Benchmark Holdings Regulatory News (BMK)

2 February 2016

BENCHMARK HOLDINGS PLC

("Benchmark" or the "Company" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

AND UPDATE POST PERIOD END

DIVERSIFIED REVENUE STREAMS AND SUCCESSFUL INTEGRATION OF ACQUISITIONS

Benchmark is pleased to announce its Preliminary Results for the year ended 30 September 2015 (the 'period')

The period under review was a year of transformational growth for Benchmark. We are delivering against the strategy first set out at IPO, and have been making significant investment in our infrastructure and technological capabilities across the business to create the solid foundations we need to realise our vision and stay ahead of the curve in our fast-paced markets.

Revenue growth in 2015 was underpinned by the performance of the Group's Breeding and Genetics division formed through the acquisitions of SalmoBreed and StofnFiskur, which also contributed to more diversified revenue streams.

Post-period end, Benchmark completed the reverse acquisition of INVE Aquaculture Holdings ("INVE") for a total consideration of $342 million, a transformational transaction which forms the Company's final division - Advanced Animal Nutrition. This acquisition immediately position Benchmark as a global leader in the shrimp and marine fin fish nutritional markets.

Financial Highlights

For the year ended 30 September 2015

● Revenue increased by 25% to £44.2m (2014: £35.4m), driven by Breeding & Genetics

● Loss before tax of £11.4m (2014: £1.4m) as we accelerated investment in scientific R&D and felt the impact of a generic competitor to Salmosan/Byelice in Chile

● EBITDA from Trading Activities of £2.4m (2014: £6.6m) as we invest in corporate infrastructure

● Investment in scientific R&D (including acquired intangibles) increased to £8.8m (2014: £6.4m)

● Loss per Share from Trading Activities of 1.13p (2014: Earnings per Share of 3.29p)

● Basic loss per share of 5.96p (2014: Basic loss per share of 1.04p)

● Net cash balance of £13.6m at period end (2014: £16.5m)

Operational highlights:

● Successful integration and positive performance of newly created Breeding and Genetics division, which contributed revenues of £15.9m in the year and operating profit of £3.1m

● Technical Publishing division showed significant improvement following targeted acquisitions, with revenue increasing to £7.0m (2014: £2.9m)

● Continued progress on product pipeline and investment in R&D :

- R&D spend increased to £8.8m

- Product pipeline increased from 47 to 61

- Hypocat on track for commercial rollout in 2018

- Next generation capacity being developed at sites in both Ardtoe and Braintree

● Integration of INVE progressing according to plan

Post period end

● Reverse acquisition of INVE for a total consideration of $342 million (approximately £227 million) of which $300 million (approximately £199 million) was paid in cash and $42 million (approximately £28 million) through the issue of 32,396,158 new ordinary shares

● Financed by a placing to raise £185.7 million gross proceeds through the issue of 215,922,141 new Benchmark shares

● INVE revenues and EBITDA for year ended 31 December 2014 were $89 million and $25.4 million respectively. For the seven months ended 31 July 2015 INVE generated revenues of $60.6m and EBITDA of $15.2m. Since this date INVE has continued to trade in line with management's expectations. The integration of INVE is progressing well

● Although the Chilean border closure announced on 6 November has lasted longer than originally anticipated, resulting in subdued sales for the Breeding and Genetics division, Sernapesca (the Chilean National Fisheries and Aquaculture Service) has announced its intention to reopen its borders by 25 February, and the Company has increased its marketing efforts in Chile in response.

● The Company's other divisions have made an encouraging start to the year.

● Further information on INVE and the INVE acquisition including historical financial information on INVE and a proforma statement of net assets for the enlarged group can be found in the Company's admission document published on 11 December 2015.

(http://s3-eu-west-1.amazonaws.com/benchmarkplc.com/documents/Admission-Doc-11-12-15.pdf) 

Malcolm Pye, CEO of Benchmark, said:

"It has been a busy year for the Company. Following the acquisition of Salmobreed and Stofnfiskur last year we have successfully integrated the new Breeding and Genetics division, and are particularly proud of its contributions to the Group's revenues. Our strategy of diversification has proven successful, and that endeavour will be furthered again following the transformational INVE acquisition. Our continued investment into R&D has seen our product pipeline increase from 47 to 61, and we are continuing to develop cutting edge capabilities at our research and manufacturing facilities in Ardtoe and Braintree.

"Benchmark has always been committed to targeted M&A activity, and has recently completed the transformational acquisition of INVE Aquaculture. This newest addition to the Group creates the fifth and final 'cog' in our gearbox, and allows us the increased reach and the platform needed to rapidly scale the Company."

Annual Report and Accounts

The Company's Annual Report and Accounts for the financial year ended 30 September 2015 will be available to view on the Company's website at www.benchmarkplc.com today, and will be posted to shareholders on or around 3 February 2016.

Notes to Editors:

Founded in 2000, Benchmark represents a new model in sustainable business development. Over the last decade it has built a profitable group of companies on the economics of a sustainable food chain. The Company is growing in response to a rapidly increasing demand for sustainable food chains, and in particular for seafood, from both mature and emerging markets.

Benchmark is an ethical company with an explicit policy based on the "3E's" definition of a sustainable business - ethics, environment and economics - which guides its strategy and operations.

The Group has five divisions: Animal Health which researches, manufactures and markets medicines and vaccines particularly for aquaculture, Sustainable Science which researches and informs sustainable development in the food industry, Technical Publishing which effects technology transfer through online publishing and education, Breeding & Genetics which comprises a world-leading Salmon and aquaculture breeding business, and Advanced Animal Nutrition which provides cutting edge nutritional products and services to the aquaculture industry. Benchmark operates internationally with offices in England, Scotland, Belgium, Ireland, Norway, Iceland, USA, Brazil, China, Moscow, India, Thailand and Chile. As at 1 February 2016, Benchmark employs 826 people.

For further information on Benchmark please visit www.benchmarkplc.com

Chairman's Statement

Undoubtedly the most significant change in the group took place subsequent to the year end with the completion of the acquisition of INVE Aquaculture in December 2015. INVE is a leading specialist manufacturer of primary stage, technically advanced nutrition and health products for the aquaculture industry. This acquisition is transformative for the group, redefining its size and scale - following the acquisition, headcount, revenues and net assets are more than doubled, and the enlarged group will now serve customers and markets in more than 70 countries worldwide.

The INVE acquisition, which was funded through a combination of new equity and debt facilities, cost a total of $342m (c.£227m) and is expected to enhance earnings during the first full year post completion. In view of the size of the acquisition relative to the company, it was classified as a reverse takeover under the AIM Rules and therefore required the approval of shareholders and the readmission of the enlarged share capital to trading on AIM. This acquisition creates the fifth and final 'cog' of the divisional 'gearbox' with the formation of the Advanced Animal Nutrition division.

2015 has also seen continued investment in the four key areas identified when the Company was admitted to AIM: high-quality scientific R&D; growing a strong business development team; attracting the highest calibre people; and expansion into existing and new business sectors through targeted M&A. The group grew from three to four trading divisions with the formation of the Breeding and Genetics division, and expenditure on R&D increased two and a half fold in the year as the product pipeline further progressed using the new technologies and manufacturing processes acquired in 2014. Headcount increased from 222 to 402 in the year, and to 826 post year end, resulting from a combination of the acquisition activity and recruitment of further key skills into the Benchmark team.

The year wasn't without challenge, and as highlighted in the interim statement in June, we experienced market turbulence in Chile with the introduction of generic products competing with our leading sea lice treatment product (Byelice / Salmosan®) significantly affecting sales in the first half of the year. This challenge was resisted in the second half by strengthening our customer relationships in those markets through a combination of focused client service and refreshed volume supply contracts.

We continue to closely monitor the threat of generic competition to our animal health products which has highlighted the strategic need for the group to create a more varied portfolio of income streams.

Targeted acquisitions have played a vital role in delivering our growth strategy and have enabled us to work towards greater diversification of our revenue streams. I am pleased to report the successful completion of seven strategic additions to the group during the year, including the formation of Benchmark Breeding and Genetics division with the double acquisition in December 2014 of Stofnfiskur and SalmoBreed in Iceland and Norway respectively. We completed a secondary equity raise to finance these acquisitions with gross proceeds of £70m. The group's Technical Publishing division has also undergone significant transformation in the year following the acquisition of Improve International Group in January 2015, and Ascomber in April 2015. I have been pleased with the integration of all of the acquired businesses into the group, which generally are performing well against their targets.

The acquisition of TomAlgae in February 2015, which is developing an innovative shrimp feed, was the group's first move into advanced animal nutrition, and following the purchase of INVE, TomAlgae will form part of the new fifth division.

The Sustainability Science division has undertaken a restructuring exercise to tighten management organisation and leverage resources across the Group. We are starting to see progress in areas like the integration of trials and R&D programmes with the Animal Health division and with the Breeding and Genetics division with salmon, cleaner fish and tilapia projects using our facilities in Scotland and Brazil.

In the Animal Health division work has progressed well on Benchmark Vaccines' ultra-modern vaccine production facility in Braintree which will transform our manufacturing capability, providing both increased capacity and the ability to manufacture a range of conventional and recombinant vaccines as well as new technology based vaccines, including Virus Like Particles (VLP). Our pipeline of 61 products currently in development with a total addressable market of estimated £646m is generally progressing well.

The Group remains committed to investing significant resources to secure the long term trading prospects for the business and, as well as selective in-fill acquisition activity, we will continue to invest significantly in the new product pipeline over the next few years whilst ensuring that the revenue producing divisions are prudently managed so as to achieve their targets.

Results

The adverse impact of the generic competition to our Salmosan® product line in Chile led to like for like sales (excluding acquisitions in 2015) for the Group being down on 2014 by 17%. The reduction in Salmosan® sales was more than offset by revenues from new acquisitions and total Group revenue for the period increased by 26% to £44.2m (2014: £35.4m). This demonstrates the progress made in the Group's important strategy to diversify away from the historic reliance on Salmosan®.

The Group's earnings are set out in the Consolidated Income Statement. The Group made an operating loss of £11.6m (2014: operating loss £1.2m) reflecting an increase in Operating costs of Trading Activities to £13.7m (2014: £8.3m) with the completion of the programme to invest in people post IPO and the new acquisitions noted above. There was also a large increase in operating costs of Investing Activities to £9.7m (2014: £6.4m) which includes a 250% increase in R&D expense and a significant increase in acquisition-related expenses arising from the M&A activity undertaken throughout the year.

EBITDA from Trading Activities (the full reported numbers excluding the costs relating to Investing Activities) fell to £2.4m (2014: £6.6m), due to the increase in operating expenses as noted above.

At the year end the group was ungeared and had net cash of £13.6m (2014: £16.5m). Since then the group has arranged revolving credit facilities of $70m jointly with RaboBank and HSBC. $55m of this facility was drawn for the acquisition of INVE in December 2015 and the remainder is available for expansion in working capital.

Outlook

Our Breeding and Genetics division has seen a subdued start to the year, due to the temporary closure of the Chilean border to imports of salmon eggs from Iceland (as announced on 6 November 2015) remaining in place for longer than anticipated. The Chilean National Fisheries and Aquaculture Service (Sernapesca) has now announced that its risk assessment has been completed, and that it expects to reopen the Chilean border to imports of salmon eggs from StofnFiskur by 25 February 2016. In response, StofnFiskur has stepped up its marketing efforts in Chile.

The Group's other divisions, including the new Advanced Animal Nutrition division, have made an encouraging start to the year. The integration of INVE Aquaculture is well underway and proceeding as planned. The global aquaculture market continues to grow strongly, and Benchmark is better positioned than ever to take advantage of this growth.

THE HON. ALEXANDER HAMBRO

CHAIRMAN

1 FEBRUARY 2016

Chief Executive's Statement

In summary

2015 has been a year of transformational growth for Benchmark. We are delivering against the strategy first set out at IPO, and have been making significant investment in our infrastructure and technological capabilities across the business to create the solid foundations we need to realise our vision and stay ahead of the curve in our fast-paced markets.

Our people remain our key resource and we continue to invest in them, preparing us for the next phase of growth and maximising the immediate opportunities available to us. We have recruited some world-class industry professionals during 2015, significantly increasing our headcount across the group as it has grown, but we remain agile with the creativity, energy and appetite to take market opportunities as they arise.

Group highlights

Breeding & Genetics

The formation of Benchmark Breeding and Genetics following the acquisitions in December 2014 of two world-leading salmon breeding companies - StofnFiskur and SalmoBreed - gave us an immediate international presence within the global aquaculture breeding sector. This is a position we have strengthened and diversified throughout the year through the addition of two leading aquaculture breeding and genetics companies, Norway-based Akvaforsk and USA-based Spring Genetics. These supplementary acquisitions support a strategic move into the fast-growing tilapia sector, which has seen global production increase 11 per cent annually over the past decade, making it the world's second most farmed fish. They are also indicative of our wider group strategy of ensuring diversified revenue streams, offering expertise in an increased variety of species whilst utilising the technological synergies available from other areas within Benchmark.

The new Breeding and Genetics division has integrated well and delivered its planned growth in its first year under Benchmark's ownership, despite strongly adverse currency headwinds in its major market in Norway.

Animal Health

The development of the HypoCat cat allergy vaccine is advancing and remains on target for commercial release in 2018. We have also made substantial progress with the new technologies behind the development of HypoCat, including the further development of the manufacturing process for the Virus Like Particle (VLP) technology and the building of our new antigen manufacturing suite, which is on schedule for delivery in the first half of 2016. This is an important step forward in increasing our capacity, allowing us to manufacture a range of conventional and recombinant vaccines as well as new technology based vaccines, including VLPs. Our pipeline of products has also continued to progress, with the number of products currently in development increased from 47 to 61.

Technical Publishing

This financial year was our most effective for the Technical Publishing division as its revenues grew both organically and through targeted acquisition, turning into profit for the first time. The acquisition and integration of two leading business in UK aquaculture and veterinary education effectively tripled the size of the division and allowed for greater penetration into different geographies, providing a stronger platform for knowledge transfer across Benchmark and our global markets.

Sustainability Science

A significant restructuring which tightened the management of our Sustainability Science division, coupled with a global shift in the way companies recognise and engage with building sustainability into their business, have resulted in improved prospects for the division. We are starting to see the growth in areas where we have made investments over the previous two years, allowing the integration of trials and R&D programmes with the Animal Health division. We are extending this work to integrate in a similar way with our breeding division with salmon, cleaner fish and tilapia on our farms in Scotland and Brazil.

Targeted Acquisition Strategy

Our acquisition strategy is focused on building our capabilities, broadening and deepening our scientific expertise, and securing our routes to market. Acquisitions have played an important role in our growth strategy this year, with seven additions to the Group during the period. In addition to SalmoBreed and StofnFiskur these include:

· Akvaforsk Genetics - world leaders in aquaculture genetics services and research

· Spring Genetics - leading tilapia primary breeding company

· Improve International - leading independent veterinary training and CPD provider

· TomAlgae - innovator and global leader in freeze dried algal primary feed

· Ascomber - technical conferences and exhibitions

Independently, these all have a strong fit with Benchmark and have each been successfully integrated bringing new technologies, expertise, revenue and profit streams. More importantly however, these acquisitions have been a case of the whole being greater than the sum of its parts - they not only take us into new segments of our core markets and open up new opportunities for further business development but add compound value to each other.

Our most recent acquisition, completed post year-end, is our largest to date, is transformational and so it has been included here for clarity. In December 2015 we secured the purchase of INVE Aquaculture, a leading international specialist manufacturer of primary stage technically advanced nutrition and health products for shrimp and marine finfish, for a total consideration of $342 million, of which $300m was payable in cash and $42m payable in Benchmark shares. This was financed from the placing of new shares to new and existing institutions raising approximately £185.7m with the rest being satisfied under new debt facilities provided by RaboBank and HSBC. The acquisition of INVE made us a global leader in the aquaculture technology market overnight and there are many opportunities for the development of productive synergies between the Benchmark companies and INVE. It allows us to enter the shrimp market, a rapidly growing subsector of aquaculture and creates the fifth pillar of Benchmark's divisional structure - the newly formed Advanced Animal Nutrition division.

Challenges

The entry of a low-grade generic to our leading sealice product, Salmosan/Bylice in Chile, signalled an important challenge early in 2015 initially causing a significant reduction in market share. This has been addressed through the strengthening of our team on the ground and building stronger relationships with customers through enhanced technical service and loyalty schemes. We have also seen challenges to our Breeding and Genetics division through the sharp decline in value of the Norwegian Krone, which fell by circa 20% from the completion of the acquisition to the financial year end. Despite this, our team were successful in meeting our market targets set for the Breeding and Genetics division.

Our people

The continuation of the building of the team at Benchmark has been a rewarding challenge throughout the year. Striving to find the right person for the job, as well as someone who is the right fit for our culture is key factor in our long-term growth and success. This strategy is working, and we have in 2015 secured high calibre appointments across the business to ensure we have the management capability we need to deliver our business goals now and in the future. It is also important to note that we share a common ethos with those companies we have acquired, as integrating the acquisitions throughout the year has been smooth not only with regards to financial targets and structures, but also in the corporate culture which governs everything we do. Benchmark has grown from 124 employees in 2012 to 826 following the acquisition of INVE, and yet our unity of purpose remains the same.

Looking forward

The market opportunity is growing and is now better than ever; our business is set to grow for the long term. Our markets continue to maintain strong growth and there is an unprecedented need for the technology we provide. We increasingly have the skills and resources, which, when coupled with our appetite to innovate where technology does not yet exist, mean we can move fast to develop solutions. In addition to creating and applying knowledge, we believe in sharing it so that we can help our customers around the world get the best from the available technology and from the innovative products and services we are delivering. In order to do this we have created a unique business that is bringing together the key disciplines that harness the fundamental biology that defines success for our customers.

Last year was one of investment and building the foundations for growth a strategy which is now coming to fruition and will continue to be seen in the accelerating growth and performance of the company over the coming years. Benchmark is now strongly positioned with a unique business opportunity in one of the most important and exciting international business arenas - the food chain. The development of sustainable living and our special focus on aquaculture and global leadership in the technology it needs has created a major opportunity for Benchmark in the future, one which we intent to capitalise on.

Chief Financial Officer Statement

During the 2015 financial year the Group delivered a satisfactory result whilst managing challenging trading conditions for Salmosan® in Chile and also successfully integrating seven acquisitions.

The temporary loss of Salmosan® market share in Chile around the mid-year point, coupled with 2014 sales that were above normalised levels due to new market launches, resulted in a reduction in Animal Health revenue versus the prior year.

The most notable acquisitions were the four that formed the new multi-species Breeding and Genetics division and the purchase of Improve International that helped the Technical Publishing division to move into profit during the year at EBITDA level. In addition, the purchase of TomAlgae marked the Group's first entry into advanced animal nutrition. All of the acquired businesses have been integrated on time with minimal disruption and are generally performing well against their targets.

Sales of aquaculture breeding products and services became the Group's largest revenue generator and the resultant diversification of sales and profit streams is an important step in the development of Benchmark.

Operating costs increased in 2015 with the completion of the post IPO investment in people and associated infrastructure, and a more than doubling in R&D spend which resulted in good progress with the new product pipeline.

Group results

Group turnover increased by 25% to £44.2m in the year (2014: £35.4m) despite the adverse impact of generic competition to our Salmosan® product line. Revenues from the Animal Health division fell in the year by 36% to £21.1m. This was principally due to the reduction in Salmosan® sales in Chile which resulted from a combination of strong launch year (2014 comparative) sales and generic competition in 2015. It was noted in our interim statement in June 2015 that Salmosan® is a mature product which is off-patent, and the Company took immediate action in response to the increased competition by altering the sales strategy to reward customer loyalty. New volume supply contracts were secured with a number of major customers and sales were stabilised in the second half of the year.

The growth in turnover was achieved through the successful acquisition and integration into the Group of SalmoBreed AS and StofnFiskur HF which together formed the basis for the new Benchmark Breeding and Genetics division, and of Improve International Limited which was combined into the Technical Publishing division. The Breeding and Genetics division was further expanded in July 2015 with the acquisition of Akvaforsk and Spring Genetics. These acquisitions have performed strongly in the year, and this acquisitive growth has allowed the Group to work successfully towards its aim of diversifying its operations away from its previous reliance on sales of Salmosan®. The newly formed Breeding and Genetics division contributed revenues of £15.9m in the year, while the Improve International Group contributed a further £3.8m. The Sustainability Science division performed in line with the previous year, with revenues of £3.1m (2014: £3.1m).

The Group made an operating loss of £11.6m in the year (2014: operating loss £1.2m) due to a combination of reduced sales and margin in the Animal Health division as noted above, and a higher level of expenditure in Investing Activities in the year which, including amortisation of R&D related intangibles, was up 57% to £10.1m (2014: £6.4m). This was offset by the contributions from the new acquisitions, with the Breeding and Genetics division producing an operating profit of £3.1m and the Technical Publishing division returning an operating loss of £0.3m (2014: operating loss £0.5m).

As in previous years, the Group has chosen to subdivide its reported figures in the financial statements into 'Trading Activities' and 'Investing Activities' in order to better present the performance of its business. Trading Activities are those operations which generate earnings in the current period, and Investing Activities are those activities which have no associated income stream in the current period, but which are intended to provide the Group with income generating operations in the future, for example, investment in pipeline products like HypoCat in the Animal Health Division. Both activities are vital to the continued and future success of the Group.

Trading Activities

Gross profit of £16.1m was up on the previous year (2014: £14.8m). This was driven by the strongly performing acquisitions, with the Breeding and Genetics division producing gross profit of £6.0m and the Technical Publishing division £2.3m (2014: £0.4m). The reduction in sales of Salmosan® against the prior year, contributed to gross profit in the Animal Health division falling to £6.6m (2014: £14.4m). Overall gross profit percentage fell to 36% (from 42% in 2014) due to the change in sales mix towards the acquired businesses.

Operating costs from Trading Activities increased to £13.7m (2014: £8.3m) reflecting the increased size of the Group. Headcount increased from 222 at the start of the period to 402 through the seven acquisitions and further strengthening of the Benchmark team. The skills brought into the Group through the new headcount shows our commitment to investing in the development of our high-calibre team and thus ensures that we have the capability to deliver our growth strategy.

Operating costs for the new Breeding and Genetics division were £1.3m and for the Improve International Group were £1.6m in their respective periods since acquisition.

Although turnover in the Animal Health division fell from the lost Salmosan® sales in the first half of the year, the operating costs increased to £4.4m (2014: £4.0m) due to the expansion of Fish Vet Group's diagnostics services with the launch of new laboratories in Norway and Thailand.

The operating costs at Corporate level have increased from £2.2m in 2014 to £4.9m in the current year. This increase reflects: the full year impact of the significant post IPO headcount increase in 2014 together with a more moderate increase in 2015; increases in Directors' remuneration to market levels; increased travel related to business development and M&A activity; the full year impact of operating costs specifically related to being a public company (2015: £0.40m (2014: £0.25m)); and continued higher spend on strategic marketing and legal & professional advice to provide enhanced protection for the intellectual property in the Group's products and services.

As a result of the above factors EBITDA from Trading Activities of £2.4m was down on the previous year (2014: £6.6m).

Depreciation and amortisation at £4.4m in the year (2014: £1.4m) was higher than in previous years due to the significant increase in tangible and intangible fixed assets balances following the increased investment in the year, primarily from the acquisition of the Breeding and Genetics division.

Investing Activities

R&D expenditure, one of the Group's key investment objectives, is classed as an Investing Activity as it is undertaken to provide growth in future income streams. Expenditure has continued to increase significantly in the year as the Group executes its strategy of investing in high-quality scientific research and development. The acquisition of the Breeding and Genetics division further demonstrates this, with these businesses pursuing their own research and development programmes (£1.4m in the period since acquisition). The bulk of the remaining increase was in line with expectations as noted in last year's annual report, and related to the development of the team focusing on the delivery of the Animal Health product pipeline following the acquisitions made in that area in 2014, and the continued collaboration with HypoPet to bring to market a breakthrough cat allergy vaccine.

Pre-operational expenses in the early part of the year related to the final costs of setting up the laboratory facilities in Norway and Thailand, and later in the year, related to setting up laboratory facilities in Chile and Brazil. Further, the results of the FAI Aquaculture business, which has been the subject of substantial investment in state-of-the-art marine research and testing facilities, have been reclassified as preoperational in 2015 as the trade previously carried on by the business was disrupted and put on hold while the new facilities are built and commissioned. We expect all of these facilities to become operational in 2016.

Significant acquisition related costs were incurred in the year in respect of the acquisition of the new Breeding and Genetics division, which involved an equity raise of £70m, and also the costs associated with the other acquisitions of Improve International Group and TomAlgae. The timing of the completion of the acquisition of SalmoBreed compared to the date when Benchmark actually took control caused an exceptional foreign exchange gain of £1.6m to be incurred which reduced the acquisition related costs of £2.9m to £1.3m. These acquisitions were much larger than those in the previous year, incurring respectively higher level of costs.

Exceptional non-recurring costs in the year of £0.2m related predominantly to a restructure at FAI Farms and were greatly reduced from 2014 when costs were incurred in relation to the IPO.

Finance costs

Net finance income of £0.2m has been earned in the year (2014: cost £0.2m) as the Group has had no bank borrowings throughout the year following their repayment in 2014.

Taxation

The Group incurred a tax charge for its UK and overseas operations of £0.4m in the period (2014: tax credit of £0.1m). The charge relates primarily to a corporation tax charge on overseas profits (£0.9m) against which the Group's losses cannot be relieved. This is offset by a deferred tax credit of £0.5m from a combination of the use of brought forward trading losses and some small deferred tax assets recognised on temporary timing differences expected to reverse in the short-term. The Group has adopted a prudent stance on the recognition of deferred tax assets on trading losses, and deferred tax of £2.9m has not been recognised on losses.

Earnings per share

Basic loss and diluted loss per share were both -5.96p (2014: loss per share -1.04p). The movement year on year is due to a combination of the result for the year as noted above, and the issue of 82m new shares in the equity raise used to fund the acquisition of StofnFiskur and SalmoBreed in December 2014. Loss per Share from Trading Activities was -1.13p (2014: earnings per share 3.29p) with the movement again due to the result and the dilutive effect of the higher number of shares in issue.

Dividends

The Company has paid no dividends during the year (2014: 0.2p per share) and the Board does not recommend payment of a final dividend in respect of the year ended 30 September 2015.

Balance sheet

Group net assets increased in the year to £92.1m (2014: £37.3m), with the main increase arising from a secondary equity raise in December 2014 used in part to fund the StofnFiskur and SalmoBreed businesses. The remainder of the funds have been utilised on the significant investment made in the year in additions to fixed assets and on the new acquisitions. Fixed asset additions of £13.0m includes £9.0m on the new vaccine manufacturing facility at Braintree which should be completed in Spring 2016 and £2.0m on the new state of the art trials unit at Ardtoe. Note 11 outlines the fair value of the assets and liabilities acquired in the acquisitions made during the year. These include separately identifiable intangible assets of £36.3m relating to the accumulated genetic information in the newly acquired Breeding and Genetics division (£22.1m), intellectual property in the Improve International and TomAlgae businesses (£3.0m), and contracts, licences and customer lists (£11.2m). Deferred tax liabilities totalling £9.0m were provided for the tax timing differences on these intangible assets. Goodwill of £27.8m arose on the acquisitions. A new equity raise took place in December 2014, which brought in gross funds of £70m, with equity raising costs of £2.1m netted off the share premium account.

Cash flow

The group ended the year with cash balances of £13.6m (2014: £16.5m). Of the total cash outflow in the year of £2.9m, £9.0m outflow related to cashflow used in operations and £61.4m was expended on investing activities relating to the purchase of the businesses acquired in the year (£47.6m net of cash acquired with the acquisitions) and additions to fixed assets (£14.0m) mainly relating to the new vaccine manufacturing facility at Braintree and the trials unit at Ardtoe. These outflows were funded by a net cash inflow from funding activities of £67.4m, with £67.9m net of costs received from the equity raise in December 2014 noted above.

Treasury

The Group has established procedures to mitigate financial risk to ensure sufficient liquidity is available to meet foreseeable requirements. These ensure that finance is secured at minimum cost where required and that cash assets are invested securely and profitably. The finance function manages the Group's foreign exchange, liquidity and funding, interest rate and credit risks within a framework of policies and guidelines authorised by the Board. The Group uses simple derivative financial instruments for risk management purposes only. Group policy prohibits speculative arrangements. Transactions in financial instruments are always matched to an underlying business requirement, such as expected foreign currency revenues and payments. The Group uses derivatives only to manage its foreign currency and interest rate risks arising from underlying business activities. No such derivatives were outstanding at the year-end. Treasury activities are reported to the Board on a monthly basis within the Group management accounts.

Foreign exchange risk

The Group's reporting currency is pounds sterling. Where Group entities operate with a different functional currency, the Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency. Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group. Where significant transactions are conducted in currencies other than the functional currencies of the individual entities, exposure to movements in exchange rate is mitigated by the use of simple financial derivative instruments as appropriate.

Liquidity and funding

The Group's finance function is responsible for sourcing and structuring borrowing requirements. The Group had no bank borrowings throughout the year, and as part of the acquisition of INVE subsequent to the year-end (see below), the Group has refinanced, and obtained a revolving credit facility of up to £46m, leaving sufficient funding facilities to meet its normal funding requirements in the medium term.

Interest rate management

Controls over interest rate exposures are in place and dealings are restricted to those banks with the necessary combination of geographic presence and suitable credit rating. As at 30 September 2015, the Group had no bank loans.

Credit risk

The policy followed in managing credit risk permits only minimal exposures, with any surplus funds invested mainly in short-term deposits with financial institutions that meet credit criteria approved by the Board. Specifically, counterparty creditworthiness is determined by reference to credit ratings as defined by the global rating agencies: Fitch, Standard & Poor's and Moody's.

Transformational acquisition post 30 September 2015

On 30 December 2015 the Group completed the acquisition of INVE Aquaculture Holding B.V. ("INVE"), a leading specialist manufacturer of primary stage technically advanced nutrition and health products for aquaculture, for a total consideration of $342m (approximately £227m). Of the headline consideration, $300m (approximately £199m) was paid in cash and $42m (approximately £28m) was satisfied through the issue of consideration shares. Following the acquisition, which is expected to be earnings enhancing in the first full financial year post-completion, INVE management joined the enlarged Group and invested in Benchmark shares.

The cash consideration was financed by a placing of 215,922,141 new Benchmark shares to new and existing institutional investors raising approximately £185.7m. The balance was satisfied with debt funding drawn under new debt facilities provided by HSBC Bank plc and Rabobank (Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.).

In view of the size of the acquisition relative to the Company, the transaction was classified as a reverse takeover under the AIM Rules and therefore required the approval of shareholders and the readmission of the enlarged share capital to trading on AIM. This approval was received at a General Meeting on 29 December 2015 and the admission to AIM and completion of the acquisition took place on 30 December 2015.

This acquisition is transformational for the Benchmark Group as it results in a more than doubling of total revenue, headcount and net assets. The enlarged Group will serve customers in more than 70 countries across six continents.

INVE reported revenue of £54.0m in the year ended 31 December 2014 with operating profits of £14.4m and total assets of £39m.

1 Before items described in footnote 2 below

2 Includes exceptional items (outlined in note 4), research and development expenditure, pre-operational expenses for new ventures and costs of acquiring new businesses.

1 Before items described in footnote 2 below.

2 Includes exceptional items (outlined in note 4), research and development expenditure, pre-operational expenses for new ventures and costs of acquiring new businesses.

* The share based payment reserve, which was included within other reserves in the prior year, has been included within retained earnings in the current year and the comparatives adjusted accordingly. At 30 September 2014, the share based payment reserve for the Group was £1,106,000.

1. Basis of preparation

The results for the year ended 30 September 2015, including comparative financial information, have been prepared in accordance with International Financial Reporting Standards ("IFRS"), and their interpretations adopted by the European Union.

Benchmark Holdings plc ("the Company") has adopted all IFRS in issue and effective for the year. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS in February 2016.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 September 2015 or 2014, but is derived from those accounts. Statutory accounts for 2014 have been delivered to the Registrar of Companies. The auditors have reported on those accounts: their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498 (2) or (3) of the Companies Act 2006. The accounts for 2015 will be delivered following the Company's AGM.

The financial information presented in respect of the year ended 30 September 2015 has been prepared on a basis consistent with that presented in the annual report for the year ended 30 September 2014.

2. Accounting policies

The accounting policies adopted are consistent with those of the financial year ended 30 September 2014.

The Group has acquired businesses during the period whose accounting policies were not included in the accounts for the financial year ended 30 September 2014. The accounting policies for these new entities are consistent with those already applied for the existing group, with the addition of the following:

Biological assets

Biological assets comprise two asset types: livestock, and fish and fish eggs.

Livestock is measured at fair value less costs to sell. The fair value of livestock is based on quoted prices of livestock and adjusted for age, breed, and genetic merit in the principal (or most advantageous) market for the livestock, and therefore is categorised within level 2 of the fair value hierarchy set out in IFRS 13.

Fish and fish eggs are, in accordance with IAS 41 'Agriculture', measured at fair value, unless the fair value cannot be measured reliably. The principal components of fish and fish eggs within the business are:

· Salmon Broodstock

· Salmon fingerlings

· Salmon eggs

· Lumpfish eggs and fingerlings

Trading Activities and Investing Activities are disclosed and described separately in the interim financial information where it is necessary to do so to provide further understanding of the financial performance of the Group.

As a result of business combinations outlined in note 11, the Group has acquired new intangibles during the period which have been capitalised within intangible fixed assets. The accounting policy in respect of licences has been updated in the financial statements for the year ending 30 September 2015 to reflect the differing asset lives of these newly acquired licences. Following these acquisitions, the significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost of intangibles acquired in a business combination are as follows:

Deferred and contingent consideration for these acquisitions is recognised at fair value with movements recognised in the consolidated income statement.

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 as follows:

· Animal Health Division - provides veterinary services, environmental services, diagnostics and animal health products to global aquaculture and agriculture, and manufactures licenced veterinary vaccines and vaccine components;

· Sustainability Science Division - provides sustainable food production consultancy, technical consultancy and assurance services.

· Technical Publishing Division - promotes sustainable food production and ethics through online news and technical publications for the international agriculture and food processing sectors and through delivery of training courses to the industries.

· Breeding and Genetics Division - Harnesses industry leading salmon breeding technologies combined with state-of-the-art production facilities to provide a year-round range of high genetic merit ova.

· Corporate - The corporate segment represents profits earned by each segment without allocation of certain central costs. The corporate segment assets and liabilities comprise investments in subsidiaries, cash, other receivables and payables, and financial liabilities fair value through profit and loss.

Measurement of operating segment profit or loss

The Group separates its operations into Trading Activities and Investing Activities to report segmental performance. These measures are used by management for planning and reporting purposes. These measures are not defined in International Financial Reporting Standards and may not be comparable with similarly described measures used by other companies. Trading and Investing Activities are described further in note 10.

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.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities and loans and borrowings unless directly related to individual segment.

4. Exceptional 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.

On 18 December 2013 Benchmark Holdings plc was admitted to trading on AIM, with significant non-recurring costs being incurred as a result. £24,000 of these costs fell due in 2015.

Restructuring costs of £136,000 (2014: £nil) were incurred on the re-organisation of the FAI Farms business during the year.

5. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Diluted earnings 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 since admission to AIM) based on the monetary value of the subscription rights attached to outstanding 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 as follows: