28th Jun 2016 13:45
LONDON (Alliance News) - Benchmark Holdings PLC on Tuesday reported a wider pretax loss in the first half of its financial year due to it booking higher costs relating to the creation of its new Advanced Animal Nutrition division, but the new division also contributed to a rise in revenue.
The biotechnology and food chain sustainability business said its pretax loss in the six months ended March 31 widened to GBP12.6 million from GBP3.8 million in the same period the year before, despite revenue more than doubling to GBP48 million from GBP19.8 million.
Profit was hit due to an increase in operating costs, depreciation and amortisation charges, and finance costs. The biggest hit came from higher operating costs of GBP29.8 million from GBP9.1 million, due to the creation of the new Advanced Animal Nutrition division following Benchmark's acquisition of INVE Aquaculture Holdings in December.
Revenue, however, grew on the back of a strong performance from the Advanced Animal Nutrition division and improved performance from the Animal Health division, while also benefiting from the INVE acquisition.
"The group remains on track for the full year despite the fact that El Nino has had an impact on the climate in South East Asia and Latin America and the algal bloom in Chile has reduced total salmon biomass across the Chilean industry. Such climatic changes always have the potential to significantly influence sales of aquaculture health products, salmon eggs or advanced nutrition, and the board continues to monitor the situation," Chairman Alexander Hambro said in a statement.
Benchmark added that the impact on trading following the EU referendum result will be largely mitigated given that most of its sales and operations do not involve EU countries.
"The most immediate impact relevant to Benchmark is that on the UK currency. With a large proportion of the group's sales transacted in US dollars, volatile GBP exchange rates may lead to increased exchange gains or losses, albeit these will be hedged by raw materials sourced in US dollars and by Benchmark's US dollar denominated borrowing facility," Hambro said.
Shares in Benchmark were trading down 3.2% at 61.00 pence on Tuesday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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