Covid-19 update

RNS Number : 4990I

Benchmark Holdings PLC

02 April 2020

 

2 April 2020

Benchmark Holdings plc

("Benchmark" or the "Company")

Covid-19 Update

Benchmark, the aquaculture genetics, health and advanced nutrition company, provides the following update in light of Covid-19. Benchmark's key priority at these unprecedented times is the health and safety of its employees, customers and partners.

Highlights

· Business continuity plan implemented with remote working facilities, and adapted shift patterns and safety procedures at manufacturing sites worldwide

· Strong liquidity position with c.£63.6 million cash and undrawn facilities as at 30th March 2020, well within covenant levels. Taking action to conserve cash through the crisis

· Too early to assess the level of impact in the current financial year ending 30th September 2020 but we anticipate a negative impact on earnings:

o  Trading in Genetics has not been materially affected

o  Expect significant impact in Advanced Nutrition as a result of reduced consumption leading to lower levels of production and disruption to logistics

· Disposal of non-core activities and restructuring ongoing with some delays

· Commercialisation plan for BMK08 progressing with timing reliant on any potential impact from Covid-19 on regulatory approval process

Current trading and outlook

Benchmark operates in the essential sustainable global food production sector which, while experiencing short term challenges from Covid-19, continues to have strong fundamentals.

To date, it is too early to assess the level of impact in the current financial year ending 30 September 2020 but we anticipate a negative impact on earnings.

Trading in our Genetics business has not been materially affected by Covid-19. The two and a half to three year salmon production cycle means that demand for salmon eggs is less affected by the short term impact from Covid-19 on the salmon sector, which is experiencing weaker demand from the catering industry, partially offset by retail demand, as well as challenging logistics to Asia and US. 

In Advanced Nutrition, global shrimp consumption has dropped, with a consequent reduction in production in most markets. There are cautious signs of a potential recovery in China, although the effect will be slowed by a backlog of shrimp stocks from prior months. Demand for sea bass and bream in Europe and in the US has been significantly impacted, leading to a reduction in production across all markets which could worsen if European borders close to fry or end product. There is ongoing uncertainty and we expect a significant impact from Covid-19 on the division.

In Animal Health, the Company has built stocks to support customers and trading is on track.  Our work towards the commercial launch of BMK08 and CleanTreat ® is continuing, with timings highly reliant on any impact from Covid-19 on the regulatory approval process.

Liquidity and headroom

Having raised £42m net proceeds through a placing and open offer completed in February, the Group has a strong liquidity position with c.£63.6 million cash and undrawn facilities as at 30th March 2020, well within covenant levels.

Management priorities and actions

The Group is taking a number of actions to protect the health and wellbeing of its staff, to continue to supply and service its customers, and to protect cash and maintain headroom during this period of uncertainty.

The Group has implemented a business continuity plan to manage all parts of the business safely, whilst continuing to support customers. This includes remote working across our global operations for our office based employees. We have adapted shift patterns at manufacturing sites worldwide to reduce employee exposure and enhanced safety procedures such as deep cleaning.

We continue to serve our customers with limited interruption to date. We have built an inventory of product and key ingredients in response to the increased risk posed by the closure of borders and freight and logistical challenges. We are also conducting regular customer support webinars.

From a financial perspective, we are taking actions to conserve cash to maintain a resilient financial position through the crisis. These include cost reductions, cuts or delays to R&D and capex, and working capital management. We are continuing to focus on the disposal of non-core activities and restructuring, which is progressing albeit with some delays. The business will take advantage of governmental support packages where appropriate and offered in the countries in which we operate.

Peter George, Executive Chairman, commented:

" During these difficult times, the Group's key priority is to protect our employees and customers' interests whilst at the same time ensuring our financial position remains resilient. We operate in the essential sustainable global food production sector which, while experiencing short term challenges from Covid-19, continues to have strong fundamentals. We remain confident in our strategy for the business for the long term including the prospects for the commercial launch of BMK08 and CleanTreat . "

Enquiries

For further information, please contact:
Benchmark Holdings plc	Tel:  [phone]
Peter George, Executive Chairman
Septima Maguire, CFO
Ivonne Cantu, Investor Relations
Numis (Broker and NOMAD)	Tel:  [phone]
James Black, Freddie Barnfield, Duncan Monteith
MHP Communications	Tel:  [phone]

 Katie Hunt, Reg Hoare, Alistair de Kare-Silver    [e-mail]

 

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