Benchmark Holdings Regulatory News (BMK)

29 April 2015

Benchmark Holdings plc

("Benchmark" or the "Company")

Trading Update and Notice of Results

Trading Update

Benchmark Holdings PLC, the international aquaculture breeding, animal health, technical publishing and sustainability science business, issues the following trading update for the half year ended 31 March 2015.

Overall, the Company continues to make good progress with its strategy and it is successfully integrating the businesses it has acquired to form a new Breeding and Genetics division. It has however become clear that the competitive pressure in the market for our Salmosan product, a core part of our Animal Health division, has intensified. As a result, the Company is providing guidance that it expects revenue and profits to be significantly below market expectations for the full year.

Animal Health

The Animal Health division is experiencing materially lower than projected Salmosan sales in its key markets, most notably in Chile and to a lesser extent in Norway, as a result of the introduction of generic products and their more rapid than expected initial uptake. As previously reported, Salmosan (sold as Byelice in Chile) is a mature product, which is off-patent, and whilst sales had been expected to decrease over time with the introduction of generics into the market, until recently we had not seen a material effect. The Company has taken immediate action in response to the increased generic competition. 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. We are confident that the Company has now recovered its market leadership position in both Norway and Chile. Whilst the Company has already begun to see a recovery in sales of Salmosan through its new marketing initiatives, and recovered its leadership position, the decline experienced in the second quarter is expected to materially impact EBITDA and underlying earnings per share for the full year.

The Company's 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. Work on the pipeline products and technologies is accelerating as we continue to integrate the necessary expertise and resources to exploit the pipeline's full potential. Two late stage development products targeted 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.

Breeding and Genetics

The Breeding and Genetics division is performing strongly, with results in line with expectations despite sharply adverse currency conditions affecting the Norwegian Krone. The management teams of SalmoBreed and Stofnfiskur are working in close cooperation 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.

Technical Publishing

The Technical Publishing division is 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.

Outlook

Despite sales of sea lice products being impacted, 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.

Notice of Results

Benchmark will announce its interim results for the six months to 31 March 2015 on Tuesday, 23 June 2015.

Benchmark's Chief Executive Officer, Malcolm Pye, 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."

Notes to Editors:

Founded in 2000, Benchmark represents a new model in sustainable business development based on applied biotechnology. Over the last decade it has built a successful 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, and in particular for seafood, from both mature and emerging markets.

The Group has four divisions: Animal Health which researches, manufactures and markets medicines and vaccines particularly for aquaculture; Sustainability Science which researches and informs sustainable development in the food industry, Technical Publishing which effects technology transfer through online publishing and education, and Animal Breeding and Genetics which is the second largest supplier of salmon eggs and genetic expertise in the world. Benchmark operates internationally with offices in the UK, Ireland, Norway, USA, Brazil, China, Russia, Iceland, Thailand, Belgium, Chile, Spain, Germany, Portugal and Australia and, as at 29 April 2015, employs 335 people. 

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.

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