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Benchmark Hlgs PLC (BMK)

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Monday 22 February, 2021

Benchmark Hlgs PLC

Q1 Results

RNS Number : 8057P
Benchmark Holdings PLC
22 February 2021
 

22 February 2021

 

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")

 

Q1 Results

(3 months ended 31 December 2020)

 

Positive start to the year with good trading and strategic progress across all business areas

 

Benefits from restructuring and focus on aquaculture

 

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 31 December 2020 (the "period") . All Q1 2021 and Q1 2020 figures quoted in this announcement are based on unaudited accounts.

 

£m

Q1 2021

(unaudited)

Q1 2020

Restated*

(unaudited)

FY2020

(audited)

Adjusted

 

 

 

Revenue from continuing operations

29.0

24.7

105.6

Adjusted EBITDA2 from continuing operations

3.0

0.4

14.5

Adjusted Operating Profit/(Loss)3 from continuing operations

1.3

(1.1)

7.9

Exceptional restructuring, disposal and acquisition related items

(0.6)

(0.1)

(2.1)

EBITDA1 from continuing operations

2.4

0.3

12.4

Statutory

 

 

 

Loss before tax from continuing operations

(0.5)

(3.2)

(22.6)

Loss for the period from continuing operations

(0.2)

(2.6)

(22.8)

Loss for the period - total incl. discontinued operations

(0.2)

(5.4)

(31.9)

Basic loss per share (p) - continuing operations

(0.11)

(0.51)

(3.80)

Net debt4

(51.9)

(91.3)

(37.6)

 

 

 

 

(1) EBITDA is earnings/(loss) before interest, tax, depreciation and amortisation and impairment.

(2) Adjusted EBITDA is EBITDA1, before exceptional items including disposal and acquisition related expenditure.

(3) Adjusted Operating Profit/(Loss) is operating loss before exceptional items including disposal and 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.

* Q1 2020 results have been restated to reflect changes to the ongoing continuing business since they were previously reported.

Divisional summary (Continuing operations)

£m

Q1 2021

(unaudited)

Q1 2020

Restated*

(unaudited)

FY 2020

(audited)

Revenue

 

 

 

Advanced Nutrition

15.1

11.4

59.4

Genetics

12.6

12.1

41.5

Health

1.3

1.4

5.2

Adjusted EBITDA2

 

 

 

Advanced Nutrition

1.0

(0.3)

6.4

Genetics

3.9

3.5

14.4

Health

(1.1)

(1.8)

(3.7)

(1) EBITDA is earnings/(loss) before interest, tax, depreciation and amortisation and impairment.

(2) Adjusted EBITDA is EBITDA1, before exceptional, disposal and acquisition related expenditure.

* Q1 2020 results have been restated to reflect changes to the ongoing continuing business since they were previously reported.

 

Financial Highlights - Significant increase in revenues and Adjusted EBITDA

· Revenues from continuing operations were 18% ahead of the prior year resulting from:

32% higher revenues in Advanced Nutrition following slight improvement in certain markets where Covid-19 restrictions have eased and timing of restocking at distributors year on year

Continued good performance in Genetics with revenues 4% ahead of prior year

Health revenues in line with the prior year with solid sales of Salmosan

· Adjusted EBITDA from continuing operations was £3.0m against £0.4m in Q1 2020 reflecting higher revenues, the benefit from cost reduction measures taken in 2020 and ongoing control of operating costs and R&D expenses

· Net cash outflow in the quarter was £14.6m (Q1 2020: inflow £2.2m) as a result of planned capex in the period and expected higher investment in working capital from increased activity; prior year benefitted from a £6.7m inflow from the dissolution of the Chilean JV

· Net debt was £51.9m at 30 December 2020 (30 September 2020: £37.6m; 31 December 2019: £91.3m) as a result of planned investments in capex and working capital

· Liquidity (cash and available facility) of c.£67.4m (cash and available facility (30 September 2020: £83.2m))

Market environment

· The salmon industry continues to be resilient through the ongoing pandemic with continued investment in the emerging land-based salmon farming segment

· The shrimp market remains challenging due to ongoing Covid-19 lockdown restrictions; there are partial signs of recovery in certain Asian markets as restrictions are eased while conditions in the Americas continue to be difficult

· The Mediterranean sea bass / bream market is stable

· The 2020/21 Artemia harvest is underway with normalised volumes although oversupply from previous harvests remains

Operational highlights

· BMK08/CleanTreat® on track for commercial launch in Q2 of calendar year 2021 with progress towards regulatory approval and firm customer interest

· First local production of salmon eggs from new genetics facility in Chile

· New client wins in land-based salmon farming segment consolidating our leading position in this emerging sector

Current trading and outlook

· Trading in line with market expectations

· Resilient trading in Advanced Nutrition in continued challenging market conditions

· Good visibility of revenues in Genetics for the year underpinned by long production cycle in salmon and a resilient salmon industry

Trond Williksen, CEO, commented:

 

"We have had a positive start to 2021 with good trading, improved Q1 profitability and delivery against our strategic priorities in each of our three business areas. The benefits of operating as a streamlined, increasingly integrated aquaculture business are starting to be realised. Our focus remains on becoming sustainably profitable, maintaining financial strength through the ongoing pandemic and continuing to invest selectively in our business to deliver future growth."

 

Details of analyst / investor call today

 

There will be a call at 10:00am UK time today for analysts and investors. Please note this change of time from the Notice of Results announcement on 9 February 2021. To register for the call please contact MHP Communications on +44 (0)20 3128 8990 or 8742, or by email on  [email protected]

 

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    [email protected]

                                     

 

 

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

 

The Company had a positive start to the year despite the ongoing challenges from Covid-19, with trading in Q1 delivering a significant 18% increase in revenues and an uplift in Adjusted EBITDA from £0.4m in Q1 2020 to £3.0m in Q1 2021. This reflects both the good trading performance and the benefits of our ongoing cost control.

 

Operating costs of £9.3m in Q1 were 5% below the prior period (Q1 2020: £9.8m) as a result of a groupwide effort to reduce operating costs and a reduction in marketing and travel expenses in the period as a result of Covid-19 restrictions. 

 

R&D expenses of £1.7m were 43% down (Q1 2020: £3.0m) and total R&D investment including capitalised development costs (excluding discontinued operations) was £2.8m (Q1 2020: £3.9m). By business area, total R&D saw a 28% reduction in Advanced Nutrition and a 61% reduction in Health while Genetics was 5% below the prior year. Genetics R&D spend includes the cost of maintaining our breeding programmes which are fixed.

 

Overall, our main end markets saw a continuation of the trends reported in our year end results with a resilient salmon industry, stable sea bass/bream market and shrimp markets continuing to be affected by the pandemic, particularly in the Americas. We expect this scenario to continue with some recovery when restrictions ease in the main shrimp consuming and producing countries which include China, the US, India, Vietnam and Ecuador. 

 

We continue to operate our business with the health, wellbeing and safety of our employees as a priority while providing continuity of supply and service to our customers. We recognise the challenges on wellbeing from the prolonged pandemic and have given additional focus to our wellbeing programme, an important element of our ESG programme. We are maintaining our focus on cost and cash management, which together with our tried and tested flexible operating processes, give us resilience through the ongoing pandemic.

 

Genetics

 

Genetics revenues in Q1 2021 were 4% (£0.5m) higher than the prior year, reflecting higher egg sales volumes in Norway from our Salten facility, partially offset by expected lower sales to Scotland from our Icelandic facility and lower harvest revenues as a result of lower salmon prices.

Adjusted EBITDA for Q1 2021 of £3.9m was 11% higher than prior year (Q1 2020: £3.5m) due to higher overall sales, lower operating costs and lower R&D expenses. Excluding fair value movements of £1.3m in the period, Adjusted EBITDA was £2.6m, 10% above the prior year (Q1 2020: £2.4m).

Investment in our SPR shrimp production and commercial capabilities continues ahead of full commercial launch. During the period we continued to supply shrimp breeders from our US facility in Fellsmere, Florida to markets in Asia as part of our test market ahead of a gradual roll-out of our SPR shrimp in H2 FY2021. The opening of the multiplication centre in Thailand has suffered delays as a result of lockdown restrictions in the region which slowed down construction. Capitalised development costs from shrimp genetics amounted to £0.6m in the period (Q1 2020: £0.3m) and Adjusted EBITDA loss was £0.1m in the shrimp segment (Q1 2020: Adjusted EBITDA profit of £0.1m).

 

We continue to invest in our tilapia breeding programme with operating costs of £0.4m, in line with Q1 2020.

Construction to increase incubation capacity in Iceland commenced in Q1 2021. This investment will enable us to meet seasonal peak demand and strengthen our ability to serve international customers, including new land-based salmon farms, delivering high biosecure eggs year round in the coming years.  Post period end, we recorded our first local production of salmon eggs from our new facility in Chile.

 

Advanced Nutrition

 

Advanced Nutrition had a good quarter, reporting revenues of £15.1m in Q1, 32% above the prior year (Q1 2020: £11.4m), following a slight recovery in selected markets where Covid-19 restrictions are easing and reflecting our enhanced commercial effort. Revenues grew against last year in all product areas:  Artemia (+69%), Diets (+14%) and Health (+10%). By region, sales in Asia were ahead of last year partially offset by a drop in the Americas which have been more significantly affected by Covid-19. Revenues from Europe were in line with 2020.

 

Adjusted EBITDA in Q1 was £1.0m (Q1 2020: loss £0.3m) as a result of increased sales volumes and lower operating costs from reduced travel and marketing as a result of Covid-19 restrictions.

 

While we expect ongoing volatility in the shrimp markets, we are encouraged by a partial recovery in certain markets which is expected to continue as consumption levels improve with a lifting of lockdowns.

 

Operational efficiencies which commenced during FY20 have been completed, including formulation improvements to key product lines and the installation of a new Artemia mixer at our US production site to improve customer lead times.

 

Health

 

Revenues from continuing operations in Q1 2021 were marginally below the previous year at £1.3m (Q1 2020: £1.4m). Sales of Salmosan were solid, reflecting our ability to maintain strong technical support through the pandemic. The restructuring of our Health business area has resulted in a more agile, commercially focused team.

 

Adjusted EBITDA from continuing operations in Q1 2021 was a loss of £1.1m (Q1 2020: loss £1.8m). The reduced operating loss reflects cuts in operating costs following the restructuring and disposals, and lower R&D investment.

 

During the period we continued to prepare for the commercial launch of BMK08 and CleanTreat®in Q2 calendar year 2021, progressing through the regulatory approval process, building operational strength and capacity, and continuing to implement our commercial plan with firm interest from potential customers. Construction of a second CleanTreat®system is expected to complete in line with our planned launch positioning us for maximum utilisation of capacity in the months following the launch. The next milestones towards commercialisation are the ratification of the Maximum Residue Level for food safety (MRL) in EU and Norwegian law and the Marketing Authorisation grant in Norway. All are progressing in line with expectations and we are planning to generate revenues in H2 FY 2021.

 

Finance costs, cashflow and net debt

 

Net finance income for the quarter was £2.7m (Q1 2020: £2.4m) primarily driven by interest expense of £1.8m (Q1 2020: £1.7m) more than offset by foreign exchange gains of £2.6m (Q1 2020: £3.2m) and revaluation of financial derivatives of £2.3m (Q1 2020: £0.9m).

 

There was a net cash outflow in the quarter of £14.6m (Q1 2020: inflow £2.2m) with the main impact on cashflow derived from investing activities. Net cashflow from investing activities in the period was an outflow of £4.2m (Q1 2020: inflow £4.5m), primarily from investment in PPE related to the new facility in Chile and fire safety equipment in Thailand, whereas there was a £6.7m inflow in the prior year from the dissolution of the Chilean JV. Net cash outflow from operating activities was £6.4m (Q1 2020: £3.6m outflow) with higher investment in working capital in the period from higher activity offsetting the improved result for the year.

 

Net debt at the quarter end was £51.9m (December 2020: £37.6m). Liquidity at the end of the period was £67.4m providing £57.4m of headroom against our minimum liquidity covenant.

 

Summary and Outlook

 

The Company has made a positive start to the year and is trading in line with market expectations. We have good visibility of revenues in Genetics for the full financial year with normal seasonality, underpinned by a long production cycle in salmon and a resilient salmon industry, together with the ramp up and expansion of capacity. We expect the shrimp market to remain volatile through the coming months with some recovery in the Asian markets likely but challenging conditions continuing in the Americas.  In Health, we also expect to see the first revenues from BMK08/CleanTreat® during H2 FY 2021 subject to regulatory approvals.

 

The benefits of operating as a streamlined, aquaculture focused, increasingly integrated organisation are starting to be realised. Our focus remains on becoming sustainably profitable, maintaining financial strength through the ongoing pandemic and continuing to invest selectively in our business to deliver future growth.

Benchmark Holdings plc

 

Consolidated Income Statement for the period ended 31 December 2020

 

All figures in £000's

Notes

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
(audited)

Revenue

4

29,030

24,691

105,565

Cost of sales

 

(14,359)

(11,752)

(50,603)

Gross profit

 

14,671

12,939

54,962

Research and development costs

 

(1,745)

(2,972)

(7,282)

Other operating costs

 

(9,285)

(9,778)

(33,337)

Share of (loss)/profit of equity-accounted investees, net of tax

 

(611)

211

150

Adjusted EBITDA²

 

3,030

400

14,493

Exceptional - restructuring, disposal and acquisition related items

6

(593)

(134)

(2,114)

EBITDA¹

 

2,437

266

12,379

Depreciation and impairment

 

(1,771)

(1,453)

(6,640)

Amortisation and impairment

 

(3,918)

(4,355)

(16,613)

Operating loss

 

(3,252)

(5,542)

(10,874)

Finance cost

 

(2,149)

(2,010)

(12,779)

Finance income

 

4,886

4,368

1,082

Loss before taxation

 

(515)

(3,184)

(22,571)

Tax on loss

7

290

600

(204)

Loss from continuing operations

 

(225)

(2,584)

(22,775)

Discontinued operations

 

 

 

 

Loss from discontinued operations, net of tax

5

-

(2,858)

(9,174)

 

 

(225)

(5,442)

(31,949)

Loss for the year attributable to:

 

 

 

 

- Owners of the parent

 

(717)

(5,716)

(32,923)

- Non-controlling interest

 

492

274

974

 

 

(225)

(5,442)

(31,949)

 

 

 

 

 

Earnings per share

 

 

 

 

Basic loss per share (pence)

8

(0.11)

(1.02)

(5.26)

Diluted loss per share (pence)

8

(0.11)

(1.02)

(5.26)

Earnings per share - continuing operations

 

 

 

 

Basic loss per share (pence)

8

(0.11)

(0.51)

(3.80)

Diluted loss per share (pence)

8

(0.11)

(0.51)

(3.80)

 

 

 

 

 

 

 

£000

£000

£000

Adjusted EBITDA from continuing operations

 

3,030

400

14,493

Adjusted EBITDA from discontinued operations

5

-

(1,987)

(8,726)

Total Adjusted EBITDA

 

3,030

(1,587)

5,767

 

1 EBITDA - Earnings/loss before interest, tax, depreciation, amortisation and impairment

2 Adjusted EBITDA - EBITDA before exceptional, disposal and acquisition related items

* Q1 2020 numbers have been restated to reflect changes to the ongoing continuing business since it was previously reported (note 5)

 

Benchmark Holdings plc

 

Consolidated Statement of Comprehensive Income for the period ended 31 December 2020

 

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
(audited)

 

 

 

 

 

Loss for the period

 

(225)

(5,442)

(31,949)

Other comprehensive income

 

 

 

 

Items that are or may be reclassified subsequently to profit or loss

 

 

 

 

Foreign exchange translation differences

 

(8,714)

(23,560)

(20,327)

Cash flow hedges - changes in fair value

 

2,898

(1,660)

(5,932)

Cash flow hedges - reclassified to profit or loss

 

156

(75)

(153)

Total comprehensive income for the period

 

(5,885)

(30,737)

(58,361)

 

 

 

 

 

Total comprehensive income for the period attributable to:

 

 

 

 

- Owners of the parent

 

(6,624)

(30,810)

(58,532)

- Non-controlling interest

 

739

73

171

 

 

(58,361)

 

 

 

 

 

Total comprehensive income for the period attributable to owners of the parent:

 

 

 

 

- Continuing operations

 

(6,624)

(28,058)

(50,604)

- Discontinued operations

 

-

(2,752)

(7,928)

 

 

(6,624)

(30,810)

(58,532)

 

* Q1 2020 numbers have been restated to reflect changes to the ongoing continuing business since it was previously reported note 5)

 

Benchmark Holdings plc

 

Consolidated Balance Sheet for the period ended 31 December 2020

 

 

 


31 December 2020


31 December 2019


30 September 2020

All figures in £000's

Notes

(unaudited)

(unaudited)

(audited)

Assets

 

 

 

 

Property, plant and equipment

 

68,820

85,204

65,601

Right-of-use assets

 

11,371

4,421

10,347

Intangible assets

 

235,644

255,006

247,003

Equity-accounted investees

 

3,069

3,488

3,690

Other investments

 

24

24

23

Biological and agricultural assets

 

15,929

10,090

16,621

Non-current assets

 

334,857

358,233

343,285

Inventories

 

17,197

23,544

18,926

Biological and agricultural assets

 

19,118

17,483

15,848

Trade and other receivables

 

35,248

34,211

39,371

Cash and cash equivalents

 

56,428

17,020

71,605

 

 

127,991

92,258

145,750

Assets held for sale

 

-

17,088

-

Current assets

 

127,991

109,346

145,750

Total assets

 

462,848

467,579

489,035

Liabilities

 

 

 

 

Trade and other payables

 

(28,318)

(27,054)

(45,692)

Loans and borrowings

9

(4,209)

(2,951)

(5,339)

Corporation tax liability

 

(3,919)

(2,606)

(4,344)

Provisions

 

-

(144)

-

 

 

(36,446)

(32,755)

(55,375)

Liabilities directly associated with the assets held for sale

 

-

(12,757)

-

Current liabilities

 

(36,446)

(45,512)

(55,375)

Loans and borrowings

9

(104,077)

(105,366)

(103,819)

Other payables

 

(1,822)

(1,952)

(1,754)

Deferred tax

 

(30,450)

(34,742)

(32,647)

Non-current liabilities

 

(136,349)

(142,060)

(138,220)

Total liabilities

 

(172,794)

(187,572)

(193,595)

Net assets

 

290,053

280,007

295,440

Issued capital and reserves attributable to owners of the parent

 

 

 

 

Share capital

10

668

559

668

Additional paid-in share capital

 

399,803

358,044

399,601

Capital redemption reserve

 

5

5

5

Retained earnings

 

(142,591)

(116,354)

(142,170)

Hedging reserve

 

(6,596)

(5,301)

(9,651)

Foreign exchange reserve

 

31,716

36,843

40,678

Equity attributable to owners of the parent

 

283,005

273,796

289,131

Non-controlling interest

 

7,048

6,211

6,309

Total equity and reserves

 

290,053

280,007

295,440

 

The notes to these statements are an integral part of this consolidated financial information

Benchmark Holdings plc

 

Consolidated Statement of Changes in Equity for the period ended 31 December 2020

 

 

 Share
capital

 Additional paid-in share capital* 

 Other
reserves

 Hedging 
reserve

 Retained
 earnings

 Total attributable
 to equity holders of
parent

 Non-
controlling
interest

 Total
equity

 

 000

 000

 000

 000

 000

 000

 000

 000

 

 

 

 

 

 

 

 

 

As at 1 October 2020 (audited)

668

399,601

40,683

(9,651)

(142,170)

289,131

6,309

295,440

Comprehensive income for the period

 

 

 

 

 

 

 

 

(Loss)/profit for the period

-

-

-

-

(717)

(717)

492

(225)

Other comprehensive income

-

-

(8,962)

3,055

-

(5,907)

247

(5,660)

Total comprehensive income for the period

-

-

(8,962)

3,055

(717)

(6,624)

739

(5,885)

 

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Share issue

-

202

-

-

-

202

-

202

Share-based payment

-

-

-

-

296

296

-

296

Total contributions by and distributions to owners

-

202

-

-

296

498

-

498

 

 

 

 

 

 

 

 

 

Total transactions with owners of the Company

-

202

-

-

296

498

-

498

As at 31 December 2020 (unaudited)

668

399,803

31,721

(6,596)

(142,591)

283,005

7,048

290,053

 

 

 

 

 

 

 

 

 

As at 1 October 2019 (audited)

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

-

-

-

-

(5,716)

(5,716)

274

(5,442)

Other comprehensive income

-

-

(23,359)

(1,735)

-

(25,094)

(201)

(25,295)

Total comprehensive income for the period

-

-

(23,359)

(1,735)

(5,716)

(30,810)

73

(30,737)

 

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Share-based payment

-

-

-

-

278

278

-

278

Total contributions by and distributions to owners

-

-

-

-

278

278

-

278

 

 

 

 

 

 

 

 

 

Total transactions with owners of the Company

-

-

-

-

278

278

-

278

As at 31 December 2019 (unaudited)

559

358,044

36,848

(5,301)

(116,354)

273,796

6,211

280,007

 

 

 

 

 

 

 

 

 

As at 1 October 2019 (audited)

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

-

-

-

-

(32,923)

(32,923)

974

(31,949)

Other comprehensive income

-

-

(19,524)

(6,085)

-

(25,609)

(803)

(26,412)

Total comprehensive income for the period

-

-

(19,524)

(6,085)

(32,923)

(58,532)

171

(58,361)

 

 

 

 

 

 

 

 

 

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

-

-

-

-

1,669

1,669

-

1,669

Total contributions by and distributions to owners

109

41,557

-

-

1,669

43,335

-

43,335

 

 

 

 

 

 

 

 

 

Total transactions with owners of the Company

109

41,557

-

-

1,669

43,335

-

43,335

As at 30 September 2020 (audited)

668

399,601

40,683

(9,651)

(142,170)

289,131

6,309

295,440

 

*Other reserves in this statement is an aggregation of capital redemption reserve and foreign exchange reserve

Benchmark Holdings plc

 

Consolidated Statement of Cash Flows for the period ended 31 December 2020

 

 

 

Q1 2021
(unaudited)

Q1 2020
(unaudited)

FY 2020
(audited)

 

 

£000

£000

£000

Cash flows from operating activities

 

 

 

 

Loss for the year

 

(225)

(5,442)

(31,949)

Adjustments for:

 

 

 

 

Depreciation and impairment of property, plant and equipment

 

1,772

1,910

9,138

Amortisation and impairment of intangible fixed assets

 

3,918

4,389

19,402

Gain on sale of property, plant and equipment

 

(68)

(3)

(1,140)

Gain on sale of subsidiaries

 

-

-

(14,120)

Finance income

 

(22)

(963)

(111)

Finance costs

 

(165)

2,049

9,695

Other adjustments for non-cash items

 

-

-

200

Share of loss/(profit) of equity-accounted investees, net of tax

 

611

(211)

(150)

Foreign exchange gains

 

(3,480)

(4,351)

(132)

Share based payment expense

 

296

278

1,669

Tax credit

 

(291)

(571)

314

 

 

2,346

(2,915)

(7,184)

Decrease in trade and other receivables

 

4,563

10,606

4,202

Decrease/(increase) in inventories

 

1,799

(1,810)

3,741

Increase in biological and agricultural assets

 

(2,038)

(373)

(7,474)

(Decrease)/increase in trade and other payables

 

(11,846)

(8,301)

5,006

Decrease in provisions

 

(10)

(18)

(260)

 

 

(5,186)

(2,811)

(1,969)

Income taxes paid

 

(1,241)

(827)

(2,087)

Net cash flows used in operating activities

 

(6,427)

(3,638)

(4,056)

Investing activities

 

 

 

 

Proceeds from sale of subsidiaries, net of cash disposed of

 

-

-

17,487

Purchase of investments

 

-

-

(522)

Receipts from disposal of investments

 

-

6,932

6,932

Purchases of property, plant and equipment

 

(3,424)

(1,576)

(5,851)

Proceeds from sales of intangible assets

 

-

-

261

Purchase of intangibles

 

(1,128)

(952)

(5,563)

Purchase of held for sale assets

 

-

-

(402)

Proceeds from sale of fixed assets

 

286

-

16,147

Proceeds from sales of other long-term assets

 

-

-

1,776

Interest received

 

21

69

111

Net cash flows (used in)/from investing activities

 

(4,245)

4,473

30,376

Financing activities

 

 

 

 

Proceeds of share issues

 

203

-

42,978

Share-issue costs recognised through equity

 

-

-

(1,312)

Proceeds from bank or other borrowings

 

-

4,174

8,387

Repayment of bank or other borrowings

 

(1,664)

(201)

(10,141)

Interest and finance charges paid

 

(1,800)

(2,100)

(7,659)

Repayments of lease liabilities

 

(689)

(535)

(2,120)

Net cash (outflow)/inflow from financing activities

 

(3,950)

1,338

30,133

Net (decrease)/increase in cash and cash equivalents

 

(14,622)

2,173

56,453

Cash and cash equivalents at beginning of year

 

71,605

16,051

16,051

Effect of movements in exchange rate

 

(555)

(960)

(899)

Cash and cash equivalents at end of year

 

56,428

17,264

71,605

 

The Consolidated Statement of Cash Flows presents cash flows from both Continuing and Discontinued operations in the comparatives.

Of the cash balance at 31 December 2019 of £17,264,000, £244,000 was classified as held for sale

 

Benchmark Holdings plc

 

Unaudited notes to the interim financial statements for period ended 31 December 2020

 

 

1.  Basis of preparation

 

Benchmark Holdings plc (the 'Company') is a company incorporated domiciled in the United Kingdom. These consolidated quarterly financial statements as at and for the three months ended 31 December 2020 represents that of the Company and its subsidiaries (together referred to as the 'Group').

 

These quarterly financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group's consolidated financial statements as at and for the year ended 30 September 2020. 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 2020 were approved by the Directors on 27 November 2020 and will be 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.

 

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 31 December 2020 the Group had net assets of £290.1m (30 September 2020: £295.4m), including cash of £56.4m (30 September 2020: £71.6m) as set out in the consolidated balance sheet. The Group made a loss for the period of £0.2m (30 September 2020: £31.9m).

 

As noted in the Management Report, the impact of the Covid-19 pandemic continues to affect 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 experienced mixed fortunes, with weak shrimp markets, resilient salmon markets and sea bass/bream markets which have experienced modest impact from Covid-19. The Directors monitor available market analysis as this situation continues into 2021. Whilst the outlook for the shrimp market retains some uncertainty, the outlook for the salmon sector (underpinning the Genetics and Health businesses) remains positive and the Directors therefore believe that large parts of the Group are well placed to deal with the uncertain global economic future ahead.

 

The Directors prepared cash flow projections covering the period to September 2022 to assess the Group's trading and cash flow forecasts and the forecast compliance with the covenants included within the Group's financing arrangements and year to date performance is in line with these forecasts.  Cash resources were boosted by non-core business disposals during the previous year and the ongoing cost base following these transactions has been significantly reduced.

 

The uncertainty relating to the future impact on the Group of the pandemic has been considered as part of the Directors' assessment of the going concern assumption. The positive preventative measures implemented by the Directors at an early stage in response to the pandemic continue to be in force where necessary. In the downside scenario analysis performed, the Directors considered severe but plausible impacts of Covid-19 on the Group's trading and cash flow forecasts, modelling reductions in the revenues and cash flows in Advanced Nutrition, being the segment most impacted by Covid-19 because of its exposure to global shrimp markets, alongside modelling delays to new product launches in the Health business area. Key downside sensitivities modelled include assumptions that there is limited recovery in global shrimp markets in FY21, affecting demand for Advanced Nutrition products and a three-month potential delay in the launch of BMK08, pushing commercial launch back to September 2021. Mitigating measures within the control of management were implemented early in the pandemic and remain in place and have been factored into the downside analysis performed. These measures include 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.

 

It remains difficult to predict the overall outcome and impact of the pandemic, but under the severe but plausible downside scenarios modelled, 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 financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

 

 

2.  Accounting policies

 

The accounting policies adopted are consistent with those used in preparing the consolidated financial statements for the financial year ended 30 September 2020.

 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total earnings.

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 11).

Use of estimates and judgements

The preparation of quarterly 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 quarterly 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 2020.

 

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 based on the following business areas:

 

· Genetics - 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 Nutrition - manufactures and provides technically advanced nutrition and health products to the global aquaculture industry.

· Health - provided veterinary services, environmental services diagnostics and health products to the global aquaculture market, and manufactures licenced veterinary vaccines and vaccine components; following the divestment programme the segment now focusses on providing health products to the global aquaculture market.

 

In addition to the above, reported as "all other segments" is the Knowledge Services business area, the operations of which were disposed of or discontinued in the two previous years. The business area provided 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. Corporate represents revenues earned from recharging certain central costs to the operating divisions, together with unallocated central costs.

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.

 

 

3.  Segment information (continued)

 

 

 Segmental Revenue

 

 

 

 All figures in £000's

 Q1 2021
(unaudited)

 Q1 2020
(unaudited)

 FY 2020
(audited)

  Genetics 

12,616

12,120

41,504

  Advanced Nutrition 

15,132

11,396

59,362

  Health 

1,293

3,420

10,799

  All other segments 

-

3,373

9,257

  Corporate 

1,205

1,538

4,939

  Inter-segment sales 

(1,216)

(1,793)

(5,469)

  Total 

29,030

30,054

120,392

 

 Segmental Adjusted EBITDA

 

 

 

 All figures in £000's

 Q1 2021
(unaudited)

 Q1 2020
(unaudited)

 FY 2020
(audited)

  Genetics 

3,879

3,455

14,442

  Advanced Nutrition 

993

(405)

6,266

  Health 

(1,117)

(4,021)

(12,886)

  All other segments 

-

196

244

  Corporate 

(725)

(812)

(2,299)

  Total 

3,030

(1,587)

5,767

 

Reconciliations of segmental information to IFRS measures

 

Revenue

 

 

 

 All figures in £000's

 Q1 2021
(unaudited)

 Q1 2020 Restated*
(unaudited)

 FY 2020
(audited)

 

 

 

 

Total revenue per segmental information

29,030

30,054

120,392

Less: revenue from discontinued operations (note 5)

-

(5,363)

(14,827)

Consolidated revenue

29,030

24,691

105,565

 

 Reconciliation of Reportable Segments Adjusted EBITDA to Loss before taxation from continuing operations

 All figures in £000's

 Q1 2021
(unaudited)

 Q1 2020 Restated*
(unaudited)

 FY 2020
(audited)

 Total reportable segment Adjusted EBITDA 

3,755

(971)

7,822

 Other Segment and Corporate Adjusted EBITDA

(725)

(616)

(2,055)

 

3,030

(1,587)

5,767

 Less: Adjusted EBITDA from discontinued operations (note 5)

-

1,987

8,726

 Adjusted EBITDA from continuing operations

3,030

400

14,493

 Exceptional including disposal and acquisition related items

(593)

(134)

(2,114)

 Depreciation and impairment

(1,771)

(1,453)

(6,640)

 Amortisation and impairment

(3,918)

(4,355)

(16,613)

 Net finance costs

2,737

2,358

(11,697)

 Loss before taxation from continuing operations

(515)

(3,184)

(22,571)

 

*See note 5.
 

4.  Revenue

 

The Group's operations and main revenue streams are those described in its financial statements to 30 September 2020. 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 31 December 2020 (unaudited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued

 Continued

 Sale of goods

 

11,489

15,127

1,278

-

-

-

27,894

-

27,894

 Provision of services

 

1,121

-

15

-

-

-

1,136

-

1,136

 Inter-segment sales

 

6

5

-

-

1,205

(1,216)

-

-

-

 

 

12,616

15,132

1,293

-

1,205

(1,216)

29,030

-

29,030

 

 

 

 

 

 

 

 

 

 

 

 

 

3 months ended 31 December 2019 (unaudited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued Restated*

 Continued Restated*

 Sale of goods

 

10,939

11,388

1,612

197

-

-

24,136

620

23,516

 Provision of services

 

1,125

-

1,610

3,166

17

-

5,918

4,743

1,175

 Inter-segment sales

 

56

8

198

10

1,521

(1,793)

-

-

-

 

 

12,120

11,396

3,420

3,373

1,538

(1,793)

30,054

5,363

24,691

 

 

 

 

 

 

 

 

 

 

 

 

 

12 months ended 30 September 2020 (audited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued

 Continued

 Sale of goods

 

37,555

59,301

6,529

547

-

-

103,932

2,551

101,381

 Provision of services

 

3,909

-

3,846

8,683

22

-

16,460

12,276

4,184

 Inter-segment sales

 

40

61

424

27

4,917

(5,469)

-

-

-

 

 

41,504

59,362

10,799

9,257

4,939

(5,469)

120,392

14,827

105,565

 

*See note 5.
 

4.  Revenue (continued)

 

Primary geographical markets

 

 

 

 

3 months ended 31 December 2020 (unaudited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued

 Continued

 Norway

 

7,710

66

163

-

-

-

7,939

-

7,939

 UK

 

1,430

26

235

-

-

-

1,691

-

1,691

 Faroe Islands

 

1,808

4

-

-

-

-

1,812

-

1,812

 Ecuador

 

-

959

-

-

-

-

959

-

959

 India

 

-

3,226

-

-

-

-

3,226

-

3,226

 Greece

 

-

1,830

-

-

-

-

1,830

-

1,830

 Singapore

 

-

941

-

-

-

-

941

-

941

 Chile

 

6

-

837

-

-

-

843

-

843

 Rest of Europe

 

1,160

1,438

2

-

-

-

2,600

-

2,600

 Rest of World

 

496

6,637

56

-

-

-

7,189

-

7,189

 Inter-segment sales

 

6

5

-

-

1,205

(1,216)

-

-

-

 

 

12,616

15,132

1,293

-

1,205

(1,216)

29,030

-

29,030

 

 

 

 

 

 

 

 

 

 

 

 

 

3 months ended 31 December 2019 (unaudited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued Restated*

 Continued Restated*

 Norway

 

5,814

112

543

-

-

-

6,469

424

6,045

 UK

 

2,343

19

693

2,106

17

-

5,178

2,694

2,484

 Faroe Islands

 

2,160

-

25

-

-

-

2,185

-

2,185

 Ecuador

 

-

1,985

-

-

-

-

1,985

-

1,985

 India

 

-

956

-

-

-

-

956

-

956

 Greece

 

-

1,495

-

-

-

-

1,495

-

1,495

 Singapore

 

-

679

-

-

-

-

679

-

679

 Chile

 

14

-

1,189

-

-

-

1,203

264

939

 Rest of Europe

 

1,209

1,487

538

999

-

-

4,233

1,538

2,695

 Rest of World

 

524

4,655

234

258

-

-

5,671

443

5,228

 Inter-segment sales

 

56

8

198

10

1,521

(1,793)

-

-

-

 

 

12,120

11,396

3,420

3,373

1,538

(1,793)

30,054

5,363

24,691

 

 

 

 

 

 

 

 

 

 

 

 

 

12 months ended 30 September 2020 (audited)

All figures in £000's

 

 Genetics

 Advanced  Nutrition

  Health

 All other segments

 Corporate

 Inter-segment sales

 Total

 Discontinued

 Continued

 Norway

 

19,709

633

1,608

-

-

-

21,950

1,145

20,805

 UK

 

6,402

124

1,951

6,149

22

-

14,648

7,506

7,142

 Faroe Islands

 

6,961

3

114

-

-

-

7,078

-

7,078

 Ecuador

 

-

6,822

-

-

-

-

6,822

-

6,822

 India

 

-

6,452

6

-

-

-

6,458

3

6,455

 Greece

 

61

5,666

-

-

-

-

5,727

-

5,727

 Singapore

 

-

5,356

7

-

-

-

5,363

7

5,356

 Chile

 

119

21

4,083

-

-

-

4,223

1,159

3,064

 Rest of Europe

 

5,421

4,554

1,566

2,549

-

-

14,090

4,071

10,019

 Rest of World

 

2,791

29,670

1,040

532

-

-

34,033

936

33,097

 Inter-segment sales

 

40

61

424

27

4,917

(5,469)

-

-

-

 

 

41,504

59,362

10,799

9,257

4,939

(5,469)

120,392

14,827

105,565

 

*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 included the businesses within Knowledge Services (reported within 'all other segments') and the veterinary services business within Health. These operations were presented as discontinued and the sales of the disposal group were completed during the previous year and therefore continue to be shown as discontinued. During Q1 of the prior year, as a continuation of the above programme, a small non-core business within Advanced Nutrition was put up for sale and sold and a business within the Corporate category was closed.

 

During the prior year but after 31 December 2019, a restructuring of the Health business area saw the closure of the research and development operations at two sites, the sale of the Group's vaccine manufacturing facility and exit from non-core vaccine development collaborations. Consequently, these operations have been classified as discontinued with a corresponding restatement of the consolidated income statement and consolidated statement of comprehensive income for the quarter ended 31 December 2019 to reflect these changes.

 

Results from discontinued operations

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020 Restated
(unaudited)

FY 2020
(audited)

Revenue

 

-

5,363

14,827

Cost of sales

 

-

(3,947)

(13,000)

Gross profit

 

-

1,416

1,827

Research and development costs

 

-

(1,048)

(2,725)

Other operating costs

 

-

(2,355)

(7,828)

Adjusted EBITDA

 

-

(1,987)

(8,726)

Exceptional items

 

-

(312)

5,086

EBITDA

 

-

(2,299)

(3,640)

Depreciation and impairment

 

-

(457)

(2,498)

Amortisation and impairment

 

-

(34)

(2,789)

Operating loss

 

-

(2,790)

(8,927)

Finance costs

 

-

(39)

(137)

Loss before taxation

 

-

(2,829)

(9,064)

Tax on loss

 

-

(29)

(110)

Loss from discontinued operations

 

-

(2,858)

(9,174)

 

 

 

5.  Discontinued activities (continued)

 

Results from discontinued operations by segment

 

 

 

 

Advanced Nutrition

 Health

All other segments

Corporate

Total Discontinued

All figures in £000's

Q1 2021
(unaudited)

Q1 2021
(unaudited)

Q1 2021
(unaudited)

Q1 2021
(unaudited)

Q1 2021
(unaudited)

Revenue

 

-

-

-

-

-

Adjusted EBITDA

 

-

-

-

-

-

Operating loss

 

-

-

-

-

-

 

 

 

 

 

 

 

 

 

Advanced Nutrition

 Health

All other segments

Corporate

Total Discontinued

All figures in £000's

 

Q1 2020
(unaudited)

Q1 2020 Restated
(unaudited)

Q1 2020
(unaudited)

Q1 2020
(unaudited)

Q1 2020 Restated
(unaudited)

Revenue

 

2

1,980

3,363

18

5,363

Adjusted EBITDA

 

(118)

(2,174)

389

(84)

(1,987)

Operating loss

 

(381)

(2,597)

289

(101)

(2,790)

 

 

 

 

 

 

 

 

 

Advanced Nutrition

 Health

All other segments

Corporate

Total Discontinued

All figures in £000's

FY 2020
(audited)

FY 2020
(audited)

FY 2020
(audited)

FY 2020
(audited)

FY 2020
(audited)

Revenue

 

2

5,573

9,230

22

14,827

Adjusted EBITDA

 

(143)

(9,151)

749

(181)

(8,726)

Operating loss

 

(394)

(11,914)

3,818

(437)

(8,927)

 

 

 

6.  Exceptional - restructuring, disposal and 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.

 

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020
(unaudited)

FY 2020
(audited)

 

 

 

 

 

 Acquisition related items

 

-

-

586

 Exceptional disposal and restructuring costs

 

593

134

1,528

 

 

 

 

 

Total exceptional items

 

593

134

2,114

 

Exceptional restructuring expenses in Q1 2021 include £244,000 of staff costs relating to the Board's decision to make significant changes to the Group's management team and bring in new management, and £349,000 of costs including staff costs of £118,000 relating to disposals completed in the prior year. 

 

7.  Taxation

 

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020
(unaudited)

FY 2020
(audited)

Current tax expense

 

 

 

 

Analysis of charge in period

 

 

 

 

Current tax:

 

 

 

 

Current income tax expense on profits for the period

 

755

864

3,141

Adjustment in respect of prior periods

 

-

-

836

Total current tax charge

 

755

864

3,977

 

 

 

 

 

Deferred tax expense

 

 

 

 

Origination and reversal of temporary differences

 

(1,045)

(1,464)

(3,490)

Deferred tax movements in respect of prior periods

 

-

-

(283)

Total deferred tax credit

 

(1,045)

(1,464)

(3,773)

 

 

 

 

 

Total tax (credit)/charge on continuing operations

 

(290)

(600)

204

 

 

 

8.  Loss per share

 

Basic loss per share is calculated by dividing the loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

 

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
(audited)

 

 

 

 

Loss attributable to equity holders of the parent (£000)

 

 

 

Continuing operations

(717)

(2,858)

(23,749)

Discontinued operations

-

(2,858)

(9,174)

Total

(717)

(5,716)

(32,923)

 

 

 

 

Weighted average number of shares in issue (thousands)

667,926

558,891

625,466

 

 

 

 

Basic loss per share (pence)

 

 

 

Continuing operations

(0.11)

(0.51)

(3.80)

Discontinued operations

-

(0.51)

(1.47)

Total

(0.11)

(1.02)

(5.26)

 

 

 

 

* 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 31 December 2020, a total of 2,944,955 potential ordinary shares have not been included within the calculation of statutory diluted loss per share for the period (30 September 2020: 1,426,663) as they are anti-dilutive. These potential ordinary shares could dilute earnings/loss per share in the future.

 

9.  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 31 December 2020 the whole facility (USD 15m) was undrawn.

 

 

10.  Share capital and share premium

 

Number

Share Capital

Additional
paid-in
share
 capital

Allotted, called up and fully paid

 

£000

£000

Ordinary shares of 0.1p each

 

 

 

Balance at 30 September 2019

667,685,612

668

399,601

Exercise of share options

705,887

-

202

Balance at 30 September 2020

668,391,499

668

399,803

 

During the period ended 31 December 2020, the Company issued a total of 705,887 shares of 0.1p each to certain employees of the Group relating to share options. Of which, 228,366 were exercised at a price of 0.1 pence and 477,521 were exercised at a price of 42.5 pence.

 

11.  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 including disposal and acquisition related expenditure and is shown on the Income Statement.

Adjusted Operating Profit/Loss is operating loss before exceptional items including disposal and 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 including disposal 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

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
Restated
(audited)

Revenue

 

29,030

24,691

105,565

Cost of sales

 

(14,359)

(11,752)

(50,603)

Gross profit

 

14,671

12,939

54,962

Research and development costs

 

(1,745)

(2,972)

(7,282)

Other operating costs

 

(9,285)

(9,778)

(33,337)

Depreciation and impairment

 

(1,771)

(1,453)

(6,640)

Amortisation of capitalised development costs

 

-

-

-

Share of profit of equity accounted investees net of tax

 

(611)

211

150

Adjusted Operating Profit/(Loss)

 

1,259

(1,053)

7,853

Exceptional - restructuring, disposal and acquisition related items

 

(593)

(134)

(2,114)

Amortisation and impairment of intangible assets excluding development costs

 

(3,918)

(4,355)

(16,613)

Operating loss

 

(3,252)

(5,542)

(10,874)

 

 

 

Reconciliation of Loss Before Taxation to Adjusted Profit/Loss Before Tax

Continuing operations

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
Restated
(audited)

 

 

 

 

 

Loss before taxation

 

(515)

(3,184)

(22,571)

Exceptional - restructuring, disposal and acquisition related items

 

593

134

2,114

Amortisation and impairment of intangible assets excluding development costs

 

3,918

4,355

16,613

Adjusted Profit/(Loss) Before Tax

 

3,996

1,305

(3,844)

* See note 5.

Other Metrics

 

All figures in £000's

 

Q1 2021
(unaudited)

Q1 2020 Restated*
(unaudited)

FY 2020
Restated
(audited)

Total R&D Investment

 

 

 

 

Research and development costs

 

 

 

 

- Continuing operations

 

1,745

2,972

7,282

- Discontinued operations

 

-

1,048

2,725

 

 

1,745

4,020

10,007

Internal capitalised development costs

 

1,060

897

4,583

Total R&D investment

 

2,805

4,917

14,590

 

Liquidity

 

Following the refinancing in June 2019 a key financial covenant is a minimum liquidity of £10m, defined as cash plus undrawn facilities.

 

 

 


31 December 2020

All figures in £000's

 

(unaudited)

Cash and cash equivalents

 

56,428

Undrawn bank facility

 

10,978

 

 

67,406

 

12.  Net debt

Net debt is cash and cash equivalents less loans and borrowings excluding balances held for sale.

 

 


31 December 2020


31 December 2019


30 September 2020

All figures in £000's

 

(unaudited)

(unaudited)

(audited)

Cash and cash equivalents

 

56,428

17,020

71,605

Loans and borrowings - current

 

(4,209)

(2,951)

(5,339)

Loans and borrowings - non-current

 

(104,077)

(105,366)

(103,819)

 

 

(51,858)

(91,297)

(37,553)

 

 

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