Strong performance and improving outlook

Benchmark Holdings’ FY21 and particularly its Q4 (July to September) results confirmed the strong recovery in the business, led by its nutrition business, that had been indicated in the October pre-close trading update. An improving outlook in its key shrimp market and good conditions in the salmon and sea bass/bream sectors underpins an upgrade of our financial forecasts for FY22 and beyond.

With £20m raised via a placing, Benchmark is now in a stronger position to invest in capital expansion projects ahead of the refinancing of its NOK bond, which falls due in 2023. A possible share listing in Norway next year may also provide better access to aquaculture-specific investors/capital.

Taken together, these elements boost our overall valuation. We have updated our model and increased our expectations across the board to reflect the current outlook and trends as well as the placing of 33m shares at 62p/share. Our revised estimate of the fair value is now £583m, up from £550m, which is equivalent to 83p/share based on the enlarged share count.