Benchmark reports loss, cites reduced demand for mature products
Source - SMW
Benchmark Holdings announced a loss of £7.1 million for the year ended 30 September 2017, despite reporting like-for-like revenues rose 13% to £140m during the year.
The £7.1 million loss of the year, however, represents a 61% improvement on the 18.3 million loss sustained in 2016.
Revenues for the year rose 28% - 13% on a like for like basis - while adjusted EBITDA rose 9% to £10m from £9.2m in the previous year. Like-for-like adjusted EBITDA was reported at 10m for the year, in line with adjusted EBITDA in 2016.
Total Group operating costs increased by 32% to £39.3m compared to £29.9m in 2016. 'This increase reflects the impact of including a full year of INVE's costs, a reduced credit from forex gains and a key driver of the balance was an increase in average headcount from 703 in 2016 to 881 in 2017,' Benchmark said in a preliminary trading statement. Year-end headcount was 952 compared to 884 in 2016.
A 39% slump in sales of health products amid falling demand for mature products weighed on revenue and offset gains somewhat in the company's advanced nutrition business, which was driven by increased market share and demand for higher margin live feed replacement and health diets.
'Animal Health is in a phase of transition with a targeted increase in investment in new products that will deliver future organic growth set against a backdrop of reduced demand for existing mature products,' Benchmark said in a preliminary trading statement. ' Advanced Nutrition experienced lower growth rates in the first half year but key markets continued to recover through the second half. ' Net debt increased to £23.9m, which included a £6.0m of ringfenced non-recourse debt used to part fund genetics capital expenditure. The biotechnology firm's total investment in R&D increased by £2.1m to £15.2m for the year.
Benchmark said R&D investment for reported period 'represents a lower level of increase than in past years as R&D was carefully managed to ensure it is aligned with revenue growth and an increase in capitalised R&D as investment is more focused on products in the final stages of development.'
At 9:55am: (LON:BMK) Benchmark Holdings Plc share price was -4.5p at 69p