RNS Number : 2677ABenchmark Holdings PLC23 May 2023

Information within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014 and Article 7 of the UK version of EU Regulation 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018.

23 May 2023

Benchmark Holdings plc

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

Second Quarter and Interim results for the six months ended 31 March 2023

Strong Q2 and H1 results continuing track record of quarterly growth and strategic delivery

Benchmark (LSE: BMK), the aquaculture biotechnology company, announces its unaudited interim results for the six months ended 31 March 2023 (the "Period" or "H1 FY23"). The Company also announces its unaudited results for the three months ended 31 March 2023 ("Q2 FY23") in compliance with the terms of its unsecured Green bond.

Financial highlights

·    Excellent H1 FY23 results driven by good performance in all business areas:

o  25% growth in revenues to £98.9m (H1 FY22: £79.2m)

o  39% increase in Adj. EBITDA to £22.1m (H1 FY22: £15.9m)

o  47% increase in Adj. EBITDA excluding fair value ("FV") movement in biological assets to £21.8m (H1 FY22: £14.8m):

§ Adj. EBITDA margin excluding FV movement in biological assets increased to 22% (H1 FY22: 19%)

o  193% increase in Adj. Operating profit excluding FV movement in biological assets to £11.4m (H1 FY22: £3.9m)

o  Further reduction in loss before tax

o  Operating cash inflow £9.5m (H1 FY22: cash inflow of £2.0m)

·    Strong Q2 FY23 performance building on track record of continuous quarterly improvement:

o  Revenues +13% to £44.4m (Q2 FY22: £39.2m)

o  Adj. EBITDA +32% to £11.1m (Q2 FY22: £8.4m); Adj. EBITDA margin of 25% in line with medium term target set in May 2022

o  Adj. EBITDA excluding FV movement in biological assets +32% to £9.7m (Q2 FY22: £7.3m); Adj. EBITDA margin excluding FV movement in biological assets of 22% (Q2 2022: 19%)

o  Adj. Operating profit excluding fair value movement in biological assets +244% to £4.5m (Q2 FY22: £1.3m)

·    Net debt (excluding lease liabilities) continues to reduce to £44.5m (30 September 2022: £47.5m; 31 March 2022: £50.6m):

o  Cash of £41.9m and liquidity (cash and available facility) of £53.9m at 22 May 2023

Business Area highlights

·    Genetics - strong performance in core salmon business and strategic progress in growth areas:

o  H1 FY23 Revenues +30% driven by higher salmon sales from Norway and Iceland; 181m salmon eggs sold (H1 FY22: 134m)

o  Continued commercial progress in Chile with new customer wins

o  Obtained "disease free compartment status" from the Chilean regulator, an important biosecurity endorsement which will enable the Company to export salmon eggs from Chile

o  Completed configuration at Salten, Norway facility to reach 150m salmon eggs production capacity from FY24 (currently 140m), ahead of plan

o  Total salmon egg capacity now 400m eggs, comprising 150m in Norway, 200m in Iceland and 50m in Chile

o  Strengthened scientific team to progress positioning on new technologies; enhanced genotyping capabilities

·    Advanced Nutrition - strong performance despite soft shrimp markets demonstrates success of commercial focus and agile operation:

o  Marginally lower revenues in Q2 FY23 albeit 8% higher revenues for H1 FY23 as a whole  

o  Strong performance in marine fish species which represent c.25% of revenues

o  Uplift in shrimp market expected as inventory levels normalise along the global supply chain and consumer confidence improves

·    Health - strong result from combined sea lice product portfolio and integrated commercial team:

o  Continuing adoption of Ectosan® Vet and CleanTreat® supported by excellent efficacy resulting in H1 FY23 sales of £12.9m, up 50% on last year

o  Progress on development of streamlined integrated CleanTreat® infrastructure with partners MMC and Salt Ship Design

o  Strong sales of Salmosan® Vet driven by success of new marketing label

Current trading and outlook

·    On track to deliver strong growth for the year in line with market expectations:

o  Good visibility of salmon egg sales from Norway and Iceland

o  Market conditions in shrimp are expected to remain unchanged in the short term; well positioned for resilience and market share wins. Positive backdrop in the Mediterranean marine fish market

o  Expect Q3 FY23 sales from Ectosan® Vet and CleanTreat® to reflect low sea lice treatment season, thereafter increasing in Q4 FY23

·    Update on Oslo Børs uplisting:

o  Consultation with shareholders regarding a potential delisting from AIM and uplisting to Oslo Børs completed

o  Plan to maintain a dual listing on Euronext Growth Oslo and on AIM for the foreseeable future. Uplisting to Oslo Børs will be reviewed as part of ongoing strategy to enhance Group positioning and share performance

£m

H1 FY23

H1 FY22

% CER

H1 FY23

Q2 FY23

Q2 FY22

% CER

Q2 FY23

Revenue

98.9

+25%

79.2

+19%

44.4

+13%

39.2

+9%

Adjusted







Adjusted EBITDA1

22.1

+39%

15.9

+36%

11.1

+32%

8.4

+28%

Adj. EBITDA excluding biological asset fair value movements

21.8

+47%

14.8

+42%

9.7

+32%

7.3

+28%

Adjusted Operating profit2

11.7

+138%

4.9

+130%

5.9

+145%

2.4

+134%

Adj. Operating profit excluding biological asset fair value movements

11.4

+193%

3.9

180%

4.5

+244%

1.3

220%

Statutory







Operating profit/(loss)

0.3

+114%

(2.2)

+97%

0.4

+159%

(0.7)

+122%

Loss before tax

(1.9)

+63%

(5.1)

+65%

(2.0)

-38%

(1.5)

-56%

Basic loss per share (p)

(0.57)

(1.32)


(0.40)

(0.54)


Net debt3

(66.3)

(81.4)


(66.3)

(81.4)


Net debt3 excluding lease liabilities

(44.5)

(50.6)


(44.5)

(50.6)


Business Area summary

£m

H1 FY23

H1 FY22

%CER*

H1 FY23

Q2 FY23

Q2 FY22

     % CER*

Q2 FY23

Revenue





Advanced Nutrition

45.3

+8%

42.0

-4%

22.6

-1%

23.0

-10%

Genetics

34.5

+30%

26.6

+31%

13.0

+14%

11.4

+16%

Health

19.1

+78%

10.7

+79%

8.7

+77%

4.9

+78%

Adjusted EBITDA1




Advanced Nutrition

11.5

0%

11.5

-9%

6.2

-14%

7.2

-21%

Genetics

6.0

5%

5.7

+16%

3.4

+41%

2.4

+51%

-       Net of fair value movements in biological assets

5.7

+22%

4.7

+32%

2.0

+52%

1.3

+67%

Health

6.6

+7,034%

0.1

+6,957%

2.6

+669%

(0.5)

+663%

*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:

"Benchmark had an excellent first half, delivering double digit growth. We continue to focus on achieving profitability and cash generation whilst making good progress towards our medium-term objectives; we remain on track to deliver strong growth for the year in line with market expectations.

"Our fundamentals are strong and we have significant opportunities to continue building our track record of consistent growth. Aquaculture is a growth industry, supported by robust megatrends. Benchmark is well positioned to play an important role in helping the aquaculture industry deliver sustainable growth and meet the needs of a rising population."

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 Pareto Securities offices in Oslo at Dronning Mauds gate 3, N‑0250 Oslo, Norway. If you would like to attend in person, please contact Thea Naess at [email protected].

A live webcast of the presentation will be available for analysts and investors to join remotely at the following link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20230523_3

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-

2qresults-presentation-23may2023

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

Trond Williksen, CEO

Septima Maguire, CFO

Ivonne Cantu, Investor Relations

[email protected]

Numis (Broker and NOMAD)

Freddie Barnfield, Duncan Monteith, Sher Shah

Tel:  020 7260 1000

MHP

Katie Hunt, Reg Hoare, Veronica Farah

Tel:  020 3128 899

[email protected]

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, animal health and welfare.

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


Management Report

Benchmark delivered an excellent performance in the first half of the year continuing to build on its track record of consistent quarterly increase in revenues and underlying profitability. Revenues were up 25% (19% at constant currency) reaching £98.9m, and Adjusted EBITDA excluding fair value movements from biological assets at £21.8m was up 47% (42% at constant currency) against H1 FY22, translating into an Adjusted EBITDA margin excluding fair value movements of 22% (H1 FY22: 19%). Adjusted EBITDA increased by 39% (36% at constant currency) in the six-month period. The increase in Adjusted EBITDA excluding fair value movements from biological assets derives primarily from higher revenues, supported by ongoing cost control and operational leverage.

Higher revenues were reported across all business areas with Genetics revenues increasing by 30%, Advanced Nutrition 8% and Health 78%.  In Health and Genetics, the impact from foreign currencies was not material, with revenue growth at constant currency broadly in line with actual revenue growth.  Advanced Nutrition sales were aided by forex tailwinds, and revenue fell slightly (-4%) in constant currency terms.  Operating costs in H1 FY23 were £24.0m, a 21% increase from the prior year. The increase reflects higher activity levels and inflationary pressure.  R&D expenses at £3.0m, were 7% below H1 FY22 and total R&D investment including capitalised development costs was £3.2m, 30% below the prior year (H1 FY22: £4.6m).

Depreciation and amortisation were marginally above the prior year at £19.1m (H1 FY22: £18.9m). Together with the increase in EBITDA, this led to an improvement at Operating Profit level to £0.3m (H1 FY22: -£2.2m loss). Adjusted Operating Profit excluding fair value movements from biological assets increased by 193% to £11.4m. Taking into consideration conditions in the end markets, performance was strong across all business areas.

Net finance costs for H1 FY23 were £2.2m (H1 FY22: £3.0m).  The reduction arises due to a credit of £2.7m arising in H1 relating to the ineffective portion of the movement in the fair value of derivative financial instruments, offset by higher forex losses in the period.

Loss before tax in H1 FY23 was £1.9m (H1 FY22: £5.1m). This included the impact of significant exceptional costs in the period of £2.7m, largely incurred in legal and professional costs in relation to the preparations for listing the Group on the Oslo Børs. The figure contrasted with a £0.9m net credit in H1 FY22 which included a credit of £1.2m for additional contingent consideration received from disposals in previous years.

Total tax charge in H1 FY23 was £1.5m (H1 FY22: £3.6m) reflecting a change in the mix in the territories in which the profits have been made, with losses available to shelter profits in some territories.  Loss after tax was £3.4m (H1 FY22: £8.8m loss).

The Group reported a net operating cash inflow of £9.5m after an increase in working capital of £4.2m (H1 FY22: £13.5m) and tax payments of £4.1m (H1 FY22: £3.0m). The increase in working capital is somewhat seasonal, but the much lower increase year on year, in the context of increased activity, results from our strong focus on managing our working capital closely towards our goal of achieving positive cash generation.

Net cash outflow from investing activities was £11.5m (H1 FY22: £6.6m) of which £8.0m related to the acquisition of the remaining minority stake in Benchmark Genetics Iceland completed in February 2023.  PPE capex was £3.3m (H1 FY22: £5.1m).

Net cash inflow from financing activities of £6.8m (H1 FY22: £10.7m), includes an equity raise of (net) £13.0m, net proceeds from debt refinancing of £4.2m, and £4.7m of lease payments (H1 FY22: £4.8m). Interest charges in the period were £4.0m (H1 FY22: £3.8m), as the higher cost of borrowing offset the lower level of borrowings outstanding in the period. Our cash position at the end of the period was £38.6m (H1 FY22: £46.3m), and net debt including lease liabilities was £66.3m (H1 FY22: £81.4m).

Advanced Nutrition

Advanced Nutrition delivered a strong result despite soft shrimp markets in the first half of the year demonstrating the success of a renewed commercial focus and agile operation. Revenues for the first half were up 8% at £45.3m while Adjusted EBITDA was flat against the same period in the previous year at £11.5m.

Softness in the shrimp markets resulted from subdued demand from key import markets, inventory levels across the supply chain and higher input costs, primarily in South East Asia, while Ecuador was more robust.  We expect an uplift in shrimp production as consumer confidence picks up and inventory levels normalise. Conditions in the marine fish sector were positive partially offsetting softness in the shrimp market.  

In transactional currency, by product area, Artemia sales were up 3% and Health sales were up by 22% while Diets saw a 14% decrease.  On the same basis by region, Asia Pacific and South East Asia were most affected by conditions in the shrimp market leading to a reduction in sales of 13% and 19% respectively. Conversely, the Americas reported growth of 8% while sales in Europe increased 6%. 

With a leading position in the market, deep customer relations, operational agility and commercial focus our Advanced Nutrition business is well placed to mitigate the temporary weakness and take every opportunity to strengthen our position in the market.

Genetics

Genetics delivered strong performance in the first half of the year with revenues of £34.5m, 30% above the prior year (H1 FY22: £26.6m) driven by higher salmon egg sales and harvest revenues. Adjusted EBITDA for H1 FY23 excluding fair value movements of biological assets was £5.7m, 22% ahead of the prior year (H1 FY22: £4.7m). Including fair value movements Adjusted EBITDA for the first half was £6.0m, 5% ahead of the same period last year.

Revenues from salmon eggs increased by 45% driven by Norway and Iceland, while harvest revenues grew by 9%.  We made commercial progress in Chile with new customer wins.  In addition, we obtained "disease free compartment status" from the Chilean regulator, Senapesca. This is an important biosecurity endorsement which will enable the Company to export salmon eggs from Chilethereby opening new avenues to utilise our installed capacity.

In Q2 we completed the configuration of the Salten facility, to reach 150m salmon egg capacity (currently 140m eggs) which will be in place from FY24 onwards. This marks the end of an investment journey where the Company has increased its total salmon egg capacity to 400m eggs, comprising 150m in Salten, Norway, 200m in Iceland and 50m in Chile.

In shrimp we continued our efforts to enhance and tailor genetic traits to local markets and trials in local markets are underway.  We have decreased the intensity of our commercial efforts while the trials are ongoing. Shrimp sales were £0.7m in the period (H1 FY22: £0.8m).

Innovation is a core component of our Genetics strategy and we continue to strengthen our capability in the team. We have also enhanced our capacity for genotyping, reducing the costs for our own programmes and enabling us to offer genotyping as part of our offering in genetics services.

During the period the Company acquired the remaining 10.52% minority interest in its subsidiary Benchmark Genetics Iceland ensuring Benchmark receives the full benefit from its successful salmon genetics business in Iceland. Benchmark Genetics Iceland represents c.50% of the Group's 400m salmon egg capacity.

Health

Revenues in H1 FY23 increased to £19.1m (H1 FY22: £10.7m) with higher sales from both Ectosan® Vet and CleanTreat® and Salmosan® Vet.  Ectosan® Vet and CleanTreat® sales were £12.9m (H1 FY22: £8.6m) of which £4.5m (H1 FY22: £2.2m) related to recharging of vessel and fuel costs. There is growing adoption of our highly efficacious sea lice solution and we continue to work with our partners MMC and Salt Ship Design to develop a streamlined infrastructure for CleanTreat® which will further facilitate adoption in the market. 

Salmosan® Vet sales were £6.2m, 192% ahead of the prior year supported by the success of a new marketing label.  

Adjusted EBITDA for the business area was £6.6m (H1 FY22: £0.1m). 

Q2 FY23 commentary

The Group reported revenue of £44.4m, 13% above prior year of £39.2m. This was driven by revenue growth in Health and Genetics which reported revenue +77% and +14% higher than Q2 FY22 respectively. Revenues in Advanced Nutrition were marginally down -1% driven by low current demand in the shrimp markets as mentioned above. 

Adjusted EBITDA excluding fair value uplift from biological assets was £9.7m, 32% ahead of the prior year and 28% higher on a constant currency basis (Q2 FY22: £7.3m), reflecting higher revenues, operational leverage and good cost control. By business area, Health was up more than sixfold, Genetics was up 52% while Advanced Nutrition reported a decrease in Adjusted EBITDA of 14%, despite forex tailwinds mitigating the reduction.

Operating costs of £12.3m were 23% above last year (Q2 FY22: £10.0m) driven by increased activity and inflationary pressure. R&D expenses of £1.4m were 10% below the prior year (Q2 FY22: £1.6m) and represented 3% of Group revenues (Q2 FY22: 4%).  Depreciation and amortisation was £9.0m (Q2 FY22: £10.0m), leading to a Group operating profit of £0.4m (Q2 FY22: £0.7m loss).

Net finance costs of £2.4m for the quarter were £1.6m higher than the same period last year (Q2 FY22: £0.8m), mainly due to forex losses of £0.7m (Q3 FY22: gain of £0.6m) in the period.

The tax charge of £0.7m (Q2 FY22: £2.2m) reflects a change in the mix of territories in which taxable profits were made, leading loss after tax for the quarter at £2.7m (Q2 FY22: loss of £3.7m).


Update on Oslo Børs listing

As previously announced, the Company conducted a consultation with shareholders regarding a potential delisting from AIM and uplisting to the Oslo Børs. Based on the feedback received the Board has decided to maintain its current listings on Euronext Growth Oslo and on AIM for the foreseeable future. 

The Board continues to believe that in the medium term the company could benefit from uplisting to the Oslo Børs as the leading venue for seafood and aquaculture companies. An uplisting will be reviewed as part of the Group's ongoing strategy to enhance the Group's positioning and shareholder value.

Outlook and current trading

The Group had an excellent first half, delivering 25% growth in revenues and trading in line with market expectations. We continued to focus on achieving profitability and cash generation whilst making good progress towards our medium-term objectives.

The Group communicated its medium term (3-5 year) financial objectives in May 2022 and since then has reported significant progress as shown in the table below:


Medium term objective

FY21

FY22

H123

Revenue Growth per annum

15-18%

18%

27%

25%

Adj. EBITDA Margin

25-30%

(period end)

16%

20%

22%

Cashflow conversion ratio1

70-80%

30%

35%

43%

Free cashflow as % of sales2

10-15%

(17%)

(8%)

1%

1.        Cash generated from operations after working capital and taxes as percentage of Adj. EBITDA 

2.        Free cash flow: Net cash from operating activities less capex and lease payments (excluding cash interest)

Looking forward to the second half of the year there is good visibility of salmon egg sales in Genetics and we will continue to progress our growth vectors of salmon in Chile and shrimp genetics, which will be key areas of focus in the coming periods.  In Advanced Nutrition we expect conditions in the shrimp market to remain unchanged in the short term and while this poses a challenge to growth, we are confident that we have a leading and dynamic organisation capable of mitigating the impact from market conditions whilst taking advantage to increase our market share where possible. In Health, we expect Q3 sales to reflect the seasonally low sea lice treatment season, thereafter increasing in Q4.

Our fundamentals are strong and we have significant opportunities to continue building our track record of consistent growth. Since completing the Group's restructuring in 2020 we have delivered a 62% increase in revenue and 117% increase in Adj. EBITDA, whilst steadily reducing net debt. Aquaculture is a growth industry, supported by robust megatrends. As a leading aquaculture biotechnology company, Benchmark is well positioned to play an important role in helping the aquaculture industry deliver sustainable growth and meet the needs of a rising population.

Benchmark Holdings plc

Consolidated Income Statement for the period ended 31 March 2023


All figures in £000's

Notes

Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

Revenue

4

44,367

39,233

98,862

79,247

158,277

Cost of sales


(19,549)

(19,210)

(49,817)

(39,725)

(75,149)

Gross profit

24,818

20,023

49,045

39,522

83,128

Research and development costs


(1,435)

(1,590)

(2,998)

(3,237)

(6,691)

Other operating costs


(12,290)

(9,984)

(24,043)

(19,907)

(44,661)

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


-

(24)

56

(528)

(595)

Adjusted EBITDA²

11,093

8,425

22,060

15,850

31,181

Exceptional - restructuring, disposal and acquisition related items

5

(1,716)

908

(2,688)

908

16

EBITDA¹

9,377

9,333

19,372

16,758

31,197

Depreciation and impairment


(4,551)

(5,557)

(9,166)

(10,052)

(19,897)

Amortisation and impairment


(4,410)

(4,484)

(9,912)

(8,872)

(19,161)

Operating profit/(loss)

416

(708)

294

(2,166)

(7,861)

Finance cost


(3,223)

(2,684)

(10,353)

(4,747)

(20,057)

Finance income


791

1,930

8,143

1,769

4,741

Loss before taxation

(2,016)

(1,462)

(1,916)

(5,144)

(23,177)

Tax on loss

6

(704)

(2,189)

(1,483)

(3,616)

(7,274)

Loss for the period


(2,720)

(3,651)

(3,399)

(8,760)

(30,451)

Loss for the period attributable to:






-Owners of the parent


(2,858)

(3,775)

(4,141)

(9,132)

(32,087)

- Non-controlling interest


138

124

742

372

1,636


(2,720)

(3,651)

(3,399)

(8,760)

(30,451)







Earnings per share






Basic loss per share (pence)

7

(0.40)

(0.54)

(0.57)

(1.32)

(4.60)

Diluted loss per share (pence)

7

(0.40)

(0.54)

(0.57)

(1.32)

(4.60)

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

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

Benchmark Holdings plc

Consolidated Statement of Comprehensive Income for the period ended 31 March 2023

All figures in £000's


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)







Loss for the period

(2,720)

(3,651)

(3,399)

(8,760)

(30,451)

Other comprehensive income






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






Foreign exchange translation differences


(5,973)

9,812

(24,013)

7,201

47,606

Cash flow hedges - changes in fair value


217

3,082

(299)

2,948

2,627

Cash flow hedges - reclassified to profit or loss


(179)

63

(292)

178

2,546

Total comprehensive income for the period


(8,655)

9,306

(28,003)

1,567

22,328







Total comprehensive income for the period attributable to:






- Owners of the parent


(8,295)

8,784

(28,046)

836

20,326

- Non-controlling interest


(360)

522

43

731

2,002


(8,655)

9,306

(28,003)

1,567

22,328

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

Benchmark Holdings plc

Consolidated Balance Sheet as at 31 March 2023




31 March 2023


31 March 2022


30 September 2022

All figures in £000's

Notes

(unaudited)

(unaudited)

(audited)

Assets




Property, plant and equipment


76,414

81,568

81,900

Right-of-use assets


22,365

31,360

27,034

Intangible assets


215,077

226,912

245,264

Equity-accounted investees


3,136

2,821

3,113

Other investments


14

15

15

Biological and agricultural assets


20,605

17,089

20,878

Non-current assets


337,611

359,765

378,204

Inventories


27,129

22,140

29,813

Biological and agricultural assets


22,550

24,294

25,780

Trade and other receivables


48,433

47,275

56,377

Cash and cash equivalents


38,647

46,294

36,399

Current assets


136,759

140,003

148,369

Total assets


474,370

499,768

526,573

Liabilities




Trade and other payables


(29,723)

(33,284)

(44,324)

Loans and borrowings

8

(22,115)

(13,546)

(17,091)

Corporation tax liability


(8,413)

(7,733)

(10,211)

Provisions


(1,574)

(551)

(1,631)

Current liabilities


(61,825)

(55,114)

(73,257)

Loans and borrowings

8

(82,878)

(114,185)

(93,045)

Other payables


(6,257)

(936)

(8,996)

Deferred tax


(24,293)

(27,524)

(27,990)

Non-current liabilities


(113,428)

(142,645)

(130,031)

Total liabilities


(175,253)

(197,759)

(203,288)

Net assets


299,117

302,009

323,285

Issued capital and reserves attributable to owners of the parent




Share capital

9

739

704

704

Additional paid-in share capital

9

37,924

420,824

420,824

Capital redemption reserve


5

5

5

Retained earnings


201,962

(162,696)

(185,136)

Hedging reserve


(1,294)

(2,750)

(703)

Foreign exchange reserve


54,391

37,307

77,705

Equity attributable to owners of the parent


293,727

293,394

313,399

Non-controlling interest


5,390

8,615

9,886

Total equity and reserves


299,117

302,009

323,285

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

Benchmark Holdings plc

Consolidated Statement of Changes in Equity for the period ended 31 March 2023

 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

-

-

-

-

(4,141)

(4,141)

742

(3,399)

Other comprehensive income/(loss)

-

-

(23,314)

(591)

-

(23,905)

(699)

(24,604)

Total comprehensive income/(loss) for the period

-

-

(23,314)

(591)

(4,141)

(28,046)

43

(28,003)

Contributions by and distributions to owners








Share issue

35

12,985

-

-

-

13,020

-

13,020

Share issue costs recognised through equity

-

(1,650)

-

-

-

(1,650)

-

(1,650)

Cancellation of part of share premium account (note 9)

-

(394,235)

-

-

394,235

-

-

-

Share-based payment

-

-

-

-

475

475

-

475

Total contributions by and distributions to owners

35

(382,900)

-

-

394,710

11,845

-

11,845

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

(382,900)

-

-

391,240

8,375

(4,539)

3,836

As at 31 March 2023 (unaudited)

739

37,924

54,396

(1,294)

201,963

293,728

5,390

299,118









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

-

-

-

-

(9,132)

(9,132)

372

(8,760)

Other comprehensive income/(loss)

-

-

6,842

3,126

-

9,968

359

10,327

Total comprehensive income/(loss) for the period

-

-

6,842

3,126

(9,132)

836

731

1,567

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

-

-

-

-

667

667

-

667

Total contributions by and distributions to owners

34

20,142

-

-

667

20,843

-

20,843

Changes in ownership








Total changes in ownership interests

-

-

-

-

-

-

-

-

Total transactions with owners of the Company

34

20,142

-

-

667

20,843

-

20,843

As at 31 March 2022 (unaudited)

704

420,824

37,312

(2,750)

(162,696)

293,394

8,615

302,009









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

Benchmark Holdings plc

Consolidated Statement of Cashflows for the period ended 31 March 2023




31 March 2023


31 March 2022


30 September 2022


Notes

(unaudited)

(unaudited)

(audited)

Cash flows from operating activities




Loss for the period

(3,399)

(8,760)

(30,451)

Adjustments for:




Depreciation and impairment of property, plant and equipment


4,248

4,187

8,602

Depreciation and impairment of right-of-use assets


4,918

5,865

11,295

Amortisation and impairment of intangible fixed assets


9,912

8,872

19,161

Loss on sale of property, plant and equipment


(36)

-

(43)

Finance income


(320)

(225)

(319)

Finance costs


1,715

3,714

18,437

Increase in fair value of contingent consideration receivable


-

(909)

(1,203)

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


(55)

528

595

Foreign exchange losses


(1,104)

841

(3,985)

Share-based payment expense


475

667

1,182

Other adjustments for non-cash items


-

-

(276)

Tax charge


1,482

3,616

7,274

Decrease/(increase) in trade and other receivables


6,071

108

(8,511)

Decrease/(increase) in inventories


2,517

(1,610)

(5,406)

Decrease/(increase) in biological and agricultural assets


893

(1,635)

(6,099)

(Decrease)/increase in trade and other payables


(13,673)

(10,317)

6,946

(Decrease)/increase in provisions


(13)

(12)

1,058


13,631

4,930

18,257

Income taxes paid


(4,141)

(2,975)

(7,447)

Net cash flows generated from operating activities

9,490

1,955

10,810

Investing activities




Acquisition of minority interests in subsidiaries, net of cash acquired

12

(8,009)

-

-

Purchase of investments


(307)

(48)

(378)

Receipts from disposal of investments


-

-

1,544

Purchases of property, plant and equipment


(3,254)

(5,084)

(10,808)

Purchase of intangibles


(77)

(1,523)

(205)

Capitalised research and development costs


(197)

-

(1,708)

Proceeds from sale of fixed assets


77

3

220

Interest received


319

25

119

Net cash flows used in investing activities

(11,448)

(6,627)

(11,216)

Financing activities




Proceeds of share issues


13,020

20,782

20,737

Share-issue costs recognised through equity


(1,650)

(607)

(562)

Proceeds from bank or other borrowings


21,393

-

67,939

Repayment of bank or other borrowings


(16,560)

(939)

(74,874)

Capitalised borrowing costs


(591)

-

-

Interest and finance charges paid


(4,082)

(3,757)

(9,629)

Repayments of lease liabilities


(4,689)

(4,769)

(10,533)

Net cash inflow/(outflow) from financing activities

6,841

10,710

(6,922)

Net increase/(decrease) in cash and cash equivalents

4,883

6,038

(7,328)

Cash and cash equivalents at beginning of period


36,399

39,460

39,460

Effect of movements in exchange rate


(2,634)

796

4,267

Cash and cash equivalents at end of period

38,648

46,294

36,399

Benchmark Holdings plc

Unaudited notes to the quarterly financial statements for the period ended 31 March 2023

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 six months ended 31 March 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 six months ended 31 March 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 23 May 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 31 March 2023 the Group had net assets of £299.1m (30 September 2022: £323.3m), including cash of £38.6m (30 September 2022: £36.4m) as set out in the consolidated balance sheet. The Group made a loss for the six months of £3.4m (year ended 30 September 2022: loss £30.5m).

As noted in the Management Report, the business has continued to perform well on the back of a good year in FY22. All of the business areas have performed in line with or ahead of management 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 the global economic pressures, caused mainly by the conflict in Eastern Europe. The Directors are therefore confident that even under all of the above sensitivity analysis, the Group has sufficient liquidity and resources throughout the period under 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 or UK-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 10). 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

Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

  Genetics 

13,042

11,408

34,481

26,603

58,008

  Advanced Nutrition 

22,644

22,974

45,324

42,033

80,286

  Health 

8,692

4,916

19,077

10,693

20,135

  Corporate 

1,436

1,406

2,873

2,812

5,120

  Inter-segment sales 

(1,447)

(1,471)

(2,893)

(2,894)

(5,272)

  Total 

44,367

39,233

98,862

79,247

158,277










 Segmental Adjusted EBITDA



 All figures in £000's

 Q2 2023
(unaudited)

 Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

 YTD Q2 2022
(unaudited)

 FY 2022
(audited)

  Genetics 

3,420

2,428

5,983

5,691

15,980

  Advanced Nutrition 

6,169

7,154

11,466

11,474

19,017

  Health 

2,583

(454)

6,650

93

108

  Corporate 

(1,079)

(703)

(2,039)

(1,408)

(3,924)

  Total 

11,093

8,425

22,060

15,850

31,181

Reconciliations of segmental information to IFRS measures

 Reconciliation of Reportable Segments Adjusted EBITDA to Loss before taxation

 All figures in £000's

 Q2 2023
(unaudited)

 Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

 YTD Q2 2022
(unaudited)

 FY 2022
(audited)

 Total reportable segment Adjusted EBITDA 

12,172

9,128

24,099

17,258

35,105

 Corporate Adjusted EBITDA

(1,079)

(703)

(2,039)

(1,408)

(3,924)

 Adjusted EBITDA 

11,093

8,425

22,060

15,850

31,181

 Exceptional - restructuring, disposal and acquisition related items

(1,716)

908

(2,688)

908

16

 Depreciation and impairment

(4,551)

(5,557)

(9,166)

(10,052)

(19,897)

 Amortisation and impairment

(4,410)

(4,484)

(9,912)

(8,872)

(19,161)

 Net finance costs

(2,432)

(754)

(2,210)

(2,978)

(15,316)

 Loss before taxation

(2,016)

(1,462)

(1,916)

(5,144)

(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 31 March 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Sale of goods

11,083

22,635

6,115

-

-

39,833

 Provision of services

1,957

-

2,577

-

-

4,534

 Inter-segment sales

2

9

-

1,436

(1,447)

-

13,042

22,644

8,692

1,436

(1,447)

44,367








3 months ended 31 March 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Sale of goods

9,872

22,945

2,594

-

-

35,411

 Provision of services

1,500

-

2,322

-

-

3,822

 Inter-segment sales

36

29

-

1,406

(1,471)

-


11,408

22,974

4,916

1,406

(1,471)

39,233








6 months ended 31 March 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Sale of goods

32,204

45,307

13,564

-

-

91,075

 Provision of services

2,274

-

5,513

-

-

7,787

 Inter-segment sales

3

17

-

2,873

(2,893)

-

34,481

45,324

19,077

2,873

(2,893)

98,862








6 months ended 31 March 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Sale of goods

24,381

41,993

5,845

-

-

72,219

 Provision of services

2,180

-

4,848

-

-

7,028

 Inter-segment sales

42

40

-

2,812

(2,894)

-


26,603

42,033

10,693

2,812

(2,894)

79,247



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 31 March 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

6,177

252

6,157

-

-

12,586

  India

-

2,822

-

-

-

2,822

  Turkey

-

2,528

-

-

-

2,528

  Greece

-

2,002

-

-

-

2,002

  Faroe Islands

2,224

-

119

-

-

2,343

  Ecuador

9

1,832

-

-

-

1,841

  United Kingdom

814

8

-

-

-

822

  Chile

1,121

9

88

-

-

1,218

 Vietnam

-

2,330

-

-

-

2,330

 Rest of Europe

1,680

1,716

-

-

-

3,396

 Rest of World

1,015

9,136

2,328

-

-

12,479

 Inter-segment sales

2

9

-

1,436

(1,447)

-

13,042

22,644

8,692

1,436

(1,447)

44,367








3 months ended 31 March 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

 Norway

6,115

211

4,288

-

-

10,614

 India

260

3,711

-

-

-

3,971

 Turkey

-

2,238

-

-

-

2,238

 Greece

-

1,832

-

-

-

1,832

 Faroe Islands

1,709

5

147

-

-

1,861

 Ecuador

-

1,227

-

-

-

1,227

 United Kingdom

899

14

30

-

-

943

 Chile

224

5

150

-

-

379

 Vietnam

-

3,014

-

-

-

3,014

 Rest of Europe

1,590

1,278

-

-

-

2,868

 Rest of World

575

9,410

301

-

-

10,286

 Inter-segment sales

36

29

-

1,406

(1,471)

-


11,408

22,974

4,916

1,406

(1,471)

39,233








4.     Revenue (continued)

Primary geographical markets (continued)

6 months ended 31 March 2023 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

23,061

342

14,452

-

-

37,855

  India

-

7,025

-

-

-

7,025

  Turkey

2

4,732

-

-

-

4,734

  Greece

-

4,271

-

-

-

4,271

  Faroe Islands

3,319

-

348

-

-

3,667

  Ecuador

29

3,572

-

-

-

3,601

  United Kingdom

1,551

27

42

-

-

1,620

  Chile

1,133

11

342

-

-

1,486

 Vietnam

-

5,025

-

-

-

5,025

 Rest of Europe

3,742

3,338

-

-

-

7,080

 Rest of World

1,641

16,964

3,893

-

-

22,498

 Inter-segment sales

3

17

-

2,873

(2,893)

-

34,481

45,324

19,077

2,873

(2,893)

98,862








6 months ended 31 March 2022 (unaudited)

All figures in £000's

 Genetics

 Advanced Nutrition

  Health

 Corporate

 Inter-segment sales

 Total

  Norway

15,794

323

8,956

-

-

25,073

  India

400

7,719

-

-

-

8,119

  Turkey

-

3,932

-

-

-

3,932

  Greece

-

3,471

-

-

-

3,471

  Faroe Islands

2,856

28

118

-

-

3,002

  Ecuador

-

2,291

-

-

-

2,291

  United Kingdom

2,601

6

277

-

-

2,884

  Chile

340

5

553

-

-

898

 Vietnam

-

6,009

-

-

-

6,009

 Rest of Europe

3,361

2,581

-

-

-

5,942

 Rest of World

1,209

15,628

789

-

-

17,626

 Inter-segment sales

42

40

-

2,812

(2,894)

-


26,603

42,033

10,693

2,812

(2,894)

79,247



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


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

 Exceptional restructuring costs


1,716

                    -  

2,688

                    -  

1,229

 Income in relation to disposals


-

(908)

-

(908)

(1,245)

Total exceptional items


1,716

(908)

2,688

(908)

(16)

Exceptional restructuring costs for the quarter include £1,666,000 (YTD 2023: £2,553,000; FY 2022: £843,000) of legal and professional costs in relation to preparing for listing the Group on the Oslo stock exchange, and £50,000 (YTD 2023: £135,000; FY 2022: £276,000) relating to other restructuring costs.

Income in relation to disposals for Q2 2022 and YTD Q2 2022 of £908,000 relate to an increase in the fair value of contingent consideration receivable following the disposal of Improve International Limited in 2020.  Further to this, the balance in FY 2022 includes £294,000 of additional contingent consideration received relating to the disposal of Aquaculture UK in 2020.


6.     Taxation

All figures in £000's


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)







Analysis of charge in period







Current tax:






Current income tax expense on profits for the period


997

2,642

2,835

5,007

11,727

Adjustment in respect of prior periods


-

-

-

-

(39)

Total current tax charge


997

2,642

2,835

5,007

11,688







Deferred tax:






Origination and reversal of temporary differences


(293)

(453)

(1,352)

(1,391)

(4,414)

Deferred tax movements in respect of prior periods


-

-

-

-

-

Total deferred tax credit

(293)

(453)

(1,352)

(1,391)

(4,414)




-

-

Total tax charge


704

2,189

1,483

3,616

7,274

7.     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.


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

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

(2,858)

(3,775)

(4,141)

(9,132)

(32,087)

Weighted average number of shares in issue (thousands)

723,173

703,926

724,505

692,474

698,233

Basic loss per share (pence)

(0.40)

(0.54)

(0.57)

(1.32)

(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 4,312,880 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 31 March 2022: 5,184,054). These potential ordinary shares could dilute earnings/loss per share in the future.


8.     Loans and borrowings


YTD Q2 2023

YTD Q2 2022

FY 2022

All figures in £000's

(unaudited)

(unaudited)

(audited)

Non-Current



2025 750m NOK Loan notes

56,756

-

61,054

2023 850m NOK Loan notes

-

76,353

-

Bank borrowings

16,974

18,917

17,226

Lease liabilities

9,148

18,915

14,765


82,878

114,185

93,045

Current



Bank borrowings

9,421

1,648

5,569

Lease liabilities

12,694

11,899

11,522


22,115

13,546

17,091

Total loans and borrowings

104,993

127,732

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. The proceeds were used to repay its existing NOK 850m floating rate listed bond, originally raised in June 2019.  The bond was listed on the Oslo Stock Exchange during the current period on 12 April 2023.

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 leaving £12,110,000 undrawn as at 31 March 2023.

Additionally, during the period, 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.


9.     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

11,335

Cancellation of part of the share premium account

-

-

(394,235)

Exercise of share options

127,321

-

-

Balance at 31 March 2023

739,277,469

739

37,924

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 £1.7m were in relation to the share issues 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.

10.   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 profit/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.


10.  Alternative performance measures and other metrics (continued)

Reconciliation of Adjusted Operating Profit to Operating Loss

All figures in £000's


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

Revenue

44,367

39,233

98,862

79,247

158,277

Cost of sales


(19,549)

(19,210)

(49,817)

(39,725)

(75,149)

Gross profit

24,818

20,023

49,045

39,522

83,128

Research and development costs


(1,435)

(1,590)

(2,998)

(3,237)

(6,691)

Other operating costs


(12,290)

(9,984)

(24,043)

(19,907)

(44,661)

Depreciation and impairment


(4,551)

(5,557)

(9,166)

(10,052)

(19,897)

Amortisation of capitalised development costs


(610)

(448)

(1,227)

(896)

(2,165)

Share of loss of equity accounted investees net of tax


-

(24)

56

(528)

(595)

Adjusted operating profit

5,932

2,420

11,667

4,902

9,119

Exceptional - restructuring, disposal and acquisition related items


(1,716)

908

(2,688)

908

16

Amortisation and impairment of intangible assets excluding development costs


(3,800)

(4,036)

(8,685)

(7,976)

(16,996)

Operating profit/(loss)


416

(708)

294

(2,166)

(7,861)

Reconciliation of Loss Before Taxation to Adjusted Profit Before Tax

All figures in £000's


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)







Loss before taxation

(2,016)

(1,462)

(1,916)

(5,144)

(23,177)

Exceptional - restructuring, disposal and acquisition related items


1,716

(908)

2,688

(908)

(16)

Amortisation and impairment of intangible assets excluding development costs


3,800

4,036

8,685

7,976

16,996

Adjusted profit before tax


3,500

1,666

9,457

1,924

(6,197)

Other Metrics

All figures in £000's


Q2 2023
(unaudited)

Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

YTD Q2 2022
(unaudited)

FY 2022
(audited)

Total R&D Investment






Research and development costs


1,435

1,590

2,998

3,237

6,691

Internal capitalised development costs


144

777

198

1,404

1,708

Total R&D investment


1,579

2,367

3,196

4,641

8,399

All figures in £000's


 Q2 2023
(unaudited)

 Q2 2022
(unaudited)

YTD Q2 2023
(unaudited)

 YTD Q2 2022
(unaudited)

 FY 2022
(audited)

Adjusted EBITDA excluding fair value movement in biological assets






Adjusted EBITDA


11,093

8,425

22,060

15,850

31,181

Exclude fair value movement


(1,401)

(1,101)

(247)

(1,005)

(1,595)

Adjusted EBITDA excluding fair value movement in biological assets

9,692

7,324

21,813

14,845

29,586



10.  Alternative performance measures and other metrics (continued)

Liquidity

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




31 March 2023

All figures in £000's


(unaudited)

Cash and cash equivalents


38,647

Undrawn bank facility


12,110



50,757

The undrawn bank facility relates to the RCF facility.  At 31 March 2023, £7.9m of the RCF was drawn (30 September 2022: £4.0m and 31 March 2022: £nil), leaving £12.1m undrawn (30 September 2022: £9.4m and 31 March 2022: £nil).

11.   Net debt

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




31 March 2023


31 March 2022


30 September 2022

All figures in £000's


(unaudited)

(unaudited)

(audited)

Cash and cash equivalents


38,647

46,294

36,399

Loans and borrowings (excluding lease liabilities) - current


(9,421)

(1,647)

(5,569)

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


(73,730)

(95,270)

(78,280)

Net debt excluding lease liabilities


(44,504)

(50,623)

(47,450)

Lease liabilities - current


(12,694)

(11,899)

(11,522)

Lease liabilities - non-current


(9,148)

(18,915)

(14,765)

Net debt


(66,346)

(81,437)

(73,737)

12.   Purchase of minority interests in subsidiary companies  

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.  Following this acquisition, Benchmark Genetics Limited, a subsidiary of Benchmark Holdings PLC, now owns 100% of the share capital of Benchmark Genetics USA Inc.

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