Animal health business Benchmark (BMK) has a tricky year in store as it seeks to diversify its revenues. The company can't rely on Salmosan, its sea lice treatment for farmed salmon, to drive the bulk of sales anymore. During the first half of the financial year, intense competition from generic copies of the product in Chile dragged cash profit down by £1.4m to £1.2m. Chief executive Malcolm Pye admits this has been a "bump in the road", but reiterated the company's long-term goal to move away from single product sales.
Acquisitions drove much of the 30 per cent improvement in first-half revenue, with half of that turnover coming from the breeding and genetics division, newly formed after the December acquisitions of Norwegian group Salmobreed, and Icelandic outfit Stofnfiskur. So it is safe to say the buy-and-build strategy is working. Excluding contributions from acquired businesses, sales would have dropped 38 per cent against tough comparative figures last year.
Meanwhile, the company has expanded its future product pipeline once again. It added another 14 products, taking the portfolio total up to 61.
Analysts at Cenkos expect losses of £6.6m for the full year, giving a loss per share of 0.7p. This compares with adjusted pre-tax profit of £3.1m in the year to September 2014, and EPS of 3.9p.
| BENCHMARK (BMK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 71p | MARKET VALUE: | £155m | |
| TOUCH: | 67-74p | 12-MONTH HIGH: | 125p | LOW: 64p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 46p* | NET CASH: | £38m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 15.2 | -1.8 | -1.3 | nil |
| 2015 | 19.8 | -3.8 | -2.5 | nil |
| % change | +30 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £59.2m,A or 27p a share | ||||
