Q1 results: consistent growth continues

For the three months to 31 December 2022, Benchmark Holdings reported revenue +36.2%YoY at £54.5m, and (adj.) EBITDA +47.7%YoY (excluding fair value adjustment for biological assets, +61%YoY), to £11.0m reflecting the combination of strong top line growth, capacity utilisation and cost control. As a result, (adj.) EBITDA profitability continued to improve, from an average of 19.7% through FY22, to 20.1%. The operating loss was £0.12m (Q122: £1.46m loss), on an adjusted basis, a £0.85m profit. The Q1 cash position was £42.8m and net debt (excluding leases) reduced from £47.5m at December 2022 to £37.9m. Cash at 24 February 2023 was £37.5m.

The strength of Q1 23 performance, and in particular the contribution from the Health business area, gives substance to Benchmark’s stated confidence in the outlook for FY23. We have raised our FY23 (adj.) EBITDA outlook by 11% to £36.5m, and for FY24 by 9% to £43.0m, equating to a FY24 EV/EBITDA of 8.0x.

Our fair value for Benchmark remains 63p/share.