Animal-focused biotech Benchmark (BMK:AIM) dives 13.7% to 94p as investors vote with their feet over a maiden £1.4 million loss in its first year as a public company. This was despite revenues growing 28% to £35.4 million in the 12 months to October and represents a steep £6.3 million reverse from last the previous year's £4.9 million pre-tax profit.
Management at the animal health and breading specialist remain upbeat and pinpoint the big hike in research and development (R&D) into new areas, impossible to say whether ploughing cash from a profitable animal health business into sustainability science and technical publishing will pay-off.
The investment that has eaten into Benchmark’s profits has created a different proposition from the one that landed on AIM just over a year ago (18 Dec ’13).
It has larger manufacturing capabilities, interests in aquaculture and boosted the number of candidates in its pipeline to 47 from 30. Three products were launching on the market during the period.
Benchmark floated on AIM, after raising £27.5 million at 64p per share, to fund growth, and a further £70 million was tapped from investors at 84p per share in November, largely to acquire the SalmoBreed fish genetics business. In the year to October spent £6.5 million on R&D, including expanding headcount by 40% to 222. A further £20 million was allocated to improving its manufacturing capabilities in Edinburgh and Essex, while is also bought salmon breeding and genetics companies SalmoBreed and Stofnfiskur.
Acquisitions will continue to play a role in Benchmark’s growth, but its £16.5 million net cash will be focused on getting more of its treatments to market.