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Benchmark's Brexit-mitigating actions

The fish farmer and animal gentics group is growing, but comments around Brexit have put the market on edge
January 24, 2019

The past year was largely successful for fish farming specialist Benchmark (BMK). Revenues grew by 13 per cent and adjusted pre-tax profits by 19 per cent, but the share price fall on results days suggests investors are worried about a 'slower' start for the advanced nutrition business this year following 'volatility' in the shrimp market. However, chief executive Malcolm Pye believes the division will recover in the second half, as trading improves beyond the Chinese New Year. A strong start from the genetics business also offset some of this sluggishness.

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In these results, management also referenced the UK's upcoming departure from the European Union (EU), and specifically the "mitigating actions" it has taken to "maintain the supply of products to customers". For now, Mr Pye is confident the group can withstand any near-term shocks: "Around 70 to 80 per cent of our business is outside of Europe," he said. "But, like any sane person, we’re not supportive of a no-deal, or even a hard Brexit." Benchmark conducts most of its work in US dollars, which led to an adverse £4m foreign exchange impact in these numbers.

Analysts at Numis still expect cash profits of £22m for the year ending September 2019, giving EPS of 1.4p, compared with £17m and 0.7p in FY2018.

BENCHMARK (BMK)   
ORD PRICE:59pMARKET VALUE:£326m
TOUCH:57-60p12-MONTH HIGH:69pLOW: 50p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:67p*NET DEBT:15%
Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201435.4-1.4-1.0nil
201544.2-11.4-6.0nil
2016109-22.4-4.4nil
2017140-8.1-1.4nil
2018151-13.7-0.9nil
% change+8---
Ex-div:na   
Payment:na   
*Includes intangible assets of £325m, or 58p a share