TIDMBMK
RNS Number : 3862X
Benchmark Holdings PLC
28 August 2020
28 August 2020
Information within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulations
(EU) No. 596/2014.
Benchmark Holdings plc
("Benchmark", the "Company" or the "Group")
Q3 Results
(3 months ended 30 June 2020)
Restructuring programme substantially complete
Resilient trading despite challenging shrimp market
In compliance with the terms of the Company's senior secured
bond which requires it to publish quarterly financial information,
Benchmark, the aquaculture biotechnology business, announces its
unaudited results for the 3 months ended 30 June 2020 (the
"period") . All Q3 FY20, Q3 FY19, YTD Q3 2020 and YTD Q3 2019
figures quoted in this announcement are based on unaudited
accounts.
GBPm Q3 FY20 Q3 FY19 YTD YTD FY2019
Q3 2020 Q3 2019 Restated*
-------------------------------------- -------- -------- --------- --------- -----------
Adjusted
-------------------------------------- -------- -------- --------- --------- -----------
Revenue from continuing operations 24.5 22.8 81.6 90.1 126.8
-------------------------------------- -------- -------- --------- --------- -----------
Adjusted EBITDA(2) from continuing
operations 0.3 (1.4) 3.2 5.9 13.5
-------------------------------------- -------- -------- --------- --------- -----------
Adjusted operating (loss)/profit (1.5) (3.0) (2.3) 1.3 5.5
-------------------------------------- -------- -------- --------- --------- -----------
Exceptional items (0.6) (0.1) (0.7) (0.1) (0.6)
-------------------------------------- -------- -------- --------- --------- -----------
EBITDA(1) from continuing operations (0.2) (1.5) 2.4 5.9 13.0
-------------------------------------- -------- -------- --------- --------- -----------
Statutory
-------------------------------------- -------- -------- --------- --------- -----------
Loss before tax from continuing
operations (8.5) (12.0) (27.4) (18.2) (69.2)
-------------------------------------- -------- -------- --------- --------- -----------
Loss from continuing operations (8.0) (11.7) (27.2) (18.7) (69.9)
-------------------------------------- -------- -------- --------- --------- -----------
Loss - total incl. discontinued
operations (4.4) (12.5) (23.2) (21.6) (83.1)
-------------------------------------- -------- -------- --------- --------- -----------
Basic loss per share (p) (0.66) (2.24) (3.83) (3.95) (15.03)
-------------------------------------- -------- -------- --------- --------- -----------
Net debt(4) (54.7) (78.3) (54.7) (78.3) (87.1)
-------------------------------------- -------- -------- --------- --------- -----------
(1) EBITDA is earnings/(loss) before interest, tax, depreciation
and amortisation and impairment.
(2) Adjusted EBITDA is EBITDA(1) , before exceptional items and
acquisition related expenditure.
(3) Adjusted Operating Profit is operating loss before
exceptional items including acquisition related items and
amortisation of intangible assets excluding development costs.
(4) Net debt is cash and cash equivalents less loans, borrowings
and lease obligations excluding balances held for sale. Net debt
includes GBP8.6m (Q3 2019: GBPnil; FY2019: GBPnil) relating to
operating lease obligations which are now held on balance sheet
following the adoption of IFRS 15 (note 15).
* FY2019 numbers have been restated to reflect changes to the
ongoing continuing business since the year end (note 5). Q3 2019
and YTD Q3 2019 figures have not been previously reported and so
are not restated.
Divisional summary (Continuing and discontinued operations)
GBPm YTD Q3 YTD Q3
Q3 FY20 Q3 FY19 2020 2019 FY 2019
-------------------- --------- --------- ------- ------- ---------
Revenue
-------------------- --------- --------- ------- ------- ---------
Advanced Nutrition 16.0 13.6 47.3 54.5 76.8
-------------------- --------- --------- ------- ------- ---------
Genetics 7.2 7.1 29.7 29.7 39.7
-------------------- --------- --------- ------- ------- ---------
Animal Health 2.7 4.0 9.4 11.1 17.7
-------------------- --------- --------- ------- ------- ---------
Adjusted EBITDA(2)
-------------------- --------- --------- ------- ------- ---------
Advanced Nutrition 2.8 1.4 6.1 10.9 15.4
-------------------- --------- --------- ------- ------- ---------
Genetics 1.2 0.8 9.8 5.7 10.1
-------------------- --------- --------- ------- ------- ---------
Animal Health (2.8) (3.2) (10.5) (9.4) (10.2)
-------------------- --------- --------- ------- ------- ---------
(1) EBITDA is earnings/(loss) before interest, tax, depreciation
and amortisation and impairment.
(2) Adjusted EBITDA is EBITDA(1) , before exceptional items and
acquisition related expenditure.
Q3 Overview
Financial Performance
-- Revenues from continuing operations were 8% ahead of the prior year resulting from:
o Continued good performance in Genetics with revenues in line
with the prior year
o Higher revenues in Advanced Nutrition which benefitted from a
partial catch-up of delayed orders as a result of Covid-19
o Lower revenues in Animal Health below Q3 2019 with the
comparable period benefitting from revenues derived from BMK08
trials
-- Adjusted EBITDA from continuing operations was GBP0.3m
against a GBP1.4m loss in in Q3 2019 reflecting higher revenues,
higher margins in Genetics as external production moves in-house,
and a reduction in operating costs and R&D expenses from
measures taken during Covid-19
-- YTD Q3, Group revenues from continuing operations were 9.4%
below the prior year and Adjusted EBITDA from continuing operations
was GBP3.2m, GBP2.7m below the prior year. The decrease reflects
the impact from weak shrimp markets which offset a strong
performance in Genetics and an improvement in Animal Health driven
by cost savings
-- Pro forma net debt following post period end disposals reduced to GBP36m as at 27 August 2020
-- Liquidity, following the disposals, of c.GBP84m (cash and
available facility) as at 27 August 2020
Market environment and operational highlights
-- The salmon industry continues to be resilient and the sea
bass / bream market is relatively stable
-- The shrimp market continues to be challenging as a result of
Covid-19 lockdowns with low demand and prices, and major producing
countries including India and Ecuador significantly affected
-- BMK08/CleanTreat(R) on track for commercial launch in Q2 of calendar year 2021
-- Trond Williksen joined as new CEO on 1 June 2020
Disposals and restructuring
-- Disposal programme substantially complete raising up to
GBP44m; five divestments in the period to date
o Improve International to RJD Partners in June 2020 for up to
GBP12.75m
o FishVet to Zoetis in July 2020 for c. GBP14.5m
o Vaccine manufacturing facility to Catapult Gene and Cell
Therapy in July 2020 for net proceeds of GBP12m
o Agreement to exit equine vaccine joint development programme
in August 2020 for a GBP1m upfront consideration and up to GBP1m
deferred
o MBO of FAI Farms in August 2020 for a nominal sum
-- Restructuring programme aiming to deliver GBP10m in annual
savings from 2021 is well advanced following the sale of the
vaccine manufacturing facility
Current trading and outlook
-- Salmon industry remains resilient and sea bass/bream markets
stable; however, conditions in the shrimp market continue to be
challenging, and we expect these trends to continue in FY21
-- Expect to deliver full year results in-line with market expectations
Trond Williksen, CEO, commented:
"We are very pleased with the significant progress made over the
last few months towards the completion of the disposal of non-core
assets and the cash proceeds generated. Following the restructuring
we are well advanced to become a streamlined, financially strong
business wholly focused on our core businesses: Genetics, Advanced
Nutrition and Health. We continue to work on our restructuring
programme which aims to deliver GBP10m in annual savings from FY21
taking us a step closer towards our goal of becoming sustainably
profitable.
"While the shrimp market continues to experience challenges as a
result of Covid-19 the salmon market which underpins our genetics
and health businesses remains resilient and overall, we expect to
deliver full year results in line with expectations."
Septima Maguire, CFO, commented:
"The completion of our disposal programme generating up to
GBP44m, together with our ongoing cash conservation plan puts us in
a strong financial position to remain resilient through the
Covid-19 pandemic and to invest selectively in our business to
deliver future growth."
Details of analyst / investor call today
There will be a call at 8:30am UK time today for analysts and
investors. To register for the call please contact MHP
Communications on +44 (0)20 3128 8742, or by email on
benchmark@mhpc.com
Enquiries
For further information, please contact:
Benchmark Holdings plc Tel: 020 3696 0630
Trond Williksen, CEO
Septima Maguire, CFO
Ivonne Cantu, Investor Relations
Numis (Broker and NOMAD) Tel: 020 7260 1000
James Black, Freddie Barnfield, Duncan Monteith
MHP Communications Tel: 020 3128 8742
Katie Hunt, Reg Hoare, Alistair de Kare-Silver
benchmark@mphc.com
About Benchmark
Benchmark's mission is to enable aquaculture producers to
improve their sustainability and profitability.
We bring together biology and technology, to develop innovative
products which improve yield, quality and animal health and welfare
for our customers. We do this by improving the genetic make-up,
health and nutrition of their stock - from broodstock and hatchery
through to nursery and grow out.
Benchmark has a broad portfolio of products and solutions,
including salmon eggs, live feed (Artemia), diets and probiotics
and sea lice treatments. Find out more at www.benchmarkplc.com
Management Report
During Q3 2020 and post period end, the Company completed five
disposals and exits, substantially concluding its disposal
programme which raised up to GBP44m in total. In June 2020 the
Company announced the sale of Improve International to RJD Partners
for up to GBP12.75m. This was followed by the sale of FishVet to
Zoetis on 1 July for c.GBP14.5m and the sale of the Group's vaccine
manufacturing facilities to Cell and Gene Therapy Catapult for net
proceeds of GBP12m towards the end of July. In August the Company
exited its consulting business FAI Farms through an MBO and its
joint development equine vaccine programme which generated a GBP1m
upfront payment and up to GBP1m potential deferred payment. We are
particularly pleased to have secured strong buyers, providing
continuity of employment for our staff.
Following the disposal of non-core assets and exit from loss
making activities, we are well advanced towards becoming a
streamlined, financially strong Group. Our stronger financial
position enables us to focus and invest selectively in our
businesses: Genetics, Advanced Nutrition and Health. We continue to
work on our restructuring programme which aims to deliver GBP10m in
annual savings from FY21, taking us a step closer towards our goal
of becoming sustainably profitable.
During the period we continued to prepare for the launch of
BMK08 and CleanTreat(R) in Q2 calendar year 2021, progressing
through the regulatory approval process, developing our commercial
plan and advancing the construction of a second CleanTreat(R)
system.
Trading in Q3 delivered an 8% increase in revenues and an
Adjusted EBITDA profit of GBP0.3m, a GBP1.7m improvement from the
Adjusted EBITDA loss of GBP1.4m in Q3 last year. Operating costs of
GBP8.0m in Q3 were 15% below the prior period (Q3 2019: GBP9.4m)
and R&D expenses of GBP1.6m were 54% down (Q3 2019: GBP3.5m).
This reflects the positive impact of a group-wide effort to reduce
operating costs and R&D, and a natural reduction in marketing
and travel expenses in the period as a result of Covid-19. Total
R&D investment in Q3 including capitalised development costs
were GBP2.6m (Q3 2019: GBP6.1m).
YTD Q3 revenues were GBP81.6m, 9.4% below the prior year (YTD Q3
2019: GBP90.1m). YTD Q3 Adjusted EBITDA was GBP3.2m (YTD Q3 2019:
GBP5.9m) reflecting challenging markets in Advanced Nutrition,
partially offset by a continued strong performance and improved
margins in Genetics as we continue to shift production of salmon
eggs in-house.
Overall, our main end markets saw a continuation of the trends
reported in our interim results with weak shrimp markets, a
resilient salmon industry and sea bass/bream markets experiencing a
modest impact from Covid-19. We expect this scenario to continue
for the remainder of the year and 2021.
Update on Covid-19
We continue to operate our business with the health and safety
of our employees as a priority while providing continuity of supply
and service to our customers. Conditions across our multiple
locations around the world vary and we have procedures in place to
address local constraints. We are maintaining our focus on cost and
cash management, which together with our tried and tested flexible
operating processes, give us resilience for the next phase of the
pandemic and the uncertainty associated with it.
Advanced Nutrition
Advanced Nutrition reported revenues of GBP16.0m in Q3, 18%
above the prior year (Q3 2019: GBP13.6m) as a result of a partial
catch-up of previously delayed orders due to Covid-19. YTD Q3
revenues of GBP47.3m were 13% below the prior year (YTD Q3 2019:
GBP54.5m). Adjusted EBITDA in Q3 was GBP2.8m (Q3 2019: GBP1.4m).
YTD Q3 Adjusted EBITDA was GBP6.1m (YTD Q3 2019: GBP10.9m).
The YTD Q3 performance reflects an ongoing weak shrimp market,
and continued competition in Artemia leading to significantly lower
Artemia volumes and prices. The shrimp markets continue to be
challenged by low prices, compounded by lower demand as a result of
the slow and limited reopening in the catering sector globally, as
well as the ongoing impact from Covid-19 on some of the major
shrimp producing countries.
The impact from Covid-19 on the shrimp markets was initially
evident in China, then the rest of Asia, and extended into Latin
America as the pandemic spread across the globe. At peak impact, we
estimate that major shrimp producing countries were operating at
20-60% of normal capacity in hatchery and farm. In the past two
months we have seen some evidence of recovery in Thailand, Vietnam
and Indonesia, although volatility remains. The most affected major
markets are now India and Ecuador, which we estimate are operating
at 20-50% of capacity, the situation in Ecuador being compounded by
relations with its primary consumer market of China. Overall, we
expect the global shrimp market to remain weak for the rest of the
year and, at this stage, the timing of a recovery is uncertain.
On a product-by-product basis in Q3, Artemia revenues were up
58% and Diets up 1% versus the prior year while Health was down
10%. YTD Q3, Artemia revenues were down 15% versus prior year as a
result of volume and price erosion, whilst revenues in Diets were
down 15% as a result of low shrimp and sea bass/bream demand as
outlined above; Health was up 13%.
Genetics
Genetics revenues in Q3 2020 at GBP7.2m were in line with the
prior year (Q3 2019: GBP7.1m) reflecting similar egg volumes and a
higher average price which was offset by adverse forex movements.
Traditionally Q3 is the lowest sales quarter as customers in the
northern hemisphere transition from in-season to out-of-season
eggs. YTD Q3 revenues at GBP29.7m were also in line with prior year
(YTD Q3 2019: GBP29.7m).
Adjusted EBITDA for Q3 2020 of GBP1.2m was 46% higher than prior
year (Q3 2019: GBP0.8m), with reduced operating costs and R&D
spend as part of our Covid-19 mitigation strategy which more than
offset lower fair value adjustments of biological assets in the
period.
Adjusted EBITDA for YTD Q3 of GBP9.8m was GBP4.1m higher than
prior year (YTD Q3 2019: GBP5.7m). The increase in margin and
Adjusted EBITDA is mainly due to the benefit of in-house egg
production at the Group's new Salten facility replacing more
expensive outsourced production, higher egg prices and higher
royalties from salmon farmers using Benchmark genetics in their own
production. R&D investment (expensed and capitalised) in the
division increased to GBP4.4m (YTD Q3 2019: GBP3.4m) as a result of
higher investment in our breeding programmes in salmon and SPR
shrimp.
Operationally, test market sales of our specific pathogen
resistant (SPR) shrimp breeders continued successfully in China and
Indonesia and expanded into Vietnam. In parallel, we are continuing
our programme of performance trials in China, Thailand and Vietnam.
Together, these efforts will give us a strong platform to launch
commercially as the shrimp markets recover.
Animal Health
Revenues in Q3 2020 were GBP2.7m (Q3 2019: GBP4.0m); of which
discontinued operations accounted for GBP1.3m in Q3 2020 (Q3 2019:
GBP1.6m). The reduction in revenues reflects the lack of
BMK08/CleanTreat(R) trials in the period, as well as lower Salmosan
and toll manufacturing revenues. YTD Q3 2020 revenues were GBP9.4m
(YTD Q3 2019: GBP11.1m) of which discontinued operations accounted
for GBP4.3m (YTD Q3 2019: GBP4.5m).
Adjusted EBITDA in Q3 2020 was a loss of GBP2.8m (Q3 2019: loss
GBP3.2m) of which Adjusted EBITDA from discontinued operations was
a profit of GBP0.2m (Q3 2019: profit of GBP0.1m). The improvement
reflects a reduction in R&D investment in vaccines and lower
operating costs partially offset by lower revenues and increased
investment in BMK08 and CleanTreat(R). YTDQ3 Adjusted EBITDA was a
loss of GBP10.5m (Q3 YTD 2019: loss GBP9.4m) and a loss of GBP2.8m
in the quarter (Q3 2019: loss GBP3.2m) of which discontinued
operations accounted for profit of GBP0.1m (YTD Q3 2019: GBP0.1m
loss).
Following the review of our vaccine strategy and the disposal of
our vaccine manufacturing facility, the Company intends to continue
the development of a more focused aqua vaccine programme in
partnership with a business with complementary capabilities.
Finance costs, cashflow and net debt
Net finance cost for the quarter was GBP2.0m. The higher
interest charge following the refinancing in FY19 of GBP1.8m (Q3
2019: GBP1.5m) was offset in the quarter by a credit of GBP1.5m for
the increase in the fair value of the financial instrument used to
hedge the interest and currency risk on the NOK bond financing (Q3
2019: GBPnil). The forex charge in the quarter was lower in the
current quarter at GBP1.4m (Q3 2019: GBP2.4m), and amortisation of
capitalised borrowing fees was lower following the refinancing
exercise last year at GBP0.2m (Q3 2019: GBP0.8m).
Net finance cost for the YTD Q3 at GBP11.5m is GBP4.9m higher
than the prior year (YTD 2019: GBP6.6m). The main reasons for the
higher charge are the higher interest costs following refinancing
in FY19 of GBP5.3m (YTD Q3 2019: GBP3.9m), a deficit on revaluation
of hedging instruments mentioned above of GBP2.1m (YTD Q3 2019:
GBPnil) and forex charges of GBP3.2m (YTD Q3 2019: GBP2.3m).
Net debt at the quarter end was GBP54.7m (June 2019: GBP78.3m;
Sept 2019: GBP87.1m), after an increase in cash of GBP38.5m in the
year to date (2019: increase in cash of GBP0.5m). This is a result
of tight control over cash during the Covid-19 lockdown period
together with the share raise concluded in February 2020 (GBP42m
net), receipts from the dissolution of the joint venture in Chile
(GBP6.9m) and net receipts from the disposals programme of GBP6.8m.
The reduction in net debt is after cash inflow from operations of
GBP0.5m (YTD 2019: outflow of GBP6.3m) and capex of GBP8.5m (2019:
GBP10.9m). Liquidity at the end of the period was GBP67m providing
GBP57m of headroom against our minimum liquidity covenant.
Pro forma net debt following post period end disposals is GBP36m
giving liquidity of GBP84m as at 27 August.
Outlook
Following the recent divestments, the Company is in a solid
financial position to prepare for the commercial launch of BMK08 in
Q2 2021 CY, and to invest selectively in its streamlined core
business. We continue to work on the announced restructuring which
is well advanced and is expected to deliver at least GBP10m in
annual savings.
The salmon industry which underpins our Genetics and Health
businesses remains resilient, and although conditions in the shrimp
market continue to be challenging, we expect to deliver full year
results in line with market expectations.
Consolidated Income Statement for the period ended 30 June
2020
FY 2019
YTD Q3 YTD Q3
Q3 2020 Q3 2019* 2020 2019* Restated*
All figures in GBP000's Notes (unaudited) (unaudited) (unaudited) (unaudited) (audited)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Revenue 4 24,542 22,754 81,566 90,110 126,776
Cost of sales (14,425) (11,070) (42,352) (45,113) (60,303)
-------------------------------- ------
Gross profit 10,117 11,684 39,214 44,997 66,473
Research and development costs (1,618) (3,537) (8,297) (9,064) (12,587)
Other operating costs (7,969) (9,389) (27,942) (29,580) (39,939)
Share of (loss)/profit of
equity-accounted investees,
net of tax (186) (167) 205 (432) (414)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Adjusted EBITDA(2) 344 (1,409) 3,180 5,921 13,533
Exceptional -
restructuring/acquisition
related items 6 (581) (71) (749) (71) (581)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
EBITDA(1) (237) (1,480) 2,431 5,850 12,952
Depreciation and impairment (1,831) (1,610) (5,447) (4,664) (8,080)
Amortisation and impairment (4,479) (4,291) (12,880) (12,767) (62,045)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Operating loss (6,547) (7,381) (15,896) (11,581) (57,173)
Finance cost (1,999) (4,765) (11,634) (7,216) (12,422)
Finance income 11 162 90 571 368
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Loss before taxation (8,535) (11,984) (27,440) (18,226) (69,227)
Tax on loss 7 580 303 223 (444) (640)
-------------------------------- ------ -------------- ------------
Loss from continuing operations (7,955) (11,681) (27,217) (18,670) (69,867)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Discontinued operations
Profit/(loss) from discontinued
operations, net of tax 5 3,559 (818) 4,021 (2,911) (13,213)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
(4,396) (12,499) (23,196) (21,581) (83,080)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Loss for the year attributable
to:
- Owners of the parent (4,413) (12,520) (23,383) (22,048) (83,857)
- Non-controlling interest 17 21 187 467 777
-------------------------------- ------ -------------- --------------
(4,396) (12,499) (23,196) (21,581) (83,080)
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Earnings per share
Basic loss per share (pence) 8 (0.66) (2.24) (3.83) (3.95) (15.03)
Diluted loss per share (pence) 8 (0.66) (2.24) (3.83) (3.95) (15.03)
Earnings per share - continuing
operations
Basic loss per share (pence) 8 (1.19) (2.10) (4.48) (3.43) (12.66)
Diluted loss per share (pence) 8 (1.19) (2.10) (4.48) (3.43) (12.66)
Adjusted EBITDA from continuing
operations 344 (1,409) 3,180 5,921 13,533
Adjusted EBITDA from
discontinued
operations 5 (37) 265 388 428 192
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
Total Adjusted EBITDA 307 (1,144) 3,568 6,349 13,725
-------------------------------- ------ -------------- -------------- -------------- -------------- ------------
1 EBITDA - Earnings/loss before interest, tax, depreciation and
amortisation
2 Adjusted EBITDA - EBITDA before exceptional and acquisition
related items
*FY 2019 numbers have been restated to reflect changes to the
ongoing continuing business since the year end (note 5). YTD Q3
2019 and Q3 2019 figures have not been previously reported and so
are not restated.
Consolidated Statement of Comprehensive Income for the period
ended 30 June 2020
FY 2019
YTD Q3 YTD Q3
Q3 2020 Q3 2019* 2020 2019* Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
----------------------------- ---- -------------- -------------- -------------- -------------- -------------
Loss for the period (4,396) (12,499) (23,196) (21,581) (83,080)
Other comprehensive income
Items that are or may be
reclassified subsequently
to profit or loss
Foreign exchange translation
differences 8,886 11,953 (8,438) 4,481 13,919
Cash flow hedges - changes
in fair value 4,982 (768) (4,904) (927) (3,549)
Cash flow hedges - reclassified
to profit or loss (1) (19) (163) (7) (17)
Total comprehensive income
for the period 9,471 (1,333) (36,701) (18,034) (72,727)
----------------------------------- -------------- -------------- -------------- -------------- -------------
Total comprehensive income
for the period attributable
to:
- Owners of the parent 9,169 (1,513) (36,253) (18,245) (73,174)
- Non-controlling interest 302 180 (448) 211 447
----------------------------------- -------------
9,471 (1,333) (36,701) (18,034) (72,727)
---------------------------------- -------------- -------------- -------------- -------------- -------------
Total comprehensive income
for the period attributable
to owners of the parent:
- Continuing operations 5,169 (856) (41,255) (15,362) (60,348)
- Discontinued operations 4,000 (657) 5,002 (2,883) (12,826)
-----------------------------------
9,169 (1,513) (36,253) (18,245) (73,174)
---------------------------------- -------------- -------------- -------------- -------------- -------------
*FY 2019 numbers have been restated to reflect changes to the
ongoing continuing business since the year end (note 5). YTD Q3
2019 and Q3 2019 figures have not been previously reported
separately and so are not restated.
Consolidated Balance Sheet as at 30 June 2020
30 June 30 June 30 September
2020 2019 2019
All figures in GBP000's Notes (unaudited) (unaudited) (audited)
--------------------------------- ------ ------------ ------------ --------------
Assets
Property, plant and equipment 86,021 100,862 88,900
Right of use assets 8,743 - -
Intangible assets 260,158 323,617 275,744
Equity-accounted investees 3,884 3,351 3,453
Other investments 24 34 25
Biological and agricultural
assets 9,328 8,329 12,469
Trade and other receivables - 40 -
Non-current assets 368,158 436,233 380,591
--------------------------------- ------ ------------ ------------ --------------
Inventories 23,323 23,953 22,609
Biological and agricultural
assets 20,435 17,138 16,024
Trade and other receivables 31,505 42,831 52,136
Cash and cash equivalents 54,492 24,873 16,051
--------------------------------- ------ ------------ ------------ --------------
129,755 108,795 106,820
Assets held for sale 9 9,812 - 15,970
Current assets 139,567 108,795 122,790
--------------------------------- ------ ------------ ------------ --------------
Total assets 507,725 545,028 503,381
--------------------------------- ------ ------------ ------------ --------------
Liabilities
Trade and other payables (37,489) (31,566) (35,235)
Loans and borrowings 10 (4,809) (2,283) (3,231)
Corporation tax liability (3,553) (3,796) (2,703)
Provisions (386) (1,388) (404)
--------------------------------- ------ ------------ ------------ --------------
(46,237) (39,033) (41,573)
Liabilities directly associated
with the assets held for
sale 9 (3,799) - (10,634)
------------
Current liabilities (50,036) (39,033) (52,207)
--------------------------------- ------ ------------ ------------ --------------
Loans and borrowings 10 (104,335) (100,882) (99,961)
Other payables (2,020) (1,844) (2,004)
Deferred tax (34,915) (38,297) (38,743)
Non-current liabilities (141,270) (141,023) (140,708)
--------------------------------- ------ ------------ ------------ --------------
Total liabilities (191,306) (180,056) (192,915)
--------------------------------- ------ ------------ ------------ --------------
Net assets 316,419 364,972 310,466
--------------------------------- ------ ------------ ------------ --------------
Issued capital and reserves
attributable to owners
of the parent
Share capital 11 668 558 559
Additional paid-in share
capital 399,601 358,044 358,044
Capital redemption reserve 5 5 5
Retained earnings (133,311) (49,293) (110,916)
Hedging reserve (8,633) (934) (3,566)
Foreign exchange reserve 52,399 50,690 60,202
Equity attributable to
owners of the parent 310,729 359,070 304,328
Non-controlling interest 5,690 5,902 6,138
--------------------------------- ------
Total equity and reserves 316,419 364,972 310,466
--------------------------------- ------ ------------ ------------ --------------
The notes are an integral part of this interim consolidated
financial information
Consolidated Statement of Changes in Equity for the period ended
30 June 2020
Total
attributable
Additional to equity
paid-in holders Non-
All figures in Share share Other Hedging Retained of controlling Total
GBP000's capital capital reserves reserve earnings parent interest equity
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 1
October 2019
(unaudited) 559 358,044 60,207 (3,566) (110,916) 304,328 6,138 310,466
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Comprehensive
income
for the period
(Loss)/profit
for
the period - - - - (23,383) (23,383) 187 (23,196)
Other
comprehensive
income - - (7,803) (5,067) - (12,870) (635) (13,505)
Total
comprehensive
income for
the period - - (7,803) (5,067) (23,383) (36,253) (448) (36,701)
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Contributions
by and
distributions
to owners
Share issue 109 42,869 - - - 42,978 - 42,978
Share issue
costs
recognised
through
equity - (1,312) - - - (1,312) - (1,312)
Share based
payment - - - - 988 988 - 988
Total
contributions
by and
distributions
to owners 109 41,557 - - 988 42,654 - 42,654
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Total
transactions
with owners
of the
Company 109 41,557 - - 988 42,654 - 42,654
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 30 June
2020
(unaudited) 668 399,601 52,404 (8,633) (133,311) 310,729 5,690 316,419
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 1
October 2018
(unaudited) 557 357,894 45,958 - (28,240) 376,169 5,678 381,847
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Comprehensive
income
for the year
(Loss)/profit
for
the year - - - - (22,048) (22,048) 467 (21,581)
Other
comprehensive
income - - 4,737 (934) - 3,803 (256) 3,547
Total
comprehensive
income for
the year - - 4,737 (934) (22,048) (18,245) 211 (18,034)
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Contributions
by and
distributions
to owners
Share issue 1 150 - - - 151 - 151
Share based
payment - - - - 995 995 - 995
Total
contributions
by and
distributions
to owners 1 150 - - 995 1,146 - 1,146
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Changes in
ownership
Disposal of
subsidiary
with NCI - - - - - - 13 13
Total changes
in ownership
interests - - - - - - 13 13
Total
transactions
with owners
of the
Company 1 150 - - 995 1,146 13 1,159
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 30 June
2019
(unaudited) 558 358,044 50,695 (934) (49,293) 359,070 5,902 364,972
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 1
October 2018
(audited) 557 357,894 45,958 - (28,240) 376,169 5,678 381,847
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Comprehensive
income
for the year
(Loss)/profit
for
the year - - - - (83,857) (83,857) 777 (83,080)
Other
comprehensive
income - - 14,249 (3,566) - 10,683 (330) 10,353
Total
comprehensive
income for
the year - - 14,249 (3,566) (83,857) (73,174) 447 (72,727)
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Contributions
by and
distributions
to owners
Share issue 2 150 - - - 152 - 152
Share based
payment - - - - 1,181 1,181 - 1,181
Total
contributions
by and
distributions
to owners 2 150 - - 1,181 1,333 - 1,333
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Changes in
ownership
Disposal of
subsidiary
with NCI - - - - - - 13 13
Total changes
in ownership
interests - - - - - - 13 13
Total
transactions
with owners
of the
Company 2 150 - - 1,181 1,333 13 1,346
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
As at 30
September
2019
(audited) 559 358,044 60,207 (3,566) (110,916) 304,328 6,138 310,466
--------------- --------- ------------ ---------- ---------- ---------- -------------- ------------- ---------
Other reserves in this statement is an aggregation of Capital
redemption reserve and Foreign exchange reserve.
Consolidated Statement of Cash Flows for the period ended 30
June 2020
30 June 30 September
YTD Q3 2020 2019 2019
All figures in GBP000's (unaudited) (unaudited) (audited)
-------------------------------------------- ------------ ------------ --------------
Cash flows from operating activities
Loss for the period (23,196) (21,581) (83,080)
Adjustments for:
Depreciation and impairment of
property, plant and equipment 6,353 6,940 17,227
Amortisation and impairment of
intangible fixed assets 13,259 13,515 66,087
Loss/(gain) on sale of property,
plant and equipment 75 (31) (838)
Gain on sale of subsidiaries (5,564) - -
Finance income (89) (473) (368)
Finance costs 6,394 4,836 7,773
Other adjustments for non-cash
items (1,776) 68 68
Share of (profit)/loss of equity-accounted
investees, net of tax (205) 432 414
Foreign exchange losses 4,015 2,721 5,620
Share based payment expense 988 995 1,181
Tax (credit)/charge (113) 468 111
--------------------------------------------- ------------ ------------ --------------
141 7,890 14,195
Decrease/(increase) in trade and
other receivables 9,790 4,380 (12,516)
Increase in inventories (648) (3,023) (2,273)
Increase in biological assets (3,931) (5,848) (8,593)
(Decrease)/increase in trade and
other payables (3,175) (6,877) 3,968
(Decrease)/increase in provisions (18) - 261
--------------------------------------------- ------------ ------------ --------------
2,159 (3,478) (4,958)
Income taxes paid (1,667) (2,840) (4,253)
--------------------------------------------- ------------ ------------ --------------
Net cash flows from/(used in)
operating activities 492 (6,318) (9,211)
--------------------------------------------- ------------ ------------ --------------
Investing activities
Proceeds from sale of subsidiaries,
net of cash disposed of 5,025 - -
Acquisition of subsidiaries, net
of cash acquired - (6) (7)
Purchase of investments (373) (6,892) (7,020)
Receipts from disposal of investments 6,932 5,942 5,942
Purchase of property, plant and
equipment (5,235) (5,365) (7,850)
Proceeds from sales of intangible
assets 207 - -
Purchase of intangibles (3,249) (5,539) (7,964)
Proceeds from sales of other long-term
assets 1,776 - -
Proceeds from sale of fixed assets 123 273 1,131
Interest received 89 296 447
--------------------------------------------- ------------ ------------ --------------
Net cash flows from/(used) in
investing activities 5,295 (11,291) (15,321)
--------------------------------------------- ------------ ------------ --------------
Financing activities
Proceeds of share issues 42,978 1 2
Proceeds from bank or other borrowings 7,925 91,829 92,578
Share-issue costs recognised through
equity (1,312) - -
Repayment of bank borrowings (9,614) (70,459) (71,224)
Interest and finance charges paid (5,309) (3,305) (5,366)
Repayments of lease liabilities (1,914) (5) (5)
--------------------------------------------- ------------ ------------ --------------
Net cash inflow from financing
activities 32,754 18,061 15,985
--------------------------------------------- ------------ ------------ --------------
Net increase/(decrease) in cash
and cash equivalents 38,541 452 (8,547)
Cash and cash equivalents at beginning
of year 16,051 24,090 24,090
Effects of movements in exchange
rate on cash held (100) 331 508
--------------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at end
of year 54,492 24,873 16,051
--------------------------------------------- ------------ ------------ --------------
The Consolidated Statement of Cash Flows presents cash flows
from both Continuing and Discontinued operations
Of the cash balance at 30 June 2020 of GBP54,492,000, GBPnil has
been classified as held for sale (note 9)
Unaudited notes to the interim financial statements for period
ended 30 June 2020
1. Basis of preparation
Benchmark Holdings plc (the 'Company') is a company incorporated
domiciled in the United Kingdom. These consolidated interim
financial statements as at and for the nine months ended 30 June
2020 represents that of the Company and its subsidiaries (together
referred to as the 'Group').
These interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting, and should be
read in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 30 September 2019
('last annual financial statements'). They do not include all of
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. Statutory
accounts for the year ended 30 September 2019 were approved by the
Directors on 20 December 2019 and have been delivered to the
Registrar of Companies. The audit report received on those accounts
was unqualified and did not make a statement under section 498 of
the Companies Act 2006 but did contain an emphasis of matter
paragraph in relation to going concern.
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 30 June 2020 the Group had net assets of GBP316.4m (30
September 2019: GBP310.5m), including cash of GBP54.5m (30
September 2019: GBP16.1m) as set out in the consolidated balance
sheet. The Group made a loss for the year to date of GBP23.2m (12
months ending 30 September 2019: GBP83.1m). Drawings against the
Group's USD 15m revolving credit facility were GBPnil at 30 June
2020 (30 September 2019: GBPnil).
As noted in the Management Report, the impact of the Covid-19
pandemic has affected parts of the group's businesses to varying
degrees. The ultimate impact of the pandemic on industry, the
economy, Benchmark's markets and its businesses remains to some
extent uncertain. Our main markets have seen a continuation of the
trends observed in Q2, with weak shrimp markets, resilient salmon
markets and seabass/seabream markets which have experienced modest
impact from Covid-19. The Directors monitor available market
analysis and believe these conditions will remain for the rest of
the year and into 2021. As the outlook for the salmon sector
remains positive, and this underpins our Genetics and Health
businesses, the group is well placed to deal with the uncertain
global economic future ahead.
The directors have reviewed forecasts covering the period to
September 2021 including downside sensitivity assumptions in
relation to trading performance across the Group including supply,
demand and pricing of key raw materials and products and the timing
of trials relating to future products to assess the impact on the
Group's trading and cashflow forecasts and on the forecast
compliance with the covenants included within the Group's financing
arrangements. Cash resources have been boosted by the successful
disposal of the Improve International group during the period, the
post period end disposal of the FVG group, the vaccines
manufacturing business and FAI Farms Limited, and the ongoing cost
base following these transactions has been significantly
reduced.
The uncertainty relating to the future impact on the Group of
the virus outbreak has been separately considered as part of the
directors' assessment of the going concern assumption. The positive
preventative measures implemented by management at an early stage
in response to the pandemic continue to be in force where
necessary. In the downside scenario analysis performed, the
directors have considered the reasonably plausible impact of
Covid-19 on the Group's trading and cashflow forecasts, modelling
significant reductions in the revenues in the Advanced Nutrition
and Animal Health divisions in the period to September 2021. The
assumptions include a potential delay in launch of BMK08, delay in
the expansion of SPR shrimp and a short-term further reduction in
the demand for nutrition products. Mitigating measures within the
control of management were implemented early in the pandemic and
remain in place, including reductions in areas of discretionary
spend, temporary furlough of certain staff or reduced working
hours, deferral of capital projects and temporary hold on R&D
for non-imminent products. Furthermore, the voluntarily 20%
reduction in salary taken by the Board and Operating Board also
remains in place.
It is difficult to predict the overall outcome and impact of the
pandemic, but under all of the above scenario analysis, the Group
has sufficient liquidity and resources throughout the period under
review whilst still maintaining adequate headroom against the
borrowing covenants. The directors therefore 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 interim financial
statements. Accordingly, the interim financial statements have been
prepared on a going concern basis.
In the last annual financial statements it was disclosed that
although the Directors believed it remained appropriate to prepare
the financial statements on a going concern basis, a material
uncertainty existed that may have cast significant doubt on the
Group's and Company's ability to continue as a going concern and
therefore to continue realising their assets and discharging
1. Basis of preparation (continued)
its liabilities in the normal course of business. The last
annual financial statements did not include any adjustments that
would result from the basis of preparation being inappropriate.
Based on the review and financing activities described above, and
the greatly improved cash reserves now available, the Directors no
longer believe this material uncertainty exists.
Accounting policies
The accounting policies adopted are consistent with those used
in preparing the consolidated financial statements for the
financial year ended 30 September 2019.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total earnings.
Adoption of new and revised standards
Since 1 October 2019, IFRS 16 Leases has been applied. The
effects of this are set out in note 2.
The Group does not consider that any other standards, amendments
or interpretations issued by the IASB, but not yet applicable, will
have a significant impact on the financial statements.
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-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 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 (see note 13).
Use of estimates and judgements
The preparation of interim 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 interim 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 2019.
2. Changes in significant accounting policies
The Group has adopted IFRS 16 Leases from 1 October 2019.
IFRS 16 superseded the previous lease guidance including IAS 17:
"Leases" and related interpretations. It requires all leases to be
recognised on the Balance Sheet, with certain exceptions for
low-value leases and leases with a term of less than 12 months.
The impact of IFRS 16 on the Group has been to recognise a lease
liability representing its obligation to make lease payments and a
corresponding right-of-use asset representing its right to use the
underlying asset in the Balance Sheet for leases currently
classified as operating leases, except for short-term leases and
leases of low value assets. The nature of expenses related to these
leases has now changed because the Group now recognises a
depreciation charge for right of use assets and interest expense on
lease liabilities.
IFRS 16 has been adopted for the year ending 30 September 2020
using the modified retrospective approach. The right-of-use asset
recognised on transition has been measured at an amount materially
equal to the lease liability, which has been measured at the
present value of the future lease payments discounted using the
discount rate implicit in the lease (or if that rate could not be
readily determined, the lessee's incremental borrowing rate).
Therefore, no adjustment to the opening balance of retained
earnings at 1 October 2019 has been necessary along with no
restatement of comparative information.
2. Changes in significant accounting policies (continued)
The impact of IFRS 16 on the Income Statement for the 9-month
period ended 30 June 2020 for continuing operations has been an
increase to operating profit of GBP1.5m, an increase in finance
costs of GBP0.3m, and in increase in depreciation of GBP1.0m and no
change in loss on discontinued operations.
For arrangements previously classified as finance leases, where
the Group is a lessee, as the Group had already recognised an asset
and a related finance lease liability for the lease arrangement,
there has been no impact on the amounts recognised in the Group's
Consolidated Financial Statements, at 1 October 2019.
When measuring lease liabilities that were previously classified
as operating leases, the Group discounted lease payments using
relevant incremental borrowing rates at 1 October 2019. The
weighted average applied is 5.6%.
C hanges in significant accounting policies
Reconciliation of right of use assets and liabilities
All figures in GBP000's
------------------------------------------------------ -------
Operating lease commitments disclosed at 30 September
2019 9,528
Recognition exemption for leases of low-value assets (3)
Recognition exemption for leases with less than
12 months of lease term remaining at transition (914)
Discounted using the incremental borrowing rate
at 1 October 2019 (2,473)
Finance lease liabilities recognised at 30 September
2019 590
Recognised within assets held for sale (2,069)
Lease liabilities recognised at 1 October 2019 4,659
------------------------------------------------------ -------
The Group presents lease liabilities within Loans and
Borrowings. The carrying amount included within these at 30 June
2020 is as follows:
All figures in GBP000's
------------------------- ------
Current 2,482
Non-current 6,656
Total 9,138
------------------------- ------
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 as follows:
-- Animal Health Division - provides veterinary services,
environmental services diagnostics and animal health products to
global aquaculture, and manufactures licenced veterinary vaccines
and vaccine components;
-- Benchmark Genetics Division - 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 Animal Nutrition Division - manufactures and
provides technically advanced nutrition and health products to the
global aquaculture industry.
In addition to the above, reported as "all other segments" is
the Knowledge Services division. The division is currently being
divested, but has been engaged in providing sustainable food
production consultancy, technical consultancy and assurance
services and promotes sustainable food production and ethics
through online news and technical publications for the
international agriculture and food processing sectors and through
delivery of training courses to the industries.
In order to reconcile the segmental analysis to the Consolidated
Income Statement, Corporate and Inter-segment sales are also shown.
C orporate represents revenues earned from recharging certain
central costs to the operating divisions, together with unallocated
central costs.
3. Segment information (continued)
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
YTD Q3 YTD Q3
Q3 2020 Q3 2019 2020 2019 YTD 2019
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------------------- --------------- --------------- --------------- --------------- -------------
Animal Health 2,709 3,972 9,431 11,122 17,742
Genetics 7,166 7,116 29,670 29,718 39,696
Advanced Animal Nutrition 15,969 13,588 47,264 54,488 76,776
All other segments 1,955 4,355 8,876 12,619 15,881
Corporate 1,209 1,441 3,993 5,031 6,534
Inter-segment sales (1,211) (1,813) (4,480) (6,068) (7,890)
Total 27,797 28,659 94,754 106,910 148,739
---------------------------- --------------- --------------- --------------- --------------- -------------
Segmental Adjusted EBITDA
YTD Q3 YTD Q3
Q3 2020 Q3 2019 2020 2019 YTD 2019
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------------------- --------------- --------------- --------------- --------------- -------------
Animal Health (2,847) (3,214) (10,535) (9,352) (10,197)
Genetics 1,185 811 9,794 5,740 10,075
Advanced Animal Nutrition 2,787 1,361 6,086 10,928 15,406
All other segments (299) 226 140 963 1,264
Corporate (519) (328) (1,917) (1,930) (2,823)
Total 307 (1,144) 3,568 6,349 13,725
---------------------------- --------------- --------------- --------------- --------------- -------------
Reconciliations of segmental information to IFRS measures
Revenue
YTD Q3 YTD Q3 YTD 2019
Q3 2020 Q3 2019 2020 2019 Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
--------------------------------- --------------- --------------- --------------- --------------- -------------
Total revenue per segmental
information 27,797 28,659 94,754 106,910 148,739
Less: revenue from discontinued
operations (3,255) (5,905) (13,188) (16,800) (21,963)
---------------------------------
Consolidated revenue 24,542 22,754 81,566 90,110 126,776
--------------------------------- --------------- --------------- --------------- --------------- -------------
Reconciliation of Reportable Segments Adjusted EBITDA to Loss before
taxation from continuing operations
-----------------------------------------------------------------------------------------------------
YTD
YTD Q3 YTD Q3 2019
Q3 2020 Q3 2019 2020 2019 Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
--------------------------------- --------------- --------------- --------------- --------------- -------------
Total reportable segment
Adjusted EBITDA 1,125 (1,042) 5,345 7,316 15,284
Other Segment and Corporate
Adjusted EBITDA (818) (102) (1,777) (967) (1,559)
--------------------------------- --------------- --------------- --------------- --------------- -------------
307 (1,144) 3,568 6,349 13,725
Less: Adjusted EBITDA from
discontinued operations 37 (265) (388) (428) (192)
--------------------------------- --------------- --------------- --------------- --------------- -------------
Adjusted EBITDA from continuing
operations 344 (1,409) 3,180 5,921 13,533
Exceptional including
acquisition
related items (581) (71) (749) (71) (581)
Depreciation and impairment (1,831) (1,610) (5,447) (4,664) (8,080)
Amortisation and impairment (4,479) (4,291) (12,880) (12,767) (62,045)
Net finance costs (1,988) (4,603) (11,544) (6,645) (12,054)
Loss before taxation from
continuing operations (8,535) (11,984) (27,440) (18,226) (69,227)
--------------------------------- --------------- --------------- --------------- --------------- -------------
*See note 5.
4. Revenue
The Group's operations and main revenue streams are those
described in its financial statements to 30 September 2019. 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 30 June 2020 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Sale of
goods 1,986 6,456 15,953 177 - - 24,572 899 23,673
Provision
of services 643 822 - 1,760 - - 3,225 2,356 869
Inter-segment
sales 80 (112) 16 18 1,209 (1,211) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
2,709 7,166 15,969 1,955 1,209 (1,211) 27,797 3,255 24,542
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
3 months ended 30 June 2019 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Sale of
goods 2,119 6,348 13,579 322 - - 22,368 403 21,965
Provision
of services 1,684 749 - 3,808 50 - 6,291 5,502 789
Inter-segment
sales 169 19 9 225 1,391 (1,813) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
3,972 7,116 13,588 4,355 1,441 (1,813) 28,659 5,905 22,754
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
9 months ended 30 June 2020 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Sale of
goods 5,210 26,406 47,216 431 - - 79,263 1,219 78,044
Provision
of services 3,798 3,264 - 8,407 22 - 15,491 11,969 3,522
Inter-segment
sales 423 - 48 38 3,971 (4,480) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
9,431 29,670 47,264 8,876 3,993 (4,480) 94,754 13,188 81,566
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
9 months ended 30 June 2019 (unaudited)
---------------- ------------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
Sale of goods 6,239 27,040 54,450 964 - - 88,693 1,327 87,366
Provision
of services 4,471 2,556 - 11,067 123 - 18,217 15,473 2,744
Inter-segment
sales 412 122 38 588 4,908 (6,068) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
11,122 29,718 54,488 12,619 5,031 (6,068) 106,910 16,800 90,110
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
4. Revenue (continued)
Sale of goods and provision of services (continued)
12 months ended 30 September 2019 (audited)
---------------- ------------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment Discontinued Continued
in GBP000's Health Genetics Nutrition segments Corporate sales Total Restated* Restated*
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
Sale of
goods 10,582 36,270 76,707 1,168 - - 124,727 2,202 122,525
Provision
of services 6,582 3,285 - 13,978 167 - 24,012 19,761 4,251
Inter-segment
sales 578 141 69 735 6,367 (7,890) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
17,742 39,696 76,776 15,881 6,534 (7,890) 148,739 21,963 126,776
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
*See note 5.
Primary geographical markets
3 months ended 30 June 2020 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Faroe Islands - 1,599 3 - - - 1,602 - 1,602
Greece - 20 1,031 - - - 1,051 - 1,051
Norway 322 3,098 205 - - - 3,625 318 3,307
India 3 - 2,085 - - - 2,088 - 2,088
UK 658 1,225 20 1,341 - - 3,244 1,710 1,534
Singapore - - 2,390 - - - 2,390 - 2,390
Ecuador - - 1,550 - - - 1,550 - 1,550
Chile 1,084 - - - - - 1,084 483 601
Rest of
Europe 537 890 775 509 - - 2,711 653 2,058
Rest of
World 25 446 7,894 87 - - 8,452 91 8,361
Inter-segment
sales 80 (112) 16 18 1,209 (1,211) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
2,709 7,166 15,969 1,955 1,209 (1,211) 27,797 3,255 24,542
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
3 months ended 30 June 2019 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Faroe Islands - 1,907 - - - - 1,907 - 1,907
Greece 2 22 1,891 - - - 1,915 - 1,915
Norway 961 2,719 176 - - - 3,856 396 3,460
India - - 1,614 - - - 1,614 - 1,614
UK 803 331 46 2,351 50 - 3,581 2,892 689
Singapore - - 1,275 - - - 1,275 - 1,275
Ecuador - - 2,115 - - - 2,115 - 2,115
Chile 1,478 301 16 - - - 1,795 569 1,226
Rest of
Europe 391 1,437 664 1,328 - - 3,820 1,478 2,342
Rest of
World 168 380 5,782 451 - - 6,781 570 6,211
Inter-segment
sales 169 19 9 225 1,391 (1,813) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
3,972 7,116 13,588 4,355 1,441 (1,813) 28,659 5,905 22,754
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
4. Revenue (continued)
Primary geographical markets (continued)
9 months ended 30 June 2020 (unaudited)
---------------- -----------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
Faroe Islands 34 5,165 4 - - - 5,203 - 5,203
Greece - 61 5,025 - - - 5,086 - 5,086
Norway 1,429 13,974 446 - - - 15,849 1,145 14,704
India 6 - 4,642 - - - 4,648 3 4,645
UK 1,911 5,581 74 5,795 22 - 13,383 7,138 6,245
Singapore 7 - 4,255 - - - 4,262 9 4,253
Ecuador - - 5,412 - - - 5,412 - 5,412
Chile 3,256 24 16 - - - 3,296 1,158 2,138
Rest of
Europe 1,535 3,324 3,870 2,546 - - 11,275 3,167 8,108
Rest of
World 830 1,541 23,472 497 - - 26,340 568 25,772
Inter-segment
sales 423 - 48 38 3,971 (4,480) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
9,431 29,670 47,264 8,876 3,993 (4,480) 94,754 13,188 81,566
---------------- -------- ---------- ----------- ---------- ----------- --------------- ------- -------------- -----------
9 months ended 30 June 2019 (unaudited)
---------------- ------------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- -------------- -----------
Faroe Islands 126 6,323 1 - - - 6,450 - 6,450
Greece 19 66 6,023 - - - 6,108 - 6,108
Norway 1,922 14,158 381 - - - 16,461 1,160 15,301
India - - 11,259 - - - 11,259 - 11,259
UK 2,131 2,757 175 7,082 123 - 12,268 8,718 3,550
Singapore 17 - 6,724 - - - 6,741 17 6,724
Ecuador - - 6,457 - - - 6,457 - 6,457
Chile 3,763 1,966 33 - - - 5,762 1,190 4,572
Rest of
Europe 1,857 3,276 5,711 3,765 - - 14,609 4,352 10,257
Rest of
World 875 1,049 17,686 1,185 - - 20,795 1,363 19,432
Inter-segment
sales 412 123 38 587 4,908 (6,068) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
11,122 29,718 54,488 12,619 5,031 (6,068) 106,910 16,800 90,110
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
4. Revenue (continued)
Primary geographical markets (continued)
12 months ended 30 September 2019 (audited)
---------------- ------------------------------------------------------------------------------------------------------------------
Advanced All
All figures Animal Animal other Inter-segment
in GBP000's Health Genetics Nutrition segments Corporate sales Total Discontinued Continued
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
Faroe Islands 126 8,248 2 - - - 8,376 - 8,376
Greece 20 114 7,214 4 - - 7,352 3 7,349
Norway 2,656 19,074 466 8 - - 22,204 1,548 20,656
India - - 12,798 - - - 12,798 - 12,798
UK 2,831 3,397 255 8,544 167 - 15,194 10,718 4,476
Singapore 17 - 9,062 - - - 9,079 17 9,062
Ecuador - - 9,555 - - - 9,555 - 9,555
Chile 5,392 1,969 33 - - - 7,394 1,619 5,775
Rest of
Europe 3,024 4,943 3,946 4,733 - - 16,646 5,689 10,957
Rest of
World 3,098 1,810 33,376 1,857 - - 40,141 2,369 37,772
Inter-segment
sales 578 141 69 735 6,367 (7,890) - - -
----------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
17,742 39,696 76,776 15,881 6,534 (7,890) 148,739 21,963 126,776
---------------- -------- ---------- ----------- ---------- ----------- --------------- -------- -------------- -----------
* See note 5.
5. Discontinued activities
In June 2019 the Group announced a programme of structural
efficiencies which focused on the disposal and discontinuation of
non-core activities. This programme primarily includes the
businesses of Knowledge Services Division and the veterinary
services business within Animal Health Division.
During Q1, a small non-core business within Advanced Animal
Nutrition was put up for sale and a business within the Corporate
category was closed. During Q2 research and development operations
at two sites in the Animal Health division were closed. FY 2019
numbers have been restated to reflect these changes to the
continuing business since they were previously reported. Q3 2019
and Q3 YTD 2019 figures have not been previously reported
separately and so are not restated.
Consequently, these operations have been classified as
discontinued and part of the disposal group is presented as held
for sale (See note 9). The disposal group includes assets and
liabilities within the Knowledge Services, Animal Health and
Advanced Animal Nutrition segments.
Summary of restatement of FY 2019 results as reported at Q1, Q2
and Q3 financial statements
Discontinued
Continuing operations operations
Loss from Loss from
Adjusted continuing discontinued
All figures in GBP000's Revenue EBITDA operations operations
---------------------------------- -------- --------- ------------ --------------
As stated in FY 2019 financial
statements 127,343 12,051 (73,291) (9,789)
Reclassified in Q1 (567) 899 2,841 (2,841)
---------------------------------- -------- --------- ------------ --------------
As restated in Q1 2020 financial
statements 126,776 12,950 (70,450) (12,630)
Reclassified in Q2 - 2 583 (583)
---------------------------------- -------- --------- ------------ --------------
As restated in Q2 2020 financial
statements 126,776 12,952 (69,867) (13,213)
---------------------------------- -------- --------- ------------ --------------
5. Discontinued activities (continued)
The disposals, together with the cost reduction/cost containment
plan and enhanced working capital management will allow the Company
to reallocate resources to priority revenue generating strategic
projects and to maintain adequate headroom. The timing and proceeds
from these actions remain part of the plan to maintain sufficient
liquidity to execute the Group's product development programme and
to support its Continuing Operations.
Significant progress in selling the disposal group had been made
by 30 June 2020. On 23 June 2020, the Group divested its global
provider of Continuing Professional Development training for
veterinary professionals, Improve International Limited and its
subsidiaries ("Improve"). Total consideration for Improve is up to
GBP12.8m of which GBP11.8m has been recognised at fair value (see
table below). In addition, on 1 January 2020, the Group divested
its TomAlgae subsidiary for nominal proceeds. The business was in
the R&D phase and required significant further investment to
bring a commercial product to market.
On 7 February 2020, the Group disposed of Aquaculture UK, its
conferencing business, for initial consideration of GBP1.5m which
could rise to GBP2.0m depending on the revenue outcome of the next
event. Sales of the Group's Online News Publications, for a
combined total cash consideration of GBP0.6m have completed in the
period.
Further transactions since the reporting date are detailed in
note 12.
Effects of disposals of subsidiaries on the financial position
of the Group
All figures in GBP000's Improve TomAlgae Total
---------------------------------------------- --------- ---------- --------
Assets
Property, plant and equipment (including
Right of use assets) 1,588 - 1,588
Intangible assets 4,109 - 4,109
Inventories 164 68 232
Trade and other receivables 4,928 6 4,934
Cash and cash equivalents 4,363 243 4,606
Trade and other payables (9,048) (316) (9,364)
Corporation tax liability (59) (1) (60)
Deferred tax (178) - (178)
Net assets and liabilities 5,867 - 5,867
---------------------------------------------- --------- ---------- --------
Total consideration 11,760 22 11,782
Less: Fair value of contingent consideration (1,778) (22) (1,800)
Less: Disposal costs deducted from cash
proceeds (351) - (351)
---------------------------------------------- --------- ---------- --------
Consideration received in cash 9,631 - 9,631
Cash and cash equivalents disposed of (4,363) (243) (4,606)
Net cash inflow/(outflow) 5,268 (243) 5,025
---------------------------------------------- --------- ---------- --------
5. Discontinued activities (continued)
Results from discontinued operations
FY 2019
YTD Q3 YTD Q3
Q3 2020 Q3 2019 2020 2019 Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------------------------- ---- -------------- -------------- -------------- -------------- ------------
Revenue 3,255 5,905 13,188 16,800 21,963
Cost of sales (1,670) (3,275) (7,017) (9,582) (12,625)
----------------------------------------
Gross profit 1,585 2,630 6,171 7,218 9,338
Research and development costs (15) (88) (140) (180) (263)
Other operating costs (1,607) (2,277) (5,643) (6,610) (8,883)
---------------------------------------- -------------- -------------- -------------- -------------- ------------
Adjusted EBITDA (37) 265 388 428 192
Exceptional - restructuring/acquisition
related items 4,713 (291) 5,111 (291) (745)
---------------------------------------- -------------- -------------- -------------- -------------- ------------
EBITDA 4,676 (26) 5,499 137 (553)
Depreciation and impairment (687) (552) (906) (2,276) (9,147)
Amortisation and impairment (379) (221) (379) (748) (4,042)
---------------------------------------- -------------- -------------- -------------- -------------- ------------
Operating loss 3,610 (799) 4,214 (2,887) (13,742)
Finance costs (24) - (83) - -
---------------------------------------- -------------- -------------- -------------- -------------- ------------
Profit/(loss) before taxation 3,586 (799) 4,131 (2,887) (13,742)
Tax on profit/(loss) (27) (19) (110) (24) 529
---------------------------------------- -------------- -------------- -------------- -------------- ------------
Profit/(loss) from discontinued
operations 3,559 (818) 4,021 (2,911) (13,213)
---------------------------------------- -------------- -------------- -------------- -------------- ------------
Exceptional - restructuring/acquisition related items -
discontinued operations
FY 2019
YTD Q3 YTD Q3
Q3 2020 Q3 2019 2020 2019 Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------------------------- ---- -------------- -------------- -------------- -------------- ------------
Profit on disposal of business 482 - 1,829 - -
Profit on disposal of subsidiaries 5,564 5,564
Provisions for onerous leases - - - - (349)
Salary costs (447) (89) (741) (89) (99)
Cost of sales - (202) (22) (202) (297)
Legal and professional fees (760) - (1,040) - -
Other (126) - (479) - -
Total exceptional items
recognised on discontinued
operations 4,713 (291) 5,111 (291) (745)
---------------------------------------- -------------- -------------- -------------- -------------- ------------
5. Discontinued activities (continued)
Results from discontinued operations by segment
Advanced
Animal Knowledge Animal Total
Health Services Nutrition Corporate Discontinued
Q3 2020 Q3 2020 Q3 2020 Q3 2020 Q3 2020
All figures in
GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------- ---- ----------------- ----------------- ----------------- ----------------- -----------------
Revenue 1,318 1,937 - - 3,255
Adjusted EBITDA 207 (234) - (10) (37)
Operating
profit/(loss) (66) 3,841 12 (177) 3,610
----------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Advanced
Animal Knowledge Animal Total
Health Services Nutrition Corporate Discontinued
Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q3 2019
All figures in
GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------- ---- ----------------- ----------------- ----------------- ----------------- -----------------
Revenue 1,614 4,129 114 48 5,905
Adjusted EBITDA 63 354 (86) (66) 265
Operating loss (118) (504) (110) (67) (799)
----------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Advanced
Animal Knowledge Animal Total
Health Services Nutrition Corporate Discontinued
All figures in YTD Q3 YTD Q3 YTD Q3 YTD Q3 YTD Q3
GBP000's 2020 (unaudited) 2020 (unaudited) 2020 (unaudited) 2020 (unaudited) 2020 (unaudited)
----------------- ---- ----------------- ----------------- ----------------- ----------------- -----------------
Revenue 4,325 8,838 2 23 13,188
Adjusted EBITDA 66 591 (118) (151) 388
Operating
profit/(loss) (543) 5,532 (369) (406) 4,214
----------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Advanced
Animal Knowledge Animal Total
Health Services Nutrition Corporate Discontinued
All figures in YTD Q3 YTD Q3 YTD Q3 YTD Q3 YTD Q3
GBP000's 2019 (unaudited) 2019 (unaudited) 2019 (unaudited) 2019 (unaudited) 2019 (unaudited)
----------------- ---- ----------------- ----------------- ----------------- ----------------- -----------------
Revenue 4,520 12,030 129 121 16,800
Adjusted EBITDA (146) 1,193 (415) (204) 428
Operating loss (696) (1,497) (488) (206) (2,887)
----------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Advanced
Animal Knowledge Animal Total
Health Services Nutrition Corporate Discontinued
FY 2019 FY 2019 FY 2019 FY 2019 FY 2019
All figures in Restated* Restated* Restated* Restated* Restated*
GBP000's (audited) (audited) (audited) (audited) (audited)
----------------- ---- ----------------- ----------------- ----------------- ----------------- -----------------
Revenue 6,255 15,141 400 167 21,963
Adjusted EBITDA (294) 1,386 (609) (291) 192
Operating loss (1,030) (9,218) (3,201) (293) (13,742)
----------------------- ----------------- ----------------- ----------------- ----------------- -----------------
6. Exceptional - restructuring/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.
FY 2019
YTD Q3 YTD Q3
Q3 2020 Q3 2019 2020 2019 Restated*
All figures in GBP000's (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------------------- ---- -------------- -------------- -------------- -------------- ------------
Acquisition related
items - 8 - 8 82
Exceptional restructuring
costs (581) (79) (749) (79) (663)
Total exceptional
items (581) (71) (749) (71) (581)
---------------------------------- -------------- -------------- -------------- -------------- ------------
* See note 5.
Exceptional expenses in Q3 2020 include GBP514,000 (YTD Q3 2020:
GBP676,000) of staff costs and GBP67,000 (YTD Q3 2020: GBP73,000)
of legal and professional costs relating to the ongoing
restructuring of the group.
7. Taxation
FY 2019
Q3 2020 Q3 2019 Restated*
Q3 YTD Q3 YTD
All figures in GBP000's (unaudited) (unaudited) 2020 (unaudited) 2019 (unaudited) (audited)
-------------------------- ---- -------------- -------------- ------------------ ------------------ ------------
Current tax expense
Analysis of charge in
period
Current tax:
Current income tax expense
on profits for the period (328) (879) (2,634) (4,053) (4,258)
Adjustment in respect of
prior periods - - - - (76)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Total current tax charge (328) (879) (2,634) (4,053) (4,334)
Deferred tax expense
Origination and reversal
of temporary differences 908 1,182 2,857 3,609 4,499
Deferred tax movements in
respect of prior periods - - - - (805)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Total deferred tax credit 908 1,182 2,857 3,609 3,694
Total tax credit/(charge)
on continuing operations 580 303 223 (444) (640)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
* see note 5
8. Earnings/loss per share
Basic earnings/loss per share is calculated by dividing the
profit or loss attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares in issue
during the period.
FY 2019
Q3 2020 Q3 2019 Restated*
Q3 YTD Q3 YTD
(unaudited) (unaudited) 2020 (unaudited) 2019 (unaudited) (audited)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
(Loss)/profit attributable
to equity holders of the
parent (GBP000)
Continuing operations (7,972) (11,702) (27,404) (19,137) (70,644)
Discontinued operations 3,559 (818) 4,021 (2,911) (13,213)
Total (4,413) (12,520) (23,383) (22,048) (83,857)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Weighted average number
of shares in issue (thousands) 667,596 558,118 611,301 557,721 557,887
Basic earnings/(loss)
per share (pence)
Continuing operations (1.19) (2.10) (4.48) (3.43) (12.66)
Discontinued operations 0.53 (0.14) 0.65 (0.52) (2.37)
Total (0.66) (2.24) (3.83) (3.95) (15.03)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
* see note 5.
Diluted earnings/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.
At 30 June 2020, a total of 2,244,476 potential ordinary shares
have not been included within the calculation of statutory diluted
loss per share for the period (30 September 2019: 2,962,168) as
they are anti-dilutive. These potential ordinary shares could
dilute earnings/loss per share in the future.
9. Assets and liabilities held for sale
As stated in note 5, during the previous financial year,
management committed to a plan to sell or close certain businesses
. Where, for the businesses concerned, the applicable criteria for
inclusion as held for sale have been met the assets and liabilities
of these businesses have been presented as held for sale.
Assets held for sale
All figures in GBP000's
--------------------------------------- --------
Property, plant and equipment 1,977
Right of use assets 743
Intangible assets 496
Deferred tax asset 267
Inventories 580
Biological and agricultural assets 207
Trade and other receivables 5,542
Cash and cash equivalents -
Total Assets held for sale 9,812
---------------------------------------- --------
Labilities directly associated
with the assets held for sale
All figures in GBP000's
--------------------------------------- --------
Trade and other payables (2,452)
Loans and borrowings (1,321)
Corporation tax liability (11)
Provisions (15)
---------------------------------------- --------
Total liabilities directly associated
with the assets held for sale (3,799)
---------------------------------------- --------
Measurement of fair values
Fair value hierarchy - The fair value measurement for the
disposal group has been categorized as a Level 3 fair value based
on the inputs to the valuation technique used.
Valuation technique and significant unobservable inputs - A
market approach valuation technique was applied in measuring the
fair value of the assets and liabilities held for sale as adjusted
for intercompany and cash balances .
10. Loans and borrowings
The Group's borrowing facilities includes a USD 15m RCF provided
by DNB Bank ASA (50%) and HSBC UK Bank PLC (50%). At 30 June 2020
the whole facility (USD 15m) was undrawn.
11. Share capital and share premium
Additional
paid-in
Share share
Number Capital capital
Allotted, called up and fully paid GBP000 GBP000
------------------------------------ ------------ --------- -----------
Ordinary shares of 0.1 penny each
Balance at 30 September 2019 558,741,439 559 358,044
Shares issued through placing and
open offer 107,440,766 107 41,557
Exercise of share options 1,446,864 2 -
Balance at 30 June 2020 667,629,069 668 399,601
------------------------------------ ------------ --------- -----------
On 19 February 2020, the Company issued 91,000,000 new Ordinary
Shares by way of a placing and 16,440,766 new Ordinary Shares by
way of an open offer to qualifying shareholders, both at an issue
price of 40p. Gross proceeds of GBP36.4m for the placing shares and
GBP6.6m for the open offer shares were received 19 and 20 February
2020 respectively. Non-recurring costs of GBP1.3m were incurred in
relation to the share issues and this has been charged to the share
premium account.
12. Subsequent event
After the period end, further progress on the Group's programme
of structural efficiencies has been made. On 1 July 2020 the Group
completed the sale of Fish Vet Group Limited and its subsidiaries
to Pharmaq, part of the global animal health company Zoetis, for a
total cash consideration of between GBP14.4m and GBP14.7m. The sale
comprises Benchmark's veterinary and diagnostic services activities
in the UK, Ireland, Norway and Chile.
On 31 July 2020, the Group completed the sale of its vaccine
manufacturing facility at Braintree, UK to Cell and Gene Therapy
Catapult for GBP16m in cash. Exit and transaction costs are
estimated to be c.GBP4m. This is part of a GBP100m investment by
the UK Government to develop the Cell and Gene Therapy Catapult
Manufacturing Innovation Centre to manufacture millions of doses of
COVID-19 vaccines per month. On the same date, t he Group sold its
publishing business for cash consideration of GBP0.1m.
On 10 August, the Group completed the sale of its subsidiary FAI
Farms Limited whose activities include consultancy in the food and
farming sectors, research and development in sustainable food
production, and commercial farming. The business was sold to
members of its management team for cash consideration was
GBP0.1m.
On 24 July 2020, the Group exited a vaccine development
agreement with Evax AG. In settlement, the Group will receive
consideration of GBP1.0m receivable in September 2020 and up to a
further GBP1.0m depending on certain future conditions being
met.
13. Alternative profit measures and other metrics
Management has presented the performance measures Adjusted
EBITDA, 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, exceptional items and acquisition related expenditure
and is shown on the Income Statement.
Adjusted Operating Profit/Loss is operating loss before
exceptional items including acquisition related items and
amortisation and impairment of intangible assets excluding
development costs as reconciled below.
Adjusted Profit/Loss Before Tax is earnings before tax,
amortisation and impairment of intangibles assets excluding
development costs, exceptional items and acquisition related
expenditure 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.
Reconciliation of Adjusted Operating Profit/(Loss) to Operating
Loss
Continuing operations
FY 2019
Q3 2020 Q3 2019 Restated*
Q3 YTD Q3 YTD
All figures in GBP000's (unaudited) (unaudited) 2020 (unaudited) 2019 (unaudited) (audited)
-------------------------- ---- -------------- -------------- ------------------ ------------------ ------------
Revenue 24,542 22,754 81,566 90,110 126,776
Cost of sales (14,425) (11,070) (42,352) (45,113) (60,303)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Gross profit 10,117 11,684 39,214 44,997 66,473
Research and development
costs (1,618) (3,537) (8,297) (9,064) (12,587)
Other operating costs (7,969) (9,389) (27,942) (29,580) (39,939)
Depreciation and impairment (1,831) (1,610) (5,447) (4,664) (8,080)
Amortisation of - - - - -
capitalised
development costs
Share of profit of equity
accounted investees net
of tax (186) (167) 205 (432) (414)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Adjusted Operating
(Loss)/Profit (1,487) (3,019) (2,267) 1,257 5,453
Exceptional - restructuring
acquisition related items (581) (71) (749) (71) (581)
Amortisation and impairment
of intangible assets excluding
development costs (4,479) (4,291) (12,880) (12,767) (62,045)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Operating loss (6,547) (7,381) (15,896) (11,581) (57,173)
-------------------------------- -------------- -------------- ------------------ ------------------ ------------
Reconciliation of Loss Before Taxation to Adjusted Loss Before
Tax
Continuing operations
FY 2019
Q3 2020 Q3 2019 Restated*
Q3 YTD Q3 YTD
All figures in GBP000's (unaudited) (unaudited) 2020 (unaudited) 2019 (unaudited) (audited)
--------------------------- ---- -------------- -------------- ----------------- ------------------ ------------
Loss before taxation (8,535) (11,984) (27,440) (18,226) (69,227)
Exceptional -
restructuring/acquisition
related items 581 71 749 71 581
Amortisation and
impairment of intangible
assets excluding
development costs 4,479 4,291 12,880 12,767 62,045
--------------------------------- -------------- -------------- ----------------- ------------------ ------------
Adjusted Loss Before
Tax (3,475) (7,622) (13,811) (5,388) (6,601)
--------------------------------- -------------- -------------- ----------------- ------------------ ------------
* See note 5.
13. Alternative profit measures and other metrics (continued)
Liquidity
Following the refinancing in June 2019 a key financial covenant
is a minimum liquidity of GBP10m, defined as cash plus undrawn
facilities.
30 June 2020
All figures in GBP000's (unaudited)
--------------------------- --------------
Cash and cash equivalents 54,492
Undrawn bank facility 12,128
66,620
--------------------------- --------------
14. Net debt
Net debt is cash and cash equivalents less loans and borrowings
excluding balances held for sale.
30 June 30 June 30 September
2020 2019 2019
All figures in GBP000's (unaudited) (unaudited) (audited)
------------------------------------ ------------ ------------ --------------
Cash and cash equivalents 54,492 24,873 16,051
Loans and borrowings - current (4,809) (2,283) (3,231)
Loans and borrowings - non-current (104,335) (100,882) (99,961)
(54,652) (78,292) (87,141)
------------------------------------ ------------ ------------ --------------
Following the adoption of IFRS 16 from 1 October 2019, lease
obligations of GBP8.6m (30 June 2019: GBPnil; 30 September 2019:
GBPnil) have been included in loans and borrowings above relating
to operating lease arrangements.
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