Sheffield’s Benchmark Holdings focuses on long term growth in a poor profit year

Sheffield’s Benchmark Holdings PLC, the aquaculture breeding, animal health, technical publishing and sustainability science business, continues to sees steady growth as the half yearly mark approaches.

Much of the company’s success has derived from the integration of businesses it has acquired to form a new Breeding and Genetics division.

However, the company has felt an intense pressure in the market for its Salmosan product, a core part of our Animal Health division. As a result, the Company is providing guidance that it expects revenue and profits to be significantly below market expectations for the full year.

To counter this dip in revenue, the sales strategy for Salmosan has been altered to reward loyalty and the company has succeeded in securing new volume supply contracts with a number of major customers, which is expected to stabilise sales volumes into next year.

Benchmark Holdings’ product development pipeline continues to progress and is one of the strongest in the aquaculture arena, comprising 46 products covering a total addressable market of approximately £390m per annum.

The company’s projected profit took another hit as two late stage development products, which were expected to generate first revenues in 2015, have been pushed back. One is a new sea lice treatment which has been impacted by delays in the delivery of application technology; the other was delayed by a change to disease management practices in the field and is expected to be launched in 2016.

The HypoCat product development is progressing as expected, with recent efficacy trials showing successful results and dose ranging trials in preparation for toxicity due to commence in the next quarter.

The Breeding and Genetics division is performing strongly, with results in line with expectations despite the untimely currency conditions affecting the Norwegian Krone. The management teams of SalmoBreed and Stofnfiskur are cooperating and the integration is proceeding to plan with the first phase of operational synergies being realised. Customer response to the acquisitions has been extremely positive, with their support being demonstrated in the increased demand for both companies’ products.

The Technical Publishing division is also performing well, with results in line with projections. The recently acquired veterinary training and CPD business Improve International is having a positive effect on the performance of the division. Training and education programmes are a key component in the division’s growth, and a restructuring of the Publishing division has been completed, establishing a solid platform for the future.

Despite sales taking a negative impact, the Board remains confident that Benchmark’s overall strategy is succeeding, and, as a result, that the current growth trajectory will continue. Salmosan revenues are recovering, the Technical Publishing division is moving into profitability, and the combination of SalmoBreed and Stofnfiskur to form the Breeding and Genetics division is diversifying the Company’s revenue streams and driving strong growth.

Malcolm Pye, Benchmark’s chief executive officer, said: “Whilst our profit performance for this financial year is likely to be disappointing, we have continued to deliver on our strategy of pursuing more diversified revenue streams. To this end, our investment in new animal health products, including new generation sea lice treatments and vaccines, together with the launch of the aquaculture breeding and genetics business and our HypoCat product development programme, is on plan and presenting significant opportunities for long term profit growth. We remain confident in our strategic plan and focussed on its delivery.”

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