20th Dec 2019 11:11
(Alliance News) - Benchmark Holdings PLC said Friday its annual loss widened sharply, as revenue declined and the company recorded an impairment charge resulting from reduced forecasts in Advanced Nutrition.
For the year to the end of September, the aquaculture health, nutrition and genetics firm said its pretax loss yawned to GBP73.3 million from GBP8.4 million the year before. This mainly stemmed from an impairment charge of GBP44.8 million in the recent year.
The impairment of assets was related to the impairment of the goodwill from INVE Aquaculture Group, which was acquired in December 2015 for USD342 million.
The material change in the market outlook for shrimp and Mediterranean sea bass led to a reduction in value of the discounted cash flows for Benchmark's Advanced Nutrition division, and in turn the impairment on INVE.
Adjusted earnings before interest, taxes, depreciation and amortisation was down 37% at GP12.1 million from GBP19.1 million, on revenue that declined by 3% to GBP127.3 million from GBP131.6 million the prior year.
The revenue decline was largely due to a weaker performance from the Advanced Nutrition segment, where there was a 10% decline to GBP76.8 million, more than offsetting growth in Genetics by 11% to GBP39.7 million.
Looking ahead, Benchmark said weakness in the shrimp and sea bass markets continues, and is unlikely to return to 2018 levels in 2020; however the company's outlook for the salmon outlook remains positive.
Despite the weaker annual performance, Benchmark expects to deliver underlying adjusted Ebitda for its 2020 financial year in line with this year.
"Following these disappointing results, and the management changes announced in August, our priorities for the coming year are to deliver the programme of disposals and restructuring, to obtain regulatory approval and prepare for launch of BMK08 and CleanTreatO and to execute our strategy in our core business areas of Genetics and Advanced Nutrition, including the launch of SPR shrimp and the expansion of our health and specialist diets segments in Advanced Nutrition," said Executive Chair Peter George.
Shares in Benchmark Holdings - which is headquartered in Sheffield - were down 9.6% at 42.50 pence on Friday in London.
By Dayo Laniyan; [email protected]
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