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Benchmark Holdings Plc Earnings Release 2021
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 8023T
Benchmark Holdings PLC
29 November 2021
29 November 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")
Q4 Results
(3 months ended 30 September 2021)
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 30 September 2021 (the "period"). All Q4FY21 and Q4FY20 figures quoted in this announcement are based on unaudited accounts.
This morning the Company published its full year audited results for the 12 months ended 30 September 2020 which can be found on https://www.benchmarkplc.com/investors
Highlights - strong performance
· Revenues £37.3m, 48% ahead of the prior year (+51% CER) (continuing operations) with strong performance across all business areas:
o Genetics - revenues 35% above Q4 2020 (+34% CER) driven by higher sales of salmon eggs and harvest income
o Advanced Nutrition - revenues 41% above the prior year (+49% CER) continuing its strong performance
o Health revenues - +207% Q4 2020 (+215% CER) benefitting from first sales of Ectosanâ Vet and CleanTreatâ
· Adjusted EBITDA of £7.1m, 51% ahead driven by higher sales partially offset by higher costs and R&D expenses as activities normalise post Covid-19
· Cash of £40.2m and Liquidity of c £51.4m (cash and available facility) as at 26 November 2021
| £m | Q4 FY21 | Q4 FY20 | % AER | % CER** | FY21 (full year) |
FY20 |
| Revenue from continuing operations | 37.3 | 25.2 | 48% | 51% | 125.1 | 105.6 |
| Adjusted | ||||||
| Adjusted EBITDA1 from continuing operations | 7.1 | 4.7 | 51% | 55% | 19.4 | 14.5 |
| Adj. EBITDA excluding biological asset movements | 6.1 | 3.1 | 97% | 98% | 16.1 | 11.2 |
| Adjusted Operating Profit2 | 3.5 | 2.7 | 30% | 35% | 10.8 | 7.9 |
| Statutory | ||||||
| Operating profit/(loss) | 0.5 | (2.8) | (5.4) | (10.9) | ||
| Loss before tax from continuing operations | (3.2) | (2.9) | (9.2) | (22.6) | ||
| Loss for the Period - total incl. discontinued operations | (5.7) | (8.8) | (11.6) | (31.9) | ||
| Basic loss per share (p) | (0.91) | (1.43) | (1.93) | (5.26) | ||
| Net debt3 | (80.9) | (37.6) | (80.9) | (37.6) | ||
| Net debt excluding lease liabilities | (56.9) | (27.1) | (56.9) | (27.1) |
** Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates
(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure.
(2) Adjusted Operating Profit is operating loss before exceptional items including acquisition related items and amortisation of intangible assets excluding development costs
(3) Net debt is cash and cash equivalents less loans and borrowings
Business Area Summary (Continuing operations)
| £m | Q4 FY21 | Q4 FY20 | % AER | % CER** | FY21 (full year) |
FY20 |
| Revenue | ||||||
| Advanced Nutrition | 17.1 | 12.1 | 41% | 49% | 70.5 | 59.4 |
| Genetics | 15.9 | 11.8 | 35% | 34% | 46.8 | 41.5 |
| Health | 4.3 | 1.4 | 207% | 215% | 7.8 | 5.2 |
| Adjusted EBITDA1 | ||||||
| Advanced Nutrition | 3.6 | 0.2 | 1700% | 1781% | 13.8 | 6.4 |
| Genetics | 3.3 | 4.6 | -28% | -33% | 11.5 | 14.4 |
| - Net of fair value movements in biological assets | 2.3 | 3.0 | -23% | -33% | 8.1 | 11.2 |
| Health | 1.1 | 0.2 | 450% | 633% | (2.7) | (3.7) |
** Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates
(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure.
Operational highlights
· First Ectosan® Vet and CleanTreat® sea lice treatments delivered showing excellent efficacy
· CleanTreat® received the highest level of recognition for environmental protection and sustainability by the Aquaculture Stewardship Council
· Ectosan® Vet patent grant approved giving 20 year protection
· First SPR shrimp stocked at new JV multiplication centre in Thailand
· Post period end, entered long-term strategic cooperation with Regal Springs, the world's No.1 Premium Tilapia company to support its breeding programmes for premium natural grown Tilapia
· Post period end Advanced Nutrition launched Natura pRo and ExL, a new feed protocol to substitute rotifers (live feed)
Market environment - positive outlook
· Recovery in global shrimp markets with potential to bounce back to pre-COVID-19 levels
· Stable salmon markets; demand growth continues to exceed global supply
· The seabass and seabream market have substantially recovered
Current trading and outlook
· Trading in line with FY22 expectations
o Consistency in performance continuing in Genetics and Advanced Nutrition
o Health starts benefitting from Ectosan® Vet and CleanTreat® revenue stream
· Market environment
o Salmon markets are solid with positive outlook for continuous growth
o Global shrimp markets showing recovery
o Sea bass and sea bream markets recovered and stable
Enquiries
| For further information, please contact: | |
| Benchmark Holdings plc | Tel: 0114 240 9939 |
| 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 8990 / 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 Group continued its good performance in Q4 2021. Our three business areas delivered strong results, with strong revenue growth in Advanced Nutrition and Genetics and Health benefitting from first sales of Ectosanâ Vet and CleanTreatâ.
Group revenues from continuing operations for the quarter at £37.3m were 48% ahead of the prior year (+51% CER) reflecting good performance across all business areas, adding to three quarters of strong performance. The continuing good performance in Q4 highlights the momentum achieved through the implementation of our strategic priorities framework, culture change and renewed commercial focus. Our performance continued to benefit from a recovery in the shrimp markets and stable salmon and sea bass and sea bream markets.
Operating costs in Q4 2021 were £10.2m, 48% above the prior year. R&D expenses were £1.8m, 38% up reflecting a return to normal activities and spend after a pause during the COVID-19 pandemic.
Adjusted EBITDA from continuing operations for the quarter was £7.1m against £4.7m in Q4 2020 as a result of higher revenues partially offset by an increase in operating costs. Loss before tax for the quarter of £3.2m compared to the £2.9m for the same period in FY20.
We continued to make good progress in our strategic priorities achieving the highest level of recognition for environmental protection and sustainability by the Aquaculture Stewardship Council for our water purification system CleanTreatâ, stocking of the first shrimp in our JV multiplication centre in Thailand and through continued innovation in Advanced Nutrition with the launch of a new feed protocol to substitute rotifers (live feed).
Advanced Nutrition
Advanced Nutrition performed strongly in the quarter with revenues of £17.1m up 41% and growth across all product areas - Artemia, diets and health. Artemia sales grew by (+£1.5m), Diets (+£2.6m) and Health (+£0.7m). Increase in sales to EMEA (+£1.7m) Asia (+£2.5m), and Americas (+£0.8m).
The good performance is the result of a successful commercial programme and continued recovering shrimp and seabass/seabream markets. Adjusted EBITDA in Q4 2021 was £3.6m (Q4 2020: £0.2m). The increase in Adjusted EBITDA margin reflects higher sales, as well as growth in diets (which have a higher margin) and ongoing cost control.
By region, Asia and Europe performed strongly while the Americas remain challenging partly because of the ongoing COVID-19 pandemic and logistical difficulties.
Genetics
Genetics performed well in the period with revenues of £15.9m, 35% above the prior year (Q4 2020: £11.8m) driven by higher sales of salmon eggs including the first sales from our new facility in Chile and higher harvest revenues reflecting the first full year of operation of our broodstock licence in Salten where we sell surplus broodstock as harvested fish.
Adjusted EBITDA for Q4 2021 of £3.3m was 28% lower than prior year (Q4 2020: £4.6m) as a result of an increase in operating costs and R&D expenses as operations normalise post COVID-19, expenses associated with the ramp up of operations in Chile and a lower fair value uplift in biological assets of £1.0m, £0.6m lower than the same period in FY20 (Q4 2020: uplift £1.6m), which together offset the increased margin from higher sales.
The biological asset increase of £0.7m in the quarter (Q4 2020: £2.7m) was impacted by adverse foreign exchange movements of £0.4m (Q4 2020: adverse £0.9m) and includes a lower fair value increase than in Q4 2020 as noted above.
By species, salmon performed well, and we continued to win new contracts for future delivery in the emerging land-based segment where we have established a leading position. The expansion of the incubation facility in Iceland is progressing according to plan. In Chile, we continued our efforts to penetrate the market in a disciplined manner, achieving first egg sales in the period.
In shrimp, test market sales of our SPR shrimp continued in the period and the expansion of the Fellsmere facility in Florida is now complete. We are planning a phased entry into the Asian markets ensuring that we have an optimised product in each region. During Q4 we capitalised £0.6m of development costs (YTD Q4 2021: £1.9m) and incurred operating costs of £0.5m in this area (YTD Q4 2021: £1.4m).
In Tilapia, our focus is on achieving profitability by seeking new commercial opportunities and establishing the optimal scale for a sustainably profitable business. In Q4 2021 we commenced a capex project to significantly increase the capacity of our Miami facility by installing heating to allow year-round production. During the period we incurred £0.3m of operating costs in this area (YTD Q4 2021: £0.9m).
Health
Revenues in Q4 FY21 from continuing operations of £4.3m were significantly above the prior year (Q4 FY20 (restated): £1.4m) due to first sales from our new Ectosan® Vet and CleanTreat® solution commencing in August. We also had higher sales of Salmosan in Canada, Norway and the Faroes. Adjusted EBITDA from continuing operations in Q4 2021 was a profit of £1.1m (Q4 2020: profit of £ 0.2m) reflecting the higher revenues.
Operating costs associated with Ectosan® Vet and CleanTreat® were £0.1m, and capex investment in CleanTreat® was £1.2m in the quarter.
Ectosanâ Vet has performed as expected with efficacy above 99%. CleanTreatâ has performed above expectations on its operational efficiency. During the period CleanTreat® received the highest level of recognition for environmental protection and sustainability by the Aquaculture Stewardship Council (ASC), the world's leading certification scheme for farmed aquaculture.
Post period end the Ectosan® Vet patent grant was approved giving 20 year protection.
Finance costs, cashflow and net debt
Net finance cost for the quarter of £3.7m is significantly higher than the prior year (Q4 2020: £0.2m). Interest charge (including interest expense on right-of-use assets) of £2.2m (Q4 2020: £2.0m) was slightly higher due to £0.2m increase in interest on right-of-use assets. Q4 2021 had forex losses of £1.2m (Q4 2020: £1.0m gain) and an adverse movement on the fair value of the financial instrument used to hedge the currency and interest risk on the NOK bond financing of £0.3m (Q4 2020: £0.8 gain).
Net debt at the quarter end was £80.9m (30 June 2021: £54.7m; 30 Sept 2020: £37.6m) and Net debt excluding lease liabilities was £56.9m (30 June 2021: £45.3m; 30 Sept 2020: £27.1m). This is a result of a net cash flow generated from operating activities of £5.8m and capex and capitalised development costs of £23.1m in the year.
We have maintained financial discipline across the Group. Our priority is to retain strength in our balance sheet to keep momentum and support the execution of our growth opportunities. Liquidity at the end of the period was £50.6m providing £40.6m of headroom against our minimum liquidity covenant.
Outlook
The Group is performing in line with market expectations for the full year, with consistency in performance continuing in Genetics and Advanced Nutrition and Health starting to benefit from Ectosan® Vet and CleanTreat® revenue stream. Conditions in our markets are good with solid salmon markets and the shrimp market showing recovery.
Benchmark Holdings plc
Consolidated Statement of Comprehensive Income for the period ended 30 September 2021
| All figures in £000's | Notes | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY 2021 (audited) | FY 2020 (audited) |
| Revenue | 4 | 37,261 | 25,239 | 125,062 | 105,565 |
| Cost of sales | (17,831) | (12,317) | (59,477) | (50,603) | |
| Gross profit | 19,430 | 12,922 | 65,585 | 54,962 | |
| Research and development costs | (1,838) | (1,307) | (7,010) | (7,282) | |
| Other operating costs | (10,195) | (6,909) | (38,221) | (33,337) | |
| Share of profit/(loss) of equity-accounted investees, net of tax | (299) | (55) | (905) | 150 | |
| Adjusted EBITDA² | 7,098 | 4,651 | 19,449 | 14,493 | |
| Exceptional - restructuring/acquisition-related items | 6 | 871 | (1,356) | (184) | (2,114) |
| EBITDA¹ | 7,969 | 3,295 | 19,265 | 12,379 | |
| Depreciation and impairment | (3,309) | (1,984) | (8,359) | (6,640) | |
| Amortisation and impairment | (4,174) | (4,108) | (16,283) | (16,613) | |
| Operating profit/(loss) | 486 | (2,797) | (5,377) | (10,874) | |
| Finance cost | (3,771) | (1,934) | (7,987) | (12,779) | |
| Finance income | 40 | 1,782 | 4,185 | 1,082 | |
| Loss before taxation | (3,245) | (2,949) | (9,179) | (22,571) | |
| Tax on loss | 7 | (2,455) | (426) | (2,397) | (204) |
| Loss from continuing operations | (5,700) | (3,375) | (11,576) | (22,775) | |
| Discontinued operations | |||||
| Loss from discontinued operations, net of tax | 5 | - | (5,379) | - | (9,174) |
| (5,700) | (8,754) | (11,576) | (31,949) | ||
| Loss for the period attributable to: | |||||
| - Owners of the parent | (6,101) | (9,541) | (12,891) | (32,923) | |
| - Non-controlling interest | 401 | 787 | 1,315 | 974 | |
| (5,700) | (8,754) | (11,576) | (31,949) | ||
| Earnings per share | |||||
| Basic loss per share (pence) | 8 | (0.91) | (1.43) | (1.93) | (5.26) |
| Diluted loss per share (pence) | 8 | (0.91) | (1.43) | (1.93) | (5.26) |
| Earnings per share - continuing operations | |||||
| Basic loss per share (pence) | 8 | (0.91) | (0.62) | (1.93) | (3.80) |
| Diluted loss per share (pence) | 8 | (0.91) | (0.62) | (1.93) | (3.80) |
| All figures in £000's | £000 | £000 | £000 | £000 | |
| Adjusted EBITDA from continuing operations | 7,098 | 4,651 | 19,449 | 14,493 | |
| Adjusted EBITDA from discontinued operations | 5 | - | (2,452) | - | (8,726) |
| Total Adjusted EBITDA | 7,098 | 2,199 | 19,449 | 5,767 |
1 EBITDA - Earnings/loss before interest, tax, depreciation, amortisation and impairment
2 Adjusted EBITDA - EBITDA before exceptional and acquisition related items
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY 2021 (audited) | FY 2020 (audited) |
||
| Loss for the period | (5,700) | (8,754) | (11,576) | (31,949) | ||
| Other comprehensive income | ||||||
| Items that are or may be reclassified subsequently to profit or loss | ||||||
| Foreign exchange translation differences | 4,113 | (11,858) | (9,929) | (20,327) | ||
| Cash flow hedges - changes in fair value | 760 | (1,029) | 3,054 | (5,932) | ||
| Cash flow hedges - reclassified to profit or loss | 164 | 10 | 709 | (153) | ||
| Total comprehensive income for the period | (663) | (21,631) | (17,742) | (58,361) | ||
| Total comprehensive income for the period attributable to: | ||||||
| - Owners of the parent | (1,026) | (22,250) | (19,329) | (58,532) | ||
| - Non-controlling interest | 363 | 619 | 1,587 | 171 | ||
| (663) | (21,631) | (17,742) | (58,361) | |||
| Total comprehensive income for the period attributable to owners of the parent: | ||||||
| - Continuing operations | (1,026) | (17,099) | (19,329) | (50,604) | ||
| - Discontinued operations | - | (5,151) | - | (7,928) | ||
| (1,026) | (22,250) | (19,329) | (58,532) | |||
Benchmark Holdings plc
Consolidated Balance Sheet as at 30 September 2021
| 30 September 2021 | 30 September 2020 | ||
| All figures in £000's | Notes | (unaudited) | (audited) |
| Assets | |||
| Property, plant and equipment | 78,780 | 65,601 | |
| Right-of-use assets | 25,531 | 10,347 | |
| Intangible assets | 229,040 | 247,003 | |
| Equity-accounted investees | 3,354 | 3,690 | |
| Other investments | 15 | 23 | |
| Biological and agricultural assets | 21,244 | 16,621 | |
| Non-current assets | 357,964 | 343,285 | |
| Inventories | 20,947 | 18,926 | |
| Biological and agricultural assets | 17,121 | 15,848 | |
| Trade and other receivables | 46,498 | 39,371 | |
| Cash and cash equivalents | 39,460 | 71,605 | |
| Current assets | 124,026 | 145,750 | |
| Total assets | 481,990 | 489,035 | |
| Liabilities | |||
| Trade and other payables | (46,668) | (45,692) | |
| Loans and borrowings | 9 | (10,654) | (5,339) |
| Corporation tax liability | (5,634) | (4,344) | |
| Provisions | (563) | - | |
| Current liabilities | (63,519) | (55,375) | |
| Loans and borrowings | 9 | (109,737) | (103,819) |
| Other payables | (911) | (1,754) | |
| Deferred tax | (28,224) | (32,647) | |
| Non-current liabilities | (138,872) | (138,220) | |
| Total liabilities | (202,391) | (193,595) | |
| Net assets | 279,599 | 295,440 | |
| Issued capital and reserves attributable to owners of the parent | |||
| Share capital | 10 | 670 | 668 |
| Additional paid-in share capital | 10 | 400,682 | 399,601 |
| Capital redemption reserve | 5 | 5 | |
| Retained earnings | (154,231) | (142,170) | |
| Hedging reserve | (5,876) | (9,651) | |
| Foreign exchange reserve | 30,465 | 40,678 | |
| Equity attributable to owners of the parent | 271,715 | 289,131 | |
| Non-controlling interest | 7,884 | 6,309 | |
| Total equity and reserves | 279,599 | 295,440 |
The accompanying notes are an integral part of this consolidated financial information.
Benchmark Holdings plc
Consolidated Statement of Changes in Equity for the period ended 30 September 2021
| 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 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 |
| Comprehensive income for the period | ||||||||
| (Loss)/profit for the period | - | - | - | - | (12,891) | (12,891) | 1,315 | (11,576) |
| Other comprehensive income | - | - | (10,213) | 3,775 | - | (6,438) | 272 | (6,166) |
| Total comprehensive income for the period | - | - | (10,213) | 3,775 | (12,891) | (19,329) | 1,587 | (17,742) |
| Contributions by and distributions to owners | ||||||||
| Share issue | 2 | 1,081 | - | - | - | 1,083 | - | 1,083 |
| Share-based payment | - | - | - | - | 830 | 830 | - | 830 |
| Total contributions by and distributions to owners | 2 | 1,081 | - | - | 830 | 1,913 | - | 1,913 |
| Changes in ownership | ||||||||
| Acquisition of NCI without a change in control | - | - | - | - | - | - | (12) | (12) |
| Total changes in ownership interests | - | - | - | - | - | - | (12) | (12) |
| Total transactions with owners of the Company | 2 | 1,081 | - | - | 830 | 1,913 | (12) | 1,901 |
| As at 30 September 2021 (audited) | 670 | 400,682 | 30,470 | (5,876) | (154,231) | 271,715 | 7,884 | 279,599 |
*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 year ended 30 September 2021
| FY 2021 (audited) | FY 2020 (audited) |
|
| £000 | £000 | |
| Cash flows from operating activities | ||
| Loss for the year | (11,576) | (31,949) |
| Adjustments for: | ||
| Depreciation and impairment of property, plant and equipment | 5,017 | 6,995 |
| Depreciation and impairment of right-of-use assets | 3,342 | 2,143 |
| Amortisation and impairment of intangible fixed assets | 16,283 | 19,402 |
| Loss on sale of property, plant and equipment | 46 | (1,140) |
| Gain on sale of subsidiaries | - | (14,120) |
| Finance income | (1,442) | (111) |
| Finance costs | 7,987 | 9,695 |
| Other adjustments for non-cash items | - | 200 |
| Share of (loss)/profit of equity-accounted investees, net of tax | 905 | (150) |
| Foreign exchange gains | (1,800) | (132) |
| Share-based payment expense | 830 | 1,669 |
| Tax credit | 2,397 | 314 |
| 21,989 | (7,184) | |
| (Increase)/decrease in trade and other receivables | (8,178) | 4,202 |
| (Increase)/decrease in inventories | (3,554) | 3,741 |
| Increase in biological and agricultural assets | (5,427) | (7,474) |
| Increase in trade and other payables | 5,547 | 5,006 |
| Decrease in provisions | - | (260) |
| 10,377 | (1,969) | |
| Income taxes paid | (4,587) | (2,087) |
| Net cash flows generated from/(used in) operating activities | 5,790 | (4,056) |
| Investing activities | ||
| Proceeds from sale of subsidiaries, net of cash disposed of | - | 17,487 |
| Purchase of investments | (578) | (522) |
| Receipts from disposal of investments | 9 | 6,932 |
| Purchases of property, plant and equipment | (17,683) | (5,851) |
| Proceeds from sales of intangible assets | - | 261 |
| Purchase of intangibles | (5,038) | (5,563) |
| Purchase of held for sale assets | - | (402) |
| Proceeds from sale of fixed assets | 112 | 16,147 |
| Proceeds from sales of other long-term assets | - | 1,776 |
| Interest received | 88 | 111 |
| Net cash flows (used in)/generated from investing activities | (23,090) | 30,376 |
| Financing activities | ||
| Proceeds of share issues | 750 | 42,978 |
| Share-issue costs recognised through equity | - | (1,312) |
| Acquisition of NCI | (12) | - |
| Proceeds from bank or other borrowings | - | 8,387 |
| Repayment of bank or other borrowings | (3,106) | (10,141) |
| Interest and finance charges paid | (7,699) | (7,659) |
| Repayments of lease liabilities | (4,602) | (2,120) |
| Net cash flows (used in)/generated from financing activities | (14,669) | 30,133 |
| Net (decrease)/increase in cash and cash equivalents | (31,969) | 56,453 |
| Cash and cash equivalents at beginning of period | 71,605 | 16,051 |
| Effect of movements in exchange rate | (176) | (899) |
| Cash and cash equivalents at end of period | 39,460 | 71,605 |
The Consolidated Statement of Cash Flows presents cash flows from both Continuing and Discontinued operations in the comparatives. There were no Discontinued operations in the current period.
1. Basis of preparation
Benchmark Holdings plc (the 'Company') is a company incorporated domiciled in the United Kingdom. These consolidated interim financial statements as at and for the three months and year ended 30 September 2021 represent those of the Company and its subsidiaries (together referred to as the 'Group').
These interim 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 2021. 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. Statutory accounts for the year ended 30 September 2021 were approved by the Directors on 29 November 2021 and will be delivered to the Registrar of Companies to the Registrar of Companies after the AGM on 10 February 2022. The audit report received on those accounts was (i) unqualified, (ii) contained a material uncertainty in respect of going concern to which the auditor drew attention by way of emphasis without modifying their report and (iii) did not contain a statement under section 498(2) or (3) 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 30 September 2021 the Group had net assets of £279.6m (2020: £295.4m), including cash of £39.5m (2020: £71.6m) as set out in the Consolidated Balance Sheet. The Group made a loss for the year of £11.6m (2020: £31.9m).
As noted in the Strategic Report, we have seen some recovery in our end markets as the COVID-19 vaccine programmes across the world were rolled out in key markets and the hospitality sector reopened. The ultimate lasting impact of the pandemic on industry, the economy, Benchmark's markets and its businesses remains to some extent uncertain, but strong performance in the year has been positive and has given cause for optimism. The Directors recognise that full recovery could take time and remain cautious of the possibility of a return of restrictions while a return following the pandemic is managed across the globe. Available market analysis continues to be monitored to ensure appropriate mitigating actions can be taken as necessary.
The uncertainty relating to any lasting impact on the Group of the pandemic continues to be considered as part of the Directors' assessment of the going concern assumption, and positive preventative measures implemented by the Directors at an early stage in response to the pandemic continue to be in force where necessary. The Directors have reviewed forecasts and cash flow projections covering the period to September 2023 including downside sensitivity assumptions in relation to trading performance across the Group to assess the impact on the Group's trading and cash flow forecasts and on the forecast compliance with the covenants included within the Group's financing arrangements. 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 slower ramp up of the commercialisation of Benchmark's new sea lice treatment in the Health business area. Other key downside sensitivities modelled included assumptions on slower than expected recovery in global shrimp markets (affecting demand for Advanced Nutrition products), and slower commercialisation of SPR shrimp. As noted in the Strategic Report, the Directors have observed recovery in the shrimp markets in the strong performance of the Advanced Nutrition business during the year. Nevertheless, mitigating measures within the control of management were implemented early in the pandemic and a number of these remain in place and have been factored into the downside analysis performed. These measures include reductions in areas of discretionary spend, deferral of capital projects and temporary hold on R&D for non-imminent products.
It is difficult to predict the overall outcome and impact of the pandemic, but under all of the above scenario analysis, the Group has sufficient liquidity and resources throughout the period under review whilst still maintaining adequate headroom against the borrowing covenants. However, it should be noted that the Group's main borrowing facilities are set to expire within the next 19 months - the $15m RCF is set to expire in December 2022, and the NOK 850m bond is due to expire in June 2023. The cashflow forecasts reviewed rely on these borrowing facilities being in place. The Directors have commenced a review of the capital structure including certain short term actions and also longer term financing options, and are confident that these facilities can be renewed or replaced before they expire, with trading going well despite the headwinds of the pandemic and relationships with finance providers strong. Cash resources continue to remain strong with the group managing discretionary spend closely as recovery from the pandemic progresses.
Based on their assessment, the Directors believe it remains appropriate to prepare the financial statements on a going concern basis. However, while the Directors remain confident that the current facilities will be renewed or replaced in the next 19 months, the requirement to renew represents a material uncertainty that may cast significant doubt on the Group's and Company's ability to continue as a going concern and therefore to continue realising their assets and discharging their liabilities in the normal
1. Basis of preparation (continued)
course of business. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
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 2021.
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 defined by 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, Adjusted Profit Before Tax and Adjusted EBITDA excluding fair value movement on biological assets 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). Furthermore, the Directors also refer to current period results using constant currency, which are derived by retranslating current period results using prior year's foreign exchange rates.
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 2021.
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 - following the divestment programme completed in the previous year the segment now focuses 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 previous two years.
In order to reconcile the segmental analysis to the consolidated income statement, corporate and inter-segment sales are also shown. Corporate sales represent revenues earned from recharging certain central costs to the operating business areas, 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 | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
| Genetics | 15,932 | 11,833 | 46,797 | 41,504 |
| Advanced Nutrition | 17,093 | 12,094 | 70,530 | 59,362 |
| Health | 4,269 | 1,371 | 7,832 | 10,799 |
| All other segments | - | 382 | - | 9,257 |
| Corporate | 1,209 | 947 | 4,820 | 4,939 |
| Inter-segment sales | (1,242) | (989) | (4,917) | (5,469) |
| Total | 37,261 | 25,638 | 125,062 | 120,392 |
| Segmental Adjusted EBITDA | ||||
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
| Genetics | 3,309 | 4,648 | 11,528 | 14,442 |
| Advanced Nutrition | 3,644 | 181 | 13,802 | 6,266 |
| Health | 1,104 | (2,353) | (2,685) | (12,886) |
| All other segments | - | 103 | - | 244 |
| Corporate | (959) | (380) | (3,196) | (2,299) |
| Total | 7,098 | 2,199 | 19,449 | 5,767 |
Reconciliations of segmental information to IFRS measures
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
| Total revenue per segmental information | 37,261 | 25,638 | 125,062 | 120,392 |
| Less: revenue from discontinued operations | - | (399) | - | (14,827) |
| Consolidated revenue | 37,261 | 25,239 | 125,062 | 105,565 |
| Reconciliation of Reportable Segments Adjusted EBITDA to Loss before taxation from continuing operations | ||||
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
| Total reportable segment Adjusted EBITDA | 8,057 | 2,476 | 22,645 | 7,822 |
| All other segments and Corporate Adjusted EBITDA | (959) | (277) | (3,196) | (2,055) |
| 7,098 | 2,199 | 19,449 | 5,767 | |
| Less: Adjusted EBITDA from discontinued operations | - | 2,452 | - | 8,726 |
| Adjusted EBITDA from continuing operations | 7,098 | 4,651 | 19,449 | 14,493 |
| Exceptional - restructuring/acquisition-related items | 871 | (1,356) | (184) | (2,114) |
| Depreciation and impairment | (3,309) | (1,984) | (8,359) | (6,640) |
| Amortisation and impairment | (4,174) | (4,108) | (16,283) | (16,613) |
| Net finance costs | (3,731) | (152) | (3,802) | (11,697) |
| Loss before taxation from continuing operations | (3,245) | (2,949) | (9,179) | (22,571) |
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 30 September 2021 (unaudited) | ||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | |
| Sale of goods | 14,925 | 17,077 | 2,593 | - | - | - | 34,595 | - | 34,595 | |
| Provision of services | 990 | - | 1,676 | - | - | - | 2,666 | - | 2,666 | |
| Inter-segment sales | 17 | 16 | - | - | 1,209 | (1,242) | - | - | - | |
| 15,932 | 17,093 | 4,269 | - | 1,209 | (1,242) | 37,261 | - | 37,261 |
| 3 months ended 30 September 2020 (unaudited) | |||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | ||
| Sale of goods | 11,149 | 12,081 | 1,323 | 116 | - | - | 24,669 | 123 | 24,546 | ||
| Provision of services | 646 | - | 47 | 276 | - | - | 969 | 276 | 693 | ||
| Inter-segment sales | 38 | 13 | 1 | (10) | 947 | (989) | - | - | - | ||
| 11,833 | 12,094 | 1,371 | 382 | 947 | (989) | 25,638 | 399 | 25,239 | |||
| 12 months ended 30 September 2021 (unaudited) | |||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | ||
| Sale of goods | 41,947 | 70,458 | 6,135 | - | - | - | 118,540 | - | 118,540 | ||
| Provision of services | 4,825 | - | 1,697 | - | - | - | 6,522 | - | 6,522 | ||
| Inter-segment sales | 25 | 72 | - | - | 4,820 | (4,917) | - | - | - | ||
| 46,797 | 70,530 | 7,832 | - | 4,820 | (4,917) | 125,062 | - | 125,062 | |||
| 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 |
4. Revenue (continued)
Sale of goods and provision of services (continued)
Primary geographical markets
| 3 months ended 30 September 2021 (unaudited) | ||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | |
| Norway | 10,526 | 135 | 2,898 | - | - | - | 13,559 | - | 13,559 | |
| UK | 276 | 20 | 145 | - | - | - | 441 | - | 441 | |
| Faroe Islands | 1,171 | 2 | 180 | - | - | - | 1,353 | - | 1,353 | |
| Ecuador | - | 1,057 | - | - | - | - | 1,057 | - | 1,057 | |
| India | - | 3,029 | - | - | - | - | 3,029 | - | 3,029 | |
| Greece | - | 986 | - | - | - | - | 986 | - | 986 | |
| Singapore | - | 1,954 | - | - | - | - | 1,954 | - | 1,954 | |
| Chile | 400 | 1 | 296 | - | - | - | 697 | - | 697 | |
| Turkey | - | 1,109 | - | - | - | - | 1,109 | - | 1,109 | |
| Rest of Europe | 2,347 | 763 | - | - | - | - | 3,110 | - | 3,110 | |
| Rest of World | 1,195 | 8,021 | 750 | - | - | - | 9,966 | - | 9,966 | |
| Inter-segment sales | 17 | 16 | - | - | 1,209 | (1,242) | - | - | - | |
| 15,932 | 17,093 | 4,269 | - | 1,209 | (1,242) | 37,261 | - | 37,261 |
| 3 months ended 30 September 2020 (unaudited) | ||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | |
| Norway | 5,735 | 187 | 180 | - | - | - | 6,102 | - | 6,102 | |
| UK | 818 | 49 | 42 | 354 | - | - | 1,263 | 356 | 907 | |
| Faroe Islands | 1,797 | - | 80 | - | - | - | 1,877 | - | 1,877 | |
| Ecuador | - | 1,410 | - | - | - | - | 1,410 | - | 1,410 | |
| India | - | 1,810 | - | - | - | - | 1,810 | - | 1,810 | |
| Greece | - | 641 | - | - | - | - | 641 | - | 641 | |
| Singapore | - | 1,099 | - | - | - | - | 1,099 | - | 1,099 | |
| Chile | 95 | 5 | 827 | - | - | - | 927 | 2 | 925 | |
| Turkey | - | 402 | - | - | - | - | 402 | - | 402 | |
| Rest of Europe | 2,098 | 684 | 17 | - | - | - | 2,799 | - | 2,799 | |
| Rest of World | 1,252 | 5,794 | 224 | 38 | - | - | 7,308 | 41 | 7,267 | |
| Inter-segment sales | 38 | 13 | 1 | (10) | 947 | (989) | - | - | - | |
| 11,833 | 12,094 | 1,371 | 382 | 947 | (989) | 25,638 | 399 | 25,239 |
4. Revenue (continued)
Primary geographical markets (continued)
| 12 months ended 30 September 2021 (unaudited) | ||||||||||
| All figures in £000's | Genetics | Advanced Nutrition | Health | All other segments | Corporate | Inter-segment sales | Total | Discontinued | Continued | |
| Norway | 27,129 | 570 | 3,689 | - | - | - | 31,388 | - | 31,388 | |
| UK | 3,843 | 117 | 622 | - | - | - | 4,582 | - | 4,582 | |
| Faroe Islands | 5,636 | 18 | 348 | - | - | - | 6,002 | - | 6,002 | |
| Ecuador | - | 4,066 | - | - | - | - | 4,066 | - | 4,066 | |
| India | - | 12,166 | 3 | - | - | - | 12,169 | - | 12,169 | |
| Greece | 25 | 6,108 | - | - | - | - | 6,133 | - | 6,133 | |
| Singapore | - | 7,544 | - | - | - | - | 7,544 | - | 7,544 | |
| Chile | 437 | 7 | 2,335 | - | - | - | 2,779 | - | 2,779 | |
| Turkey | - | 5,977 | - | - | - | - | 5,977 | - | 5,977 | |
| Rest of Europe | 6,922 | 4,208 | 26 | - | - | - | 11,156 | - | 11,156 | |
| Rest of World | 2,780 | 29,677 | 809 | - | - | - | 33,266 | - | 33,266 | |
| Inter-segment sales | 25 | 72 | - | - | 4,820 | (4,917) | - | - | - | |
| 46,797 | 70,530 | 7,832 | - | 4,820 | (4,917) | 125,062 | - | 125,062 |
| 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 | ||
| Turkey | - | 3,236 | - | - | - | - | 3,236 | - | 3,236 | ||
| Rest of Europe | 5,421 | 4,554 | 1,566 | 2,549 | - | - | 14,090 | 4,071 | 10,019 | ||
| Rest of World | 2,791 | 26,434 | 1,040 | 532 | - | - | 30,797 | 936 | 29,861 | ||
| 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 | |||
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 30 June 2020, 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 30 June 2020 to reflect these changes.
Results from discontinued operations
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Revenue | - | 399 | - | 14,827 | |
| Cost of sales | - | (1,918) | - | (13,000) | |
| Gross profit | - | (1,519) | - | 1,827 | |
| Research and development costs | - | (263) | - | (2,725) | |
| Other operating costs | - | (670) | - | (7,828) | |
| Adjusted EBITDA | - | (2,452) | - | (8,726) | |
| Exceptional items | - | (34) | - | 5,086 | |
| EBITDA | - | (2,486) | - | (3,640) | |
| Depreciation and impairment | - | (803) | - | (2,498) | |
| Amortisation and impairment | - | (2,035) | - | (2,789) | |
| Operating loss | - | (5,324) | - | (8,927) | |
| Finance costs | - | (55) | - | (137) | |
| Loss before taxation | - | (5,379) | - | (9,064) | |
| Tax on loss | - | - | - | (110) | |
| Loss from discontinued operations | - | (5,379) | - | (9,174) |
Results from discontinued operations by segment
| Advanced Nutrition | Health | All other segments | Corporate | Total Discontinued | ||
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2021 (unaudited) |
Q4 2021 (unaudited) |
Q4 2021 (unaudited) |
Q4 2021 (unaudited) |
|
| Revenue | - | - | - | - | - | |
| Adjusted EBITDA | - | - | - | - | - | |
| Operating loss | - | - | - | - | - | |
| Advanced Nutrition | Health | All other segments | Corporate | Total Discontinued | ||
| All figures in £000's | Q4 2020 (unaudited) |
Q4 2020 (unaudited) |
Q4 2020 (unaudited) |
Q4 2020 (unaudited) |
Q4 2020 (unaudited) |
|
| Revenue | - | 8 | 391 | - | 399 | |
| Adjusted EBITDA | (25) | (2,516) | 120 | (31) | (2,452) | |
| Operating loss | (25) | (4,379) | (889) | (31) | (5,324) |
5. Discontinued activities (continued)
Results from discontinued operations by segment (continued)
| Advanced Nutrition | Health | All other segments | Corporate | Total Discontinued | ||
| All figures in £000's | FY2021 (audited) | FY2021 (audited) | FY2021 (audited) | FY2021 (audited) | FY2021 (audited) | |
| Revenue | - | - | - | - | - | |
| Adjusted EBITDA | - | - | - | - | - | |
| Operating loss | - | - | - | - | - | |
| 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)/profit | (394) | (11,914) | 3,818 | (437) | (8,927) |
6. Exceptional - restructuring/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 | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Acquisition related items | (850) | 586 | (850) | 586 | |
| Exceptional restructuring and disposal items | 110 | 770 | 480 | 1,528 | |
| Cost in relation to disposals | (131) | - | 554 | - | |
| Total exceptional items | (871) | 1,356 | 184 | 2,114 |
Acquisition related items are costs incurred in investigating and acquiring new businesses. In Q4 2021 contingent consideration of £850,000 was released in relation to the purchase of Benchmark Genetics (USA) Inc.
Exceptional restructuring and disposal items in Q4 2021 include £110,000 of staff costs relating to the Board's decision to make significant changes to the Group's management team and bring in new management.
Costs in relation to disposals include credits of £94,000 of legal fees, £17,000 of lease costs, and £20,000 of other disposal items. These relate to accrual releases relating to disposals that occurred in the prior year.
7. Taxation
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Analysis of charge in period | |||||
| Current tax: | |||||
| Current income tax expense on profits for the period | 2,716 | 506 | 5,383 | 3,141 | |
| Adjustment in respect of prior periods | 502 | 836 | 502 | 836 | |
| Total current tax charge | 3,218 | 1,342 | 5,885 | 3,977 | |
| Deferred tax: | |||||
| Origination and reversal of temporary differences | (768) | (634) | (3,228) | (3,490) | |
| Deferred tax movements in respect of prior periods | 5 | (282) | (260) | (283) | |
| Total deferred tax credit | (763) | (916) | (3,488) | (3,773) | |
| Total tax charge on continuing operations | 2,455 | 426 | 2,397 | 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.
| Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Loss attributable to equity holders of the parent (£000) | ||||
| Continuing operations | (6,101) | (4,162) | (12,891) | (23,749) |
| Discontinued operations | - | (5,379) | - | (9,174) |
| Total | (6,101) | (9,541) | (12,891) | (32,923) |
| Weighted average number of shares in issue (thousands) | 670,141 | 667,654 | 669,459 | 625,466 |
| Basic loss per share (pence) | ||||
| Continuing operations | (0.91) | (0.62) | (1.93) | (3.80) |
| Discontinued operations | - | (0.82) | - | (1.46) |
| Total | (0.91) | (1.43) | (1.93) | (5.26) |
Diluted 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 30 September 2021, a total of 4,615,712 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 30 September 2021 the whole facility (USD 15m) was undrawn.
10. Share capital and additional paid-in share capital
| Number | Share Capital | Additional paid-in share capital |
|
| Allotted, called up and fully paid | £000 | £000 | |
| Ordinary shares of 0.1 penny each | |||
| Balance at 30 September 2020 | 667,685,612 | 668 | 399,601 |
| Exercise of share options | 2,152,600 | 2 | 748 |
| Shares issued as contingent consideration for a previous acquisition | 536,272 | - | 333 |
| Balance at 30 September 2021 | 670,374,484 | 670 | 400,682 |
During the period contingent consideration totalling USD 450,000 (£333,000) became payable following the acquisition of aquaculture breeding programmes centred on shrimp from Centro de Investigación de la Acuicultura de Colombia Ceniacua on 11 August 2016. At the Group's discretion, the contingent consideration was paid in ordinary shares in the Group and the Group therefore issued 536,272 ordinary shares of 0.1p each on 13 January 2021 to settle this liability.
During the period ended 30 September 2021, the Group issued a total of 2,152,600 shares of 0.1p each to certain employees of the Group relating to share options, of which 426,182 were exercised at a price of 0.1 pence, 1,626,436 were exercised at a price of 42.5 pence and 99,982 were exercised at a price of 58.5 pence.
11. Alternative performance measures and other metrics
Management has presented the performance measures EBITDA, Adjusted EBITDA, Adjusted EBITDA before fair value movement in biological assets, 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 and acquisition related expenditure and is shown on the Income Statement.
Adjusted EBITDA before fair value movements in biological assets, which is Adjusted EBITDA before the non-cash fair value movements in biological assets arising from their revaluation in line with International Accounting Standards.
Adjusted Operating Profit/Loss is operating loss before exceptional items including 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 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.
11. Alternative performance measures and other metrics (continued)
Reconciliation of adjusted operating profit to operating profit/(loss)
Continuing operations
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Revenue | 37,261 | 25,239 | 125,062 | 105,565 | |
| Cost of sales | (17,831) | (12,317) | (59,477) | (50,603) | |
| Gross profit | 19,430 | 12,922 | 65,585 | 54,962 | |
| Research and development costs | (1,838) | (1,307) | (7,010) | (7,282) | |
| Other operating costs | (10,195) | (6,909) | (38,221) | (33,337) | |
| Depreciation and impairment | (3,309) | (1,984) | (8,359) | (6,640) | |
| Amortisation of capitalised development costs | (299) | - | (299) | - | |
| Share of (loss)/profit of equity accounted investees net of tax | (299) | (55) | (905) | 150 | |
| Adjusted operating profit | 3,490 | 2,667 | 10,791 | 7,853 | |
| Exceptional - restructuring/acquisition-related items | 871 | (1,356) | (184) | (2,114) | |
| Amortisation and impairment of intangible assets excluding development costs | (3,875) | (4,108) | (15,984) | (16,613) | |
| Operating profit/(loss) | 486 | (2,797) | (5,377) | (10,874) |
Reconciliation of loss before taxation to adjusted profit/(loss) before tax
Continuing operations
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Loss before taxation | (3,245) | (2,949) | (9,179) | (22,571) | |
| Exceptional - restructuring, disposal and acquisition related items | (871) | 1,356 | 184 | 2,114 | |
| Amortisation and impairment of intangible assets excluding development costs | 3,875 | 4,108 | 15,984 | 16,613 | |
| Adjusted (loss)/profit before tax | (241) | 2,515 | 6,989 | (3,844) |
Other metrics
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Total R&D Investment | |||||
| Research and development costs | |||||
| - Continuing operations | 1,838 | 1,307 | 7,010 | 7,282 | |
| - Discontinued operations | - | 263 | - | 2,725 | |
| 1,838 | 1,570 | 7,010 | 10,007 | ||
| Internal capitalised development costs | 1,351 | 1,624 | 4,813 | 4,583 | |
| Total R&D investment | 3,189 | 3,194 | 11,823 | 14,590 |
11. Alternative performance measures and other metrics (continued)
| All figures in £000's | Q4 2021 (unaudited) |
Q4 2020 (unaudited) |
FY2021 (audited) | FY 2020 (audited) |
|
| Adjusted EBITDA excluding fair value movement in biological assets | |||||
| Adjusted EBITDA | 7,098 | 4,651 | 19,449 | 14,493 | |
| Exclude fair value movement in biological assets | (996) | (1,555) | (3,323) | (3,253) | |
| Adjusted EBITDA excluding fair value movement in biological assets | 6,102 | 3,096 | 16,126 | 11,240 |
Liquidity
Following the refinancing in June 2019 a key financial covenant is a minimum liquidity of £10m, defined as cash plus undrawn facilities.
| 30 September 2021 | ||
| All figures in £000's | (audited) | |
| Cash and cash equivalents | 39,460 | |
| Undrawn bank facility | 11,138 | |
| 50,598 |
12. Net debt
Net debt is cash and cash equivalents less loans and borrowings.
| 30 September 2021 | 30 September 2020 | ||
| All figures in £000's | (unaudited) | (audited) | |
| Cash and cash equivalents | 39,460 | 71,605 | |
| Loans and borrowings (excluding lease liabilities) - current | (1,612) | (2,856) | |
| Loans and borrowings (excluding lease liabilities) - non-current | (94,792) | (95,863) | |
| Net debt excluding lease liabilities | (56,944) | (27,114) | |
| Lease liabilities - current | (9,042) | (2,483) | |
| Lease liabilities - non-current | (14,945) | (7,956) | |
| Net debt | (80,931) | (37,553) |
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