Benchmark Holdings
Ticker: BMK Exchange: AIM

Benchmark helps deliver improved healthcare products and welfare services to the global aquaculture and livestock industries. Rising demand from clients for its products and services to manage sustainability practice and performance underlines BMK's opportunity for significant organic and external growth.

Financing underpins near-term strategy

BMK’s recently completed £43m equity financing is a signal of confidence in its ongoing focused strategic aims, its leadership, along with ground-breaking product launches in sight. 
The funding provides a buffer for BMK to enable scale-up and pursue an independent launch strategy of its novel sea lice treatment, CleanTreat® + BMK08. It also supports Genetics operations scale-up in Chile the world’s second largest salmon producing nation, and ongoing ramp-up of production and commercialisation of its disease resistant ‘SPR’ shrimp and Advanced Nutrition’s expansion into nursery and grow-out segments in shrimp, diversifying the product range. 
Q1'20 results reflect the impact of well-flagged challenges in Advanced Nutrition markets owing to ongoing conditions in shrimp and Mediterranean fin fish markets, as well as a positive outlook in Genetics. The Company is advancing its program of disposals leading to estimated gross proceeds of up to £35m, with £1.5m completed in Q120.
With the Company anticipating FY20 in line with expectations, we have made a full review of our forecasts post FY20 based on the use of proceeds. We have increased our sales and EBITDA forecasts in FY21/22 by c 4% and 1% respectively, upgrading sales and adjusted EBITDA for Genetics by c 14%. Even after adding in additional CAPEX and working capital to support product launches, we factor in an improved financial position. 
The cash boost facilitates the Company’s strategic aims and improves its financial headroom, leading to an improvement in our near-term cash flow forecasts and a tighter, more focused business. We have increased our valuation from £382m to £479m, equivalent to 72 pence per share, including the 107m new shares.
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