704

Additional paid-in share capital

11

37,428

420,824

420,824

Capital redemption reserve


5

5

5

Retained earnings


197,168

(175,866)

(185,136)

Hedging reserve


526

(5,137)

(703)

Foreign exchange reserve


43,520

54,469

77,705

Equity attributable to owners of the parent


279,386

294,999

313,399

Non-controlling interest


5,639

9,205

9,886

Total equity and reserves


285,025

304,204

323,285

 

                                                                                                           

The accompanying notes are an integral part of this consolidated financial information.

 

 Share
capital

 Additional paid-in share capital* 

 Other
reserves

 Hedging 
reserve

 Retained
 earnings

 Total attributable
 to equity holders of
parent

 Non-
controlling
interest

 Total
equity


 £000

 £000

 £000

 £000

 £000

 £000

 £000

 £000

 









As at 1 October 2022 (audited)

704

420,824

77,710

(703)

(185,136)

313,399

9,886

323,285

Comprehensive income/(loss) for the period

 








Profit/(loss) for the period

-

-

-

-

(9,294)

(9,294)

1,273

(8,021)

Other comprehensive income/(loss)

-

-

(34,185)

1,229

-

(32,956)

(981)

(33,937)

Total comprehensive income/(loss) for the period

-

-

(34,185)

1,229

(9,294)

(42,250)

292

(41,958)

Contributions by and distributions to owners

 








Share issue

35

12,985

-

-

-

13,020

-

13,020

Share issue costs recognised through equity

-

(2,146)

-

-

-

(2,146)

-

(2,146)

Cancellation of part of share premium account (note 11)

-

(394,235)

-

-

394,235

-

-

-

Share-based payment

-

-

-

-

833

833

-

833

Total contributions by and distributions to owners

35

(383,396)

-

-

395,068

11,707

-

11,707

Changes in ownership

 








Acquisition of NCI

-

-

-

-

(3,470)

(3,470)

(4,539)

(8,009)

Total changes in ownership interests

-

-

-

-

(3,470)

(3,470)

(4,539)

(8,009)

Total transactions with owners of the Company

35

(383,396)

-

-

391,598

8,237

(4,539)

3,698

As at 30 June 2023 (unaudited)

739

37,428

43,525

526

197,168

5,639

285,025

 









As at 1 October 2021 (audited)

670

400,682

30,470

(5,876)

(154,231)

271,715

7,884

279,599

Comprehensive income/(loss)for the period









Profit/(loss) for the period

-

-

-

-

(22,526)

(22,526)

944

(21,582)

Other comprehensive income/(loss)

-

-

24,004

739

-

24,743

377

25,120

Total comprehensive income/(loss)for the period

-

-

24,004

739

(22,526)

2,217

1,321

3,538

Contributions by and distributions to owners

 








Share issue

34

20,704

-

-

-

20,738

-

20,738

Share issue costs recognised through equity

-

(562)

-

-

-

(562)

-

(562)

Share-based payment

-

-

-

-

891

891

-

891

Total contributions by and distributions to owners

34

20,142

-

-

891

21,067

-

21,067

Changes in ownership

 








Total changes in ownership interests

-

-

-

-

-

-

-

-

Total transactions with owners of the Company

34

20,142

-

-

891

21,067

-

21,067

As at 30 June 2022 (unaudited)

704

420,824

54,474

(5,137)

(175,866)

294,999

9,205

304,204

 









As at 1 October 2021 (audited)

670

400,682

30,470

(5,876)

(154,231)

271,715

7,884

279,599

Comprehensive income/(loss) for the period









Profit/(loss) for the period

-

-

-

-

(32,087)

(32,087)

1,636

(30,451)

Other comprehensive income/(loss)

-

-

47,240

5,173

-

52,413

366

52,779

Total comprehensive income/(loss) for the period

-

-

47,240

5,173

(32,087)

20,326

2,002

22,328

Contributions by and distributions to owners

 








Share issue

34

20,704

-

-

-

20,738

-

20,738

Share issue costs recognised through equity

-

(562)

-

-

-

(562)

-

(562)

Share-based payment

-

-

-

-

1,182

1,182

-

1,182

Total contributions by and distributions to owners

34

20,142

-

-

1,182

21,358

-

21,358

Changes in ownership

 








Total changes in ownership interests

-

-

-

-

-

-

-

-

Total transactions with owners of the Company

34

20,142

-

-

1,182

21,358

-

21,358

As at 30 September 2022 (audited)

704

420,824

77,710

(703)

(185,136)

313,399

9,886

323,285

 

*Other reserves in this statement is an aggregation of capital redemption reserve and foreign exchange reserve



30 June
2023


30 June
2022


30 September 2022


Notes

(unaudited)

(unaudited)

(audited)

Cash flows from operating activities

 




Loss for the period

 

(8,021)

(21,582)

(30,451)

Adjustments for:

 




Depreciation and impairment of property, plant and equipment


6,363

6,324

8,602

Depreciation and impairment of right-of-use assets


7,505

8,934

11,295

Amortisation and impairment of intangible fixed assets


14,230

13,721

19,161

Loss on sale of property, plant and equipment


(36)

(43)

(43)

Finance income


(4,195)

(238)

(319)

Finance costs


7,173

7,913

18,437

Increase in fair value of contingent consideration receivable


-

(1,203)

(1,203)

Share of (loss)/profit of equity-accounted investees, net of tax


(1)

538

595

Foreign exchange (losses)/gains


(2,443)

5,607

(3,985)

Share-based payment expense


833

891

1,182

Other adjustments for non-cash items


-

-

(276)

Tax charge


1,407

5,200

7,274

Decrease/(increase) in trade and other receivables


3,772

(4,456)

(8,511)

Decrease/(increase) in inventories


2,249

(7,314)

(5,406)

Increase in biological and agricultural assets


(403)

(4,144)

(6,099)

(Decrease)/increase in trade and other payables


(10,862)

(6,228)

6,946

(Decrease)/increase in provisions


(20)

(21)

1,058

 


17,551

3,899

18,257

Income taxes paid


(6,335)

(6,100)

(7,447)

Net cash flows generated from operating activities

 

11,216

(2,201)

10,810

Investing activities

 




Acquisition of minority interests in subsidiaries, net of cash acquired

14

(8,009)

-

-

Acquisition of subsidiaries

14

(48)

-

-

Purchase of investments


(359)

(108)

(378)

Receipts from disposal of investments

14

1,250

919

1,544

Purchases of property, plant and equipment


(4,171)

(7,169)

(10,808)

Purchase of intangibles


(120)

(1,757)

(205)

Capitalised research and development costs


(380)

-

(1,708)

Proceeds from sale of fixed assets


99

194

220

Interest received


469

34

119

Net cash flows used in investing activities

 

(11,269)

(7,887)

(11,216)

Financing activities

 




Proceeds of share issues


13,020

20,782

20,737

Share-issue costs recognised through equity


(2,146)

(607)

(562)

Proceeds from bank or other borrowings


21,984

-

67,939

Repayment of bank or other borrowings


(17,527)

(1,333)

(74,874)

Capitalised borrowing costs


(1,159)

-

-

Interest and finance charges paid


(6,736)

(5,381)

(9,629)

Repayments of lease liabilities


(7,349)

(6,928)

(10,533)

Net cash inflow/(outflow) from financing activities

 

87

6,533

(6,922)

Net increase/(decrease) in cash and cash equivalents

 

34

(3,555)

(7,328)

Cash and cash equivalents at beginning of period


36,399

39,460

39,460

Effect of movements in exchange rate


(3,575)

2,274

4,267

Cash and cash equivalents at end of period

 

32,858

38,179

36,399

 

1.       Basis of preparation

 

Benchmark Holdings plc (the 'Company') is a company incorporated and domiciled in the United Kingdom. These consolidated quarterly financial statements as at and for the nine months ended 30 June 2023 comprises those of the Company and its subsidiaries (together referred to as the 'Group').

 

These consolidated quarterly financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006 and are unaudited. These financial statements do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements. The Group's last annual statutory financial statements as at and for the year ended 30 September 2022 were prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 as it applies to companies reporting under those standards ("Adopted IFRS") and are available from the Company's website at www.benchmarkplc.com.

 

The prior year comparatives are derived from audited financial information for Benchmark Holdings PLC Group as set out in the Annual Report and Accounts for the year ended 30 September 2022 and the unaudited financial information in the Quarterly Financial Report for the nine months ended 30 June 2022. The comparative figures for the financial year ended 30 September 2022 are not the Company's statutory accounts for that financial year. Those accounts were approved by the Directors on 30 November 2022 and have been delivered to the Registrar of Companies. The audit report received on those accounts was (i) unqualified and (ii) did not include a reference to any matters to which the external auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

Statement of Compliance

 

These consolidated quarterly financial statements have been prepared in accordance with UK and EU adopted IAS 34 'Interim Financial Reporting'. These financial statements do not include all of the information required for the full annual financial statements and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 30 September 2022. These consolidated quarterly financial statements were approved by the Board of Directors on 24 August 2023.

 

Going concern

 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Management Report.

 

As at 30 June 2023 the Group had net assets of £285.0m (30 September 2022: £323.3m), including cash of £32.9m (30 September 2022: £36.4m) as set out in the consolidated balance sheet. The Group made a loss for the nine months of £8.0m (year ended 30 September 2022: loss £30.5m).

 

As noted in the Management Report, the business has continued to perform steadily in the first nine months and has shown resilience to some tough market conditions in recent months, with results in line with expectations.  The Directors have reviewed forecasts and cash flow projections for a period of at least 12 months including downside sensitivity assumptions in relation to trading performance across the Group to assess the impact on the Group's trading and cash flow forecasts and on the forecast compliance with the covenants included within the Group's financing arrangements.

 

In the downside analysis performed, the Directors considered severe but plausible scenarios on the Group's trading and cash flow forecasts, firstly in relation to continued roll out of the Ectosan® Vet and CleanTreat offering. Sensitivities considered included modelling slower ramp up of the commercialisation of Ectosan® Vet and CleanTreat® through delayed roll-out of the revised operating model for the service, together with reductions in expected biomass treated and reduced treatment prices. Key downside sensitivities modelled in other areas included assumptions on slower commercialisation of SPR shrimp, slower salmon egg sales growth both in Chile and to land-based farms in Genetics, along with sensitivities on sales price increases and demand for artemia feeds in certain territories. Mitigating measures within the control of management have been identified should they be required in response to these sensitivities, including reductions in areas of discretionary spend, tight control over new hires, and deferral of capital projects.

 

The refinancing exercise which commenced in FY22 was completed in Q1 FY23, so that adequate finance facilities are in place, and with financial instruments in place to fix interest rates and opportunities available to mitigate globally high inflation rates, the Group continues to show resilience against current global economic pressures.  The Directors are therefore confident that even under all of the above sensitivity analysis, the Group has sufficient liquidity and resources throughout the period u der review whilst still maintaining adequate headroom against the borrowing covenants and remain confident that the Group has adequate resources to continue to meet its liabilities as and when they fall due within the period of 12 months from the date of approval of these financial statements. Based on their assessment, the Directors believe it remains appropriate to prepare the financial statements on a going concern basis.

 

2.      Accounting policies

 

The accounting policies adopted are consistent with those used in preparing the consolidated financial statements for the financial year ended 30 September 2022.

 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total earnings.

Alternative performance measures ('APMs')

The Directors measure the performance of the Group based on a range of financial measures, including measures not recognised by EU-adopted IFRS. These APMs may not be directly comparable with other companies' APMs, and the Directors do not intend these as a substitute for, or superior to, IFRS measures.

Directors have presented the performance measures Adjusted EBITDA, Adjusted Operating Profit, Adjusted Profit Before Tax and Adjusted EBITDA excluding fair value movement on biological assets because they monitor performance at a consolidated level using these and believe that these measures are relevant to an understanding of the Group's financial performance (see note 12). Furthermore, the Directors also refer to current period results using constant currency, which are derived by retranslating current period results using the prior year's foreign exchange rates.

Use of estimates and judgements

The preparation of quarterly financial information requires management to make certain judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual amounts may differ from these estimates.

 

In preparing these quarterly financial statements the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 30 September 2022.

 

3.      Segment information

 

Operating segments are reported in a manner consistent with the reports made to the chief operating decision maker. It is considered that the role of chief operating decision maker is performed by the Board of Directors.

 

The Group operates globally and for management purposes is organised into reportable segments based on the following business areas:

 

·      Genetics - harnesses industry leading salmon breeding technologies combined with state-of-the-art production facilities to provide a range of year-round high genetic merit ova.

·      Advanced Nutrition - manufactures and provides technically advanced nutrition and health products to the global aquaculture industry.

·      Health - the segment provides health products and services to the global aquaculture market.


3.     Segment information (continued)

 

In order to reconcile the segmental analysis to the consolidated income statement, corporate and inter-segment sales are also shown. Corporate sales represent revenues earned from recharging certain central costs to the operating business areas, together with unallocated central costs.

Measurement of operating segment profit or loss

Inter-segment sales are priced along the same lines as sales to external customers, with an appropriate discount being applied to encourage use of Group resources at a rate acceptable to local tax authorities.  This policy was applied consistently throughout the current and prior period.

 

 Segmental Revenue

 

 

 

 

 

 All figures in £000's

Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

  Genetics 

14,426

13,091

48,907

39,694

58,008

  Advanced Nutrition 

16,067

19,381

61,391

61,414

80,286

  Health 

3,795

3,840

22,872

14,533

20,135

  Corporate 

1,426

1,406

4,299

4,218

5,120

  Inter-segment sales 

(1,447)

(1,446)

(4,340)

(4,340)

(5,272)

  Total 

34,267

36,272

133,129

115,519

158,277

 












 Segmental Adjusted EBITDA

 


 

 


 All figures in £000's

 Q3 2023
(unaudited)

 Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

 YTD Q3 2022
(unaudited)

 FY 2022
(audited)

  Genetics 

3,356

4,816

9,339

10,507

15,980

  Advanced Nutrition 

3,420

2,837

14,886

14,311

19,017

  Health 

(1,022)

(610)

5,628

(517)

108

  Corporate 

(667)

(470)

(2,706)

(1,878)

(3,924)

  Total 

5,087

6,573

27,147

22,423

31,181

 

Reconciliations of segmental information to IFRS measures

 

 

 Reconciliation of Reportable Segments Adjusted EBITDA to Loss before taxation

 All figures in £000's

 Q3 2023
(unaudited)

 Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

 YTD Q3 2022
(unaudited)

 FY 2022
(audited)

 Total reportable segment Adjusted EBITDA 

5,754

7,043

29,853

24,301

35,105

 Corporate Adjusted EBITDA

(667)

(470)

(2,706)

(1,878)

(3,924)

 Adjusted EBITDA 

5,087

6,573

27,147

22,423

31,181

 Exceptional - restructuring, disposal and acquisition related items

(530)

(469)

(3,218)

439

16

 Depreciation and impairment

(4,702)

(5,206)

(13,868)

(15,258)

(19,897)

 Amortisation and impairment

(4,318)

(4,849)

(14,230)

(13,721)

(19,161)

 Net finance costs

(235)

(7,287)

(2,445)

(10,265)

(15,316)

 Loss before taxation

(4,698)

(11,238)

(6,614)

(16,382)

(23,177)

 

 

 

4.     Revenue

 

The Group's operations and main revenue streams are those described in its financial statements to 30 September 2022. The Group's revenue is derived from contracts with customers.

 

Disaggregation of revenue

 

In the following tables, revenue is disaggregated by primary geographical market and by sales of goods and services. The table includes a reconciliation of the disaggregated revenue with the Group's reportable segments (see note 3).

 

Sale of goods and provision of services

 


3 months ended 30 June 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 

 Sale of goods

13,523

16,049

2,259

-

-

31,831

 

 Provision of services

900

-

1,536

-

-

2,436

 

 Inter-segment sales

3

18

-

1,426

(1,447)

-

 

 

14,426

16,067

3,795

1,426

(1,447)

34,267

 

 







 


3 months ended 30 June 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 

 Sale of goods

12,148

19,346

3,598

-

-

35,092

 

 Provision of services

938

-

242

-

-

1,180

 

 Inter-segment sales

5

35

-

1,406

(1,446)

-

 


13,091

19,381

3,840

1,406

(1,446)

36,272

 








 

 

9 months ended 30 June 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 

 Sale of goods

45,727

61,356

15,823

-

-

122,906

 

 Provision of services

3,174

-

7,049

-

-

10,223

 

 Inter-segment sales

6

35

-

4,299

(4,340)

-

 

 

48,907

61,391

22,872

4,299

(4,340)

133,129

 

 







 


9 months ended 30 June 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 

 Sale of goods

36,529

61,339

9,443

-

-

107,311

 

 Provision of services

3,118

-

5,090

-

-

8,208

 

 Inter-segment sales

47

75

-

4,218

(4,340)

-

 


39,694

61,414

14,533

4,218

(4,340)

115,519

 

 

4.     Revenue (continued)

 

Sale of goods and provision of services (continued)

 

 

12 months ended 30 September 2022 (audited)

 

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Sale of goods

53,978

80,191

13,528

-

-

147,697

 Provision of services

3,973

-

6,607

-

-

10,580

 Inter-segment sales

57

95

-

5,120

(5,272)

-


58,008

80,286

20,135

5,120

(5,272)

158,277

 

Primary geographical markets

 


3 months ended 30 June 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

7,190

349

3,155

-

-

10,694

  India

-

671

-

-

-

671

  Turkey

54

1,208

-

-

-

1,262

  Greece

-

1,698

-

-

-

1,698

  Faroe Islands

1,668

-

116

-

-

1,784

  Ecuador

9

1,936

-

-

-

1,945

  United Kingdom

783

27

93

-

-

903

  Chile

332

1

291

-

-

624

 Vietnam

-

2,445

-

-

-

2,445

 Rest of Europe

1,546

767

-

-

-

2,313

 Rest of World

2,841

6,947

140

-

-

9,928

 Inter-segment sales

3

18

-

1,426

(1,447)

-

 

14,426

16,067

3,795

1,426

(1,447)

34,267

 








3 months ended 30 June 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Norway

7,721

328

2,411

-

-

10,460

 India

181

3,208

-

-

-

3,389

 Turkey

-

1,173

-

-

-

1,173

 Greece

2

1,795

-

-

-

1,797

 Faroe Islands

1,325

1

101

-

-

1,427

 Ecuador

18

1,575

-

-

-

1,593

 United Kingdom

363

39

48

-

-

450

 Chile

429

2

96

-

-

527

 Vietnam

-

4,022

-

-

-

4,022

 Rest of Europe

1,591

631

-

-

-

2,222

 Rest of World

1,456

6,572

1,184

-

-

9,212

 Inter-segment sales

5

35

-

1,406

(1,446)

-


13,091

19,381

3,840

1,406

(1,446)

36,272

 


 

4.     Revenue (continued)

 

Primary geographical markets (continued)

 

 

9 months ended 30 June 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

30,251

691

17,607

-

-

48,549

  India

-

7,696

-

-

-

7,696

  Turkey

60

5,940

-

-

-

6,000

  Greece

-

5,969

-

-

-

5,969

  Faroe Islands

4,987

-

464

-

-

5,451

  Ecuador

38

5,508

-

-

-

5,546

  United Kingdom

2,334

54

135

-

-

2,523

  Chile

1,465

12

633

-

-

2,110

 Vietnam

-

7,475

-

-

-

7,475

 Rest of Europe

5,288

4,105

-

-

-

9,393

 Rest of World

4,478

23,906

4,033

-

-

32,417

 Inter-segment sales

6

35

-

4,299

(4,340)

-

 

48,907

61,391

22,872

4,299

(4,340)

133,129

 








9 months ended 30 June 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

23,515

651

11,367

-

-

35,533

  India

581

10,927

-

-

-

11,508

  Turkey

-

5,105

-

-

-

5,105

  Greece

2

5,266

-

-

-

5,268

  Faroe Islands

3,926

7

378

-

-

4,311

  Ecuador

18

3,866

-

-

-

3,884

  United Kingdom

3,219

67

166

-

-

3,452

  Chile

769

7

649

-

-

1,425

 Vietnam

-

10,031

-

-

-

10,031

 Rest of Europe

4,952

3,212

-

-

-

8,164

 Rest of World

2,665

22,200

1,973

-

-

26,838

 Inter-segment sales

47

75

-

4,218

(4,340)

-


39,694

61,414

14,533

4,218

(4,340)

115,519

 


 

4.     Revenue (continued)

 

Primary geographical markets (continued)

 


12 months ended 30 September 2022 (audited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

34,666

965

15,571

-

-

51,202

  India

619

12,001

-

-

-

12,620

  Turkey

-

6,419

-

-

-

6,419

  Greece

2

6,197

-

-

-

6,199

  Faroe Islands

5,465

9

587

-

-

6,061

  Ecuador

18

6,472

-

-

-

6,490

  United Kingdom

4,318

93

199

-

-

4,610

  Chile

1,006

15

871

-

-

1,892

 Vietnam

-

10,512

-

-

-

10,512

 Rest of Europe

7,110

4,056

-

-

-

11,166

 Rest of World

4,747

33,452

2,907

-

-

41,106

 Inter-segment sales

57

95

(0)

5,120

(5,272)

(0)


58,008

80,286

20,135

5,120

(5,272)

158,277

 

 

5.     Exceptional - restructuring, disposal, and acquisition related items

 

Items that are material because of their size or nature, non-recurring and whose significance is sufficient to warrant separate disclosure and identification within the consolidated financial statements are referred to as exceptional items. The separate reporting of exceptional items helps to provide an understanding of the Group's underlying performance.

 

 

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

 Acquisition related items


579

-

579

-

-

 Exceptional restructuring costs


153

508

2,826

606

1,229

 (Income)/cost in relation to disposals


(201)

(39)

(186)

(1,045)

(1,245)

Total exceptional items


530

469

3,218

(439)

(16)

 

Acquisition related items comprise fees incurred in the period in connection with an aborted acquisition.                                                                       

                                                                                      

Exceptional restructuring costs include £43,000 for the quarter (Q3 2022: £331,000) and £2,580,000 YTD (Q3 YTD 2022: £371,000) of legal and professional costs in relation to preparing for listing the Group on the Oslo stock exchange, and £110,000 for the quarter (Q3 2022: £177,000) and £246,000 YTD (Q3 YTD 2022: £235,000) relating to other restructuring costs.                                                                           

                                                                                      

(Income)/costs in relation to disposals in the quarter and YTD relate to a credit of £235,000 (Q3 2022: £294,000 credit; Q3 YTD 2022: £1,202,000) due to higher than anticipated deferred consideration received from subsidiary company disposals made in 2020 offset by £34,000 (Q3 2022: £255,000) in Q3 and £49,000 in the year to date (Q3 YTD 2022: £157,000) of other disposal costs.

6.     Net finance costs

All figures in £000's

Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

Interest received on bank deposits

155

9

472

238

319

Foreign exchange gains on financing activities

158

-

158

-

4,422

Foreign exchange gains on operating activities

1,363

114

6,409

171

-

Cash flow hedges - reclassified from OCI

273

19

565

-

-

Cash flow hedges - ineffective portion of changes in fair value

798

-

3,158

-

-

Finance income

2,746

141

10,762

409

4,741

Leases (interest portion)

(390)

(24)

(1,262)

(717)

(1,744)

Cash flow hedges - reclassified from OCI

-

-

-

(159)

(2,546)

Cash flow hedges - ineffective portion of changes in fair value

-

(2,318)

-

(1,562)

(4,475)

Foreign exchange gains on financing activities

-

(1,542)

-

(1,984)

-

Foreign exchange losses on operating activities

(175)

(1,683)

(6,034)

(777)

(1,620)

Interest expense on financial liabilities measured at amortised cost

(2,416)

(1,863)

(5,911)

(5,475)

(9,672)

Finance costs

(2,981)

(7,428)

(13,207)

(10,674)

(20,057)

Net finance costs recognised in profit or loss

(235)

(7,287)

(2,445)

(10,265)

(15,316)

 

7.     Taxation

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

 







Analysis of charge in period







Current tax:

 






Current income tax expense on profits for the period


823

2,596

3,658

7,603

11,727

Adjustment in respect of prior periods


-

-

-

-

(39)

Total current tax charge


823

2,596

3,658

7,603

11,688

 







Deferred tax:

 






Origination and reversal of temporary differences


(899)

(1,012)

(2,251)

(2,403)

(4,414)

Deferred tax movements in respect of prior periods


-

-

-

-

-

Total deferred tax credit

 

(899)

(1,012)

(2,251)

(2,403)

(4,414)



 


 

-

-

Total tax (credit)/charge


(76)

1,584

1,407

5,200

7,274

 


 

8.     Loss per share

 

Basic loss per share is calculated by dividing the loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

Loss attributable to equity holders of the parent (£000)

(5,153)

(13,394)

(9,294)

(22,526)

(32,087)

Weighted average number of shares in issue (thousands)

739,300

703,961

729,437

696,303

698,233

Basic loss per share (pence)

(0.70)

(1.90)

(1.27)

(3.24)

(4.60)

 

 

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. This is done by calculating the number of shares that could have been acquired at fair value (determined as the average market price of the Company's shares for the period) based on the monetary value of the subscription rights attached to outstanding share options and warrants. The number of shares calculated above is compared with the number of shares that would have been issued assuming the exercise of the share options and warrants.

                                                                    

Therefore, the Company is required to adjust the earnings per share calculation in relation to the share options that are in issue under the Company's share-based incentive schemes, and outstanding warrants. However, as any potential ordinary shares would be anti-dilutive due to losses being made there is no difference between Basic loss per share and Diluted loss per share for any of the periods being reported.

 

A total of 5,988,043 potential ordinary shares have not been included within the calculation of statutory diluted loss per share for the year (30 September 2022: 6,240,304 and 30 June 2022: 5,066,469). These potential ordinary shares could dilute earnings/loss per share in the future.

 

9.     Assets held for sale

 

This property was transferred to assets held for sales at £850,000, which is the book value and market value.

 

 

Assets held for sale

 

Transferred to held for sale

Fair value adjustment

Total assets transferred

All figures in £000's


Property, plant and equipment


850

-

850

Total Assets held for sale

 

850

-

850

 

 

10.   Loans and borrowings

 


YTD Q3 2023

YTD Q3 2022

FY 2022

All figures in £000's

(unaudited)

(unaudited)

(audited)

Non-Current

 



2025 750m NOK Loan notes

53,382

-

61,054

2023 850m NOK Loan notes

-

78,172

-

Bank borrowings

15,746

17,771

17,226

Lease liabilities

8,832

17,151

14,765


77,960

113,094

93,045

Current

 



Bank borrowings

9,439

1,583

5,569

Lease liabilities

12,318

12,643

11,522


21,757

14,226

17,091

Total loans and borrowings

99,717

127,320

110,136

 

On 27 September 2022, the Group successfully issued a new unsecured floating rate listed green bond of NOK 750m. The bond which matures in September 2025, has a coupon of three-month NIBOR + 6.50% p.a. with quarterly interest payments, and is to be listed on the Oslo Stock Exchange. The proceeds were used to repay its existing NOK 850m floating rate listed bond, originally raised in June 2019.

 

On 21 November 2022, the Group refinanced its USD15m RCF, which was provided by DNB Bank ASA (50%) and HSBC UK Bank PLC (50%), with a secured GBP20m RCF provided by DNB Bank ASA, maturing on 27 June 2025. The margin on this facility is a minimum of 2.75% and a maximum of 3.25%, dependent upon the leverage of the Group above the relevant risk-free reference or IBOR rates depending on which currency is drawn.

 

On 15 February 2023, the Group drew down €9,000,000 on the GBP20,000 RCF. On 16 June 2023 this was repaid by a further draw down from the RCF of £7,750,000, leaving £12,250,000 undrawn as at 30 June 2023.

 

Additionally on 1 November 2022, the Group's Nordea Bank term loan of NOK 165.6m, which had a term loan of five years ending in November 2023 and interest rate of 2.5% above three month NIBOR, was refinanced together with an existing undrawn overdraft facility into a new loan facility of NOK 179.5m with a new maturity date in a further five years no later than 15 January 2028. Other terms of this facility remain the same.


 

11.   Share capital and additional paid-in share capital

 


Number

Share Capital

Additional paid-in
share capital

Allotted, called up and fully paid

 

£000

£000

Ordinary shares of 0.1 pence each

 



Balance at 30 September 2022

703,960,798

704

420,824

Shares issued through placing and open offer

35,189,350

35

10,839

Cancellation of part of the share premium account



(394,235)

Exercise of share options

127,321

-

-

Balance at 30 June 2023

739,277,469

739

37,428

 

 

On 15 December 2022, the Company issued 35,189,350 new ordinary shares of 0.1 pence each by way of a placing and subscriptions at an issue price of 37.0 pence per share. Gross proceeds of £13.0m were received for the placing and subscription shares. Non-recurring costs of £2.1m were in relation to the share issue and this has been charged to the share premium account (presented within additional paid-in share capital).

 

The share premium account is used to record the aggregate amount of value of the premiums paid when the Company's shares are issued/redeemed at a premium. On 20 March 2023, part of the Company's share premium account was cancelled following the confirmation of the capital reduction by the High Court of England and Wales on 14 March 2023 and the subsequent registration of the court order with the Registrar of Companies. The capital reduction created additional distributable reserves to the value of £394,235,072.

 

 

12.   Alternative performance measures and other metrics

 

Management has presented the performance measures EBITDA, Adjusted EBITDA, Adjusted EBITDA before fair value movement in biological assets, Adjusted Operating Profit and Adjusted Profit Before Tax because it monitors performance at a consolidated level using these and believes that these measures are relevant to an understanding of the Group's financial performance.

 

Adjusted EBITDA which reflects underlying profitability, is earnings before interest, tax, depreciation, amortisation, impairment, and exceptional items and is shown on the Income Statement.

 

Adjusted EBITDA before fair value movements in biological assets, which is Adjusted EBITDA before the non-cash fair value movements in biological assets arising from their revaluation in line with International Accounting Standards.

 

Adjusted Operating Profit is operating loss before exceptional items and amortisation and impairment of intangible assets excluding development costs as reconciled below.

 

Adjusted Profit Before Tax is earnings before tax, amortisation and impairment of intangibles assets excluding development costs, and exceptional items as reconciled below. These measures are not defined performance measures in IFRS. The Group's definition of these measures may not be comparable with similarly titled performance measures and disclosures by other entities.

12.  Alternative performance measures and other metrics (continued)

 

Reconciliation of Adjusted Operating Profit to Operating Loss

 

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

Revenue

 

34,267

36,272

133,129

115,519

158,277

Cost of sales


(16,990)

(16,799)

(66,807)

(56,524)

(75,149)

Gross profit

 

17,277

19,473

66,322

58,995

83,128

Research and development costs


(1,496)

(1,426)

(4,494)

(4,663)

(6,691)

Other operating costs


(10,639)

(11,464)

(34,682)

(31,371)

(44,661)

Depreciation and impairment


(4,702)

(5,206)

(13,868)

(15,258)

(19,897)

Amortisation of capitalised development costs


(606)

(605)

(1,833)

(1,550)

(2,165)

Share of loss of equity accounted investees net of tax


(55)

(10)

1

(538)

(595)

Adjusted operating (loss)/profit

 

(221)

762

11,446

5,615

9,119

Exceptional - restructuring, disposal and acquisition related items


(530)

(469)

(3,218)

439

16

Amortisation and impairment of intangible assets excluding development costs


(3,712)

(4,244)

(12,397)

(12,171)

(16,996)

Operating loss


(4,463)

(3,951)

(4,169)

(6,117)

(7,861)

 

 

Reconciliation of Loss Before Taxation to Adjusted Profit Before Tax

 

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

 







Loss before taxation

 

(4,698)

(11,238)

(6,614)

(16,382)

(23,177)

Exceptional - restructuring, disposal and acquisition related items


530

469

3,218

(439)

(16)

Amortisation and impairment of intangible assets excluding development costs


3,712

4,244

12,397

12,171

16,996

Adjusted (loss)/profit before tax


(456)

(6,525)

9,001

(4,650)

(6,197)

 

Other Metrics

All figures in £000's


Q3 2023
(unaudited)

Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

YTD Q3 2022
(unaudited)

FY 2022
(audited)

Total R&D Investment

 






Research and development costs


1,496

1,426

4,494

4,663

6,691

Internal capitalised development costs


183

192

380

1,596

1,708

Total R&D investment


1,679

1,618

4,874

6,259

8,399

 







All figures in £000's


 Q3 2023
(unaudited)

 Q3 2022
(unaudited)

YTD Q3 2023
(unaudited)

 YTD Q3 2022
(unaudited)

 FY 2022
(audited)

Adjusted EBITDA excluding fair value movement in biological assets

 






Adjusted EBITDA


5,087

6,573

27,147

22,423

31,181

Exclude fair value movement


(1,457)

(1,437)

(1,704)

(2,442)

(1,595)

Adjusted EBITDA excluding fair value movement in biological assets


3,630

5,136

25,443

19,981

29,586

 

 

 

12.  Alternative performance measures and other metrics (continued)

 

Liquidity

 

A key financial covenant is a minimum liquidity of £10m, defined as cash plus undrawn facilities.

 




30 June 2023

All figures in £000's


(unaudited)

Cash and cash equivalents


32,858

Undrawn bank facility


12,250



45,108

 

The undrawn bank facility relates to the RCF facility.  At 30 June 2023, £7.8m of the RCF was drawn (30 September 2022: £4m and 31 March 2022: £nil), leaving £12.3m undrawn (30 September 2022: £9.4m and 31 March 2022: £nil).

 

 

13.   Net debt

Net debt is cash and cash equivalents less loans and borrowings.




30 June 2023


30 June 2022


30 September 2022

All figures in £000's


(unaudited)

(unaudited)

(audited)

Cash and cash equivalents


32,858

38,179

36,399

Loans and borrowings (excluding lease liabilities) - current


(9,439)

(1,583)

(5,569)

Loans and borrowings (excluding lease liabilities) - non-current


(69,128)

(95,943)

(78,280)

Net debt excluding lease liabilities


(45,709)

(59,347)

(47,450)

Lease liabilities - current


(12,318)

(12,643)

(11,522)

Lease liabilities - non-current


(8,832)

(17,151)

(14,765)

Net debt


(66,859)

(89,141)

(73,737)

 


 

14.   Business combinations and transactions in subsidiary companies

In June, the Group acquired 66% of the issued share capital of Baggfossen Mikrokraft AS to bring the total owned to 100% for consideration of £48,000. The goodwill has been impaired in the period. The following table shows the consideration paid and the fair value of the assets acquired.

 


Total


£000

Consideration

 

Cost of investment

48



Satisfied by:

 

Cash

48

Total consideration

48



Fair value of assets acquired

 

Fixed assets

307

Accounts Receivable

(13)

Other receivables

1

Financial instrument - interest rate swap

10

Accounts payable

(1)

Other current liabilities - advance from customers

(3)

Bank loan

(235)

Advance from Salten Stamfisk

(10)

Advance from BG Salten

(12)

Total identifiable net assets

44

Goodwill

4



 

On 15 February 2023, the Group purchased the minority interest's shareholding of 14,981,272 shares in Benchmark Genetics Iceland HF for €9,000,000. Following this acquisition, Benchmark Genetics Limited, a subsidiary of Benchmark Holdings PLC, now owns 100% of the share capital of Benchmark Genetics Iceland HF.

On 6 February 2023, the Group exercised the put/call option in place to purchase the final 20% of Benchmark Genetics USA Inc for 1 NOK.

On 11 May 2023, the Group received £1,250,000 as the final part of the deferred consideration for Improve International Limited and its subsidiaries which was sold in June 2020.

 

 

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