With a refreshed management team in place led by the experienced Peter George (Executive Chairman) and Septima Maguire (CFO) plus a new CEO to come, the Group will now focus on monetising its research and product portfolio.
While Benchmark generated good FY19 performance in its Genetics and Animal Health divisions, previously flagged challenging conditions in Advanced Nutrition contributed to the acceleration of a restructuring process. This includes a vigorous review of non-core assets with a view to their disposal or closure, helping ensure the Group’s ongoing financial liquidity.
Factoring in disposals and efficiencies, our new forecasts indicate liquidity within its NOK bond-lending covenant terms, supporting our 2020-22 sales CAGR estimate of 12%. Sales will be driven by launches of BMK’s innovative sea lice treatment BMK08, shrimp genetics products and sustained underlying performance.
Our new DCF valuation of BMK is £382m or 68 pence per share, after using an 11% discount rate and 2.5% long-term growth rate. With key product launches in sight, the Group’s prospects are underpinned by the growing importance of sustainability and environmental, social and governance (ESG) factors.
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