TIDMBMK
RNS Number : 7389G
Benchmark Holdings PLC
27 November 2020
27 November 2020
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")
Full Year Results for the Financial Year ended 30 September
2020
A year of transformation and achievements
Benchmark, the aquaculture biotechnology Company, announces its
audited full year results for the year ended 30 September 2020 (the
"period").
GBPm FY20 FY2019
Restated*
-------------------------------------------- ------- -----------
Statutory
-------------------------------------------- ------- -----------
Revenue from continuing operations 105.6 124.0
-------------------------------------------- ------- -----------
Loss before tax from continuing operations (22.6) (58.5)
-------------------------------------------- ------- -----------
Loss from continuing operations (22.8) (59.1)
-------------------------------------------- ------- -----------
Loss - total incl. discontinued operations (31.9) (83.1)
-------------------------------------------- ------- -----------
Basic loss per share (p) (5.26) (15.03)
-------------------------------------------- ------- -----------
Net debt(3) (37.6) (87.1)
-------------------------------------------- ------- -----------
Adjusted
-------------------------------------------- ------- -----------
Adjusted EBITDA(2) from continuing
operations 14.5 21.3
-------------------------------------------- ------- -----------
Adjusted operating profit from continuing
operations 7.9 16.3
-------------------------------------------- ------- -----------
Exceptional items (2.1) (0.6)
-------------------------------------------- ------- -----------
EBITDA(1) from continuing operations 12.4 20.8
-------------------------------------------- ------- -----------
Divisional summary (Continuing operations)
GBPm Revenues Adjusted EBITDA(2)
-------------------- ------------------- ---------------------
FY20 FY 2019 FY20 FY 2019
-------------------- ------- ---------- -------- -----------
Advanced Nutrition 59.4 76.4 6.4 16.0
-------------------- ------- ---------- -------- -----------
Genetics 41.5 39.7 14.4 10.1
-------------------- ------- ---------- -------- -----------
Health 5.2 8.7 (3.7) (2.1)
-------------------- ------- ---------- -------- -----------
(1) EBITDA is earnings/(loss) before interest, tax, depreciation
and amortisation and impairment.
(2) Adjusted EBITDA is EBITDA(1) , before exceptional items and
acquisition related expenditure.
(3) Net debt is cash and cash equivalents less loans and
borrowings. Net debt includes GBP9. 6 m (2019: GBPnil) relating to
lease obligations which are now held on balance sheet following the
adoption of IFRS 16.
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Overview
-- Restructuring complete and strong financial position achieved
-- Operational resilience to Covid-19
-- Strong performance in Genetics; trading in Advanced Nutrition
impacted by weak shrimp markets
-- Good progress towards commercialisation of BMK08 + CleanTreat(R) and SPR Shrimp
Financial Highlights
-- Strengthened financial position:
o Programme of disposals of non-core businesses completed
delivering up to GBP44m; GBP43m gross equity raised in February
2020 through a placing and open offer
o Liquidity (cash and available facility) increased to GBP83.2m
(2019: GBP28.2m). Cash at year end of GBP71.6m (2019: GBP16.1m)
o Net debt reduced significantly to GBP37.6m (2019:
GBP87.1m)
-- Revenues from continuing operations 15% below the prior year resulting from:
o Good performance in Genetics with revenues 5% above the prior
year (+14% in constant currency)
o In Advanced Nutrition revenues down 22% due to the impact of
Covid-19 on global shrimp markets and a supply imbalance in the
Artemia markets
o Lower revenues in Health than Q4 2019 which benefitted from
revenues related to BMK08 trials
-- Adjusted EBITDA from continuing operations was GBP14.5m
against GBP21.3m the prior year reflecting lower revenues and
margins in Advanced Nutrition, partially offset by Genetics and a
reduction in R&D and operating costs from measures taken to
mitigate the impact of Covid-19
Market environment
-- The salmon industry has been relatively resilient to Covid-19
and our salmon genetics business has been resilient to recent
short-term volatility in the salmon market
-- The shrimp market continues to be challenging as a result of Covid-19
Operational Highlights
-- BMK08 and CleanTreat(R): Positive MRL Opinion and
construction of second CleanTreat(R) unit; on track for commercial
launch in Q2CY 2020
-- Salmon genetics: Continuing ramp-up of Salten facility; first
year supplying salmon eggs year round
-- Shrimp genetics: First test market sales of SPR broodstock
shrimp; progress in construction of a multiplication centre in
Thailand
-- Advanced Nutrition: Successful launch of improved SEP-Art
tools, a proprietary sustainable Artemia technology
Current trading and outlook
-- Unchanged market conditions; revenues in established business
driven by underlying markets with upside from the launch of new
products
-- Ongoing investment in SPR shrimp, new salmon egg facility in
Chile, and launch of BMK08 and CleanTreat(R)
-- Continued focus on achieving profitability and cash
generation; commitment to maintain financially strong balance sheet
aligning pace of investment to cash generation
Peter George, Chairman, commented:
"2020 was a transformational year for Benchmark. With the
restructuring complete, we now have a streamlined Group focused on
the three core aquaculture areas of Genetics, Advanced Nutrition
and Health, each with substantial growth opportunities and
long-term positive drivers which give us
optimism for the future. Our focus remains on becoming a
profitable cash generative Group.
"Against a very challenging backdrop this year with Covid-19, I
am proud of the Group's resilience both operationally and
financially and this reflects well on the commitment and
contribution of Benchmark employees."
Trond Williksen, CEO, commented:
"2020 was characterised by the successful delivery of an
ambitious and necessary restructuring programme, and by our
response and resilience to the challenges brought by the Covid-19
pandemic.
"Our results reflect a mixed performance across our business
areas with a strong performance in Genetics offset by the effects
of the restructuring programme and the impact of Covid-19,
especially on the global shrimp markets.
"Moving into FY21, our focus is on becoming profitable and cash
generative. Following the restructuring we are well-positioned in
an exciting aquaculture industry, and we have significant potential
to be realised in the years to come."
Details of analyst / investor call today
There will be a call at 8:30am UK time today for analysts and
investors. To register for the call please contact MHP
Communications on +44 (0)20 3128 8990 / 8742, or by email on
benchmark@mhpc.com
Enquiries
Benchmark Holdings plc Tel: 020 3696 0630
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 8742
Katie Hunt, Reg Hoare, Alistair de Kare-Silver, benchmark@mhpc.com
Charlie Protheroe
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
Chairman's Statement
A year of transformation
2020 was a pivotal year for Benchmark. Following my appointment
as Executive Chairman in August 2019, the Group undertook a
comprehensive and ambitious restructuring programme which was
successful in refocusing the Group on its core aquaculture areas
and in achieving financial solidity, two critical steps towards our
goal of becoming sustainably profitable.
As part of our restructuring programme we divested non-core
assets, exited loss making activities, streamlined our executive
management and conducted a review of the Group's vaccine strategy
which resulted in the sale of our vaccine manufacturing facility to
Cell and Gene Therapy Catapult. In a period of 12 months we
completed nine disposals, exited or closed four business units, and
substantially streamlined our R&D pipeline, all while
responding to the challenges brought by Covid-19. I am pleased to
have secured strong buyers for each of the businesses we divested
which resulted in continuity of employment and positive prospects
for our employees.
The Group's restructuring called for a change of executive
management. Septima Maguire joined the Group as CFO in November
2019 and since joining has been instrumental in strengthening our
financial position, leading a GBP43m (gross) fundraising in
February 2020 which received broad shareholder support, and
executing our divestment programme which generated up to GBP44m in
cash. As a result, Benchmark is now in a financially strong
position with liquidity(2) of GBP83.2m at year end (FY19: GBP28.2m)
giving us resilience through the Covid-19 pandemic and the ability
to fund the launch of our sea lice solution BMK08 and
CleanTreat(R).
Later in the year, Trond Williksen joined Benchmark as CEO on 1
June 2020 bringing substantial industry and management expertise to
lead the Group through the next phase of its development and
growth. His involvement in Benchmark during the period leading to
his formal arrival made our handover quick and efficient. With
Trond and Septima and the rest of the senior management team I am
confident that we have strong leadership to develop Benchmark to
its full potential.
Covid-19 and our response
As is the case for most businesses around the world, Covid-19
brought unprecedented challenges to our industry and to Benchmark.
We operate in 23 countries around the world which have been
affected at different times and to various degrees as a result of
the pandemic. Against this backdrop and through the actions
outlined below I am pleased to say that the Group has shown
incredible resilience both operationally and financially and this
is the reflection of the commitment and contribution from each
employee at Benchmark.
We took early action to protect the health and wellbeing of our
staff through remote working by adapting shift patterns at
manufacturing sites worldwide and enhancing safety procedures to
reduce employee exposure, whilst maintaining service levels for our
customers through regular technical support webinars and online
content which will remain a feature of our service offering
post-Covid-19. We managed costs carefully, utilised furlough
schemes where appropriate and reduced working hours; our PLC Board
and the Operations Board voluntarily took a temporary 20% salary
cut.
As we announce these results, uncertainty around the development
of Covid-19 and the availability of an effective vaccine and
treatments remain high. This will continue to impact some of our
markets. We benefit from a diversified business across species and
geographies and we expect the salmon market to remain stable while
conditions in the shrimp market will continue to impact our
business until there is a sustained recovery.
Overview of performance
Group trading during the year was driven by a strong performance
in Genetics, with revenue growth and significantly higher margins,
offset by a weak result in Advanced Nutrition due to Covid-19
related adverse conditions in the shrimp markets and the ongoing
supply imbalance in Artemia. Our Health business area was impacted
by the significant restructuring and was primarily driven by sales
of our legacy sea lice treatment Salmosan(R) and continued
investment towards the launch of BMK08 and CleanTreat(R) in Q2
calendar year 2021.
Directorate Change
Post period end, on 17 November 2020 Hugo Wahnish announced his
intention to resign from the Board with effect from 9 February
2021. Hugo joined Benchmark in November 2017 bringing over 35 years
of experience in the animal health and pharmaceutical industry, and
played a significant role in this transformational period. On
behalf of the Board I would like to thank Hugo for his
contributions to Benchmark and wish him success in all his future
endeavours.
ESG and sustainability
ESG and sustainability continue to be at the core of our mission
both through the positive impact that our products have on the
sustainability of aquaculture production and through the way we
conduct our operations. This year we are reporting our greenhouse
gas emissions in compliance with Streamlined Energy and Carbon
Reporting (SECR) for the first time and are developing a plan to
reduce our emissions across all our operations.
Other notable areas of our ESG work in the year include the
development of environmental policies, the appointment of a Group
employee representative to our Operations Board and the enhancement
of our mental health support for employees. Our Group charitable
and volunteering programme conducted Covid-19 relief activities in
our local communities in Latin America and in Thailand.
Outlook
With the restructuring complete, we now have a streamlined Group
focused on three core aquaculture areas of Genetics, Advanced
Nutrition and Health, each with substantial growth opportunities
and long-term positive drivers which give us optimism for the
future. Our focus remains on becoming a profitable cash generative
Group.
I would like to thank our shareholders and other stakeholders
for their continued support through this pivotal period for our
business.
Peter George
Non-Executive Chairman
Chief Executive Officer's Review
2020 was characterised by the successful delivery of an
ambitious and necessary restructuring programme which streamlined
and refocused the Group, and by our response and resilience to the
challenges brought by the Covid-19 pandemic.
From a trading perspective, our results reflect a mixed
performance across our business areas. A strong performance in
Genetics was offset by the effects of undergoing restructuring and
the impact of Covid-19, especially on the global shrimp
markets.
Moving into FY21 it is time to shift our focus towards
developing the Group for the future. We are a well-positioned Group
in an exciting aquaculture industry, and we have significant
potential to be realised in the years to come.
Restructuring substantially complete
Entering into FY20 the Company set out a roadmap to achieve
profitability, the cornerstone of which was an ambitious
restructuring programme to streamline the Group and refocus the
business on its three core areas in aquaculture biotechnology:
Genetics, Advanced Nutrition and Health.
I am pleased that the restructuring is now complete. We have
sold or exited all our operations in Knowledge Services. We have
restructured our Health business including the divestment of our
veterinary and diagnostics business and of our vaccine
manufacturing facility as well as rationalised our product
pipeline. Our Genetics and Advanced Nutrition operations have been
kept intact and able to fulfil their potential.
The restructuring will deliver cash proceeds of up to GBP44m
from the divestments as well as annual savings of c.GBP10m, which
put the Company in a solid financial position. Looking forward to
FY21 our focus is on crystallising the benefits of a focused
organisation and on our renewed commercial aim of becoming a
sustainably profitable business.
Covid-19
Like for most businesses around the world, the Covid-19 pandemic
posed significant challenges for Benchmark. From the start, our
priorities have been to ensure employee safety, to maintain
continuity of supply and service levels for our customers and to
maintain financial solidity and resilience.
Through an early and proactive response tailored to the local
needs of our operations around the world, we were able to ensure
the safety of our employees through remote working, split shifts,
and enhanced hygiene protocols with special attention to colleagues
in vulnerable groups. We learned that through technology,
flexibility and careful planning, we can operate effectively while
reducing our travel footprint and improving the work life balance
for many of our staff. We will apply these learnings as we design
our future and set environmental targets to capture some of the
benefits we have seen.
Our operations proved to be flexible and resilient and we were
able to maintain operational continuity and product supply and
service for our customers albeit with increased costs in some areas
such as transport and logistics. We developed new ways of working
with customers such as online content, tools and webinars which
proved successful and have been incorporated in our normal
operations. We also implemented a cost-savings programme which
remains in place, reducing discretionary spend and utilising
furlough schemes where available to mitigate the impact of weak
markets on our profits. Operating expenses for FY20 were 12% below
the previous year and some of the actions taken will result in
permanent efficiencies and improvement to our cost base.
Performance
The Group reported revenues from continuing operations of
GBP105.6m, 15% below 2019 (2019: GBP124.0m) and Adjusted EBITDA(1)
of GBP14.5m, 32% below 2019 (2019: GBP21.3m). Our results reflect a
strong performance in Genetics supported by resilience in the
salmon industry, which was offset by a weak result in Advanced
Nutrition due to adverse conditions in the shrimp markets and the
ongoing oversupply of Artemia. Results in Health were impacted by
the significant restructuring and were primarily driven by sales of
our legacy sea lice treatment Salmosan(R) and continued investment
towards the launch of BMK08 and CleanTreat(R) in Q2 calendar year
2021.
Our Genetics business delivered revenues of GBP41.5m and
Adjusted EBITDA(1) of GBP14.4m; 5% and 43% above FY19. Our ability
to supply salmon eggs year round from our two land-based biosecure
facilities in Iceland and Salten, Norway, combined with our range
of disease-resistant eggs place us in a strong position in the
market and underpin our future growth. In addition, both facilities
use c.100% renewable energy contributing to our ESG environmental
goals. From a margin perspective, the continuing ramp-up of our
Salten facility brought previously outsourced production in-house
increasing profitability. Our facility in Iceland operated at
capacity and benefited from high demand from Scotland where imports
from other countries were restricted in the year. Progress on the
construction of our third salmon egg production facility located in
Chile continued according to plan and we expect to commence sales
of salmon eggs for this market in FY21.
In the shrimp market, we successfully commenced test market
sales of our SPR shrimp broodstock, continued scale trials in
China, Indonesia and Vietnam, and together with our local partner
progressed the construction of a multiplication centre in Thailand.
Although progress was at a slower pace than anticipated due to the
challenges posed by Covid-19, I am pleased with the strides we have
made and am optimistic about the potential that our entry into
shrimp genetics represents for us as a Group in the years to
come.
Advanced Nutrition reported revenues from continuing operations
of GBP59.4m and Adjusted EBITDA(1) of GBP6.4m; 22% and 60% below
FY19 respectively, primarily as a result of challenges posed by
Covid-19 and the temporary imbalance in the shrimp and Artemia
markets. While this is disappointing, we have a strong franchise in
Advanced Nutrition as well as the infrastructure to benefit from an
eventual market recovery. In the meantime, we continue to control
costs and selectively invest in areas capable of delivering high
margin growth.
The shrimp market which was severely impacted by the pandemic
underpins over 70% of our revenues in Advanced Nutrition. More than
60% of the global demand for shrimp derives from the hotel,
restaurant and catering sector which suffered drastically from the
global lockdown. In addition, local outbreaks and lockdowns in
major producing countries including India and Ecuador led to
significant disruption to production affecting demand for our
products. The sea bass/bream market which represents the balance of
our revenues showed more resilience. We expect the challenging
conditions in shrimp to continue into FY21.
Artemia continues to be our primary product area in Advanced
Nutrition representing 48% of our revenues in FY20 (FY19: 51%).
FY20 delivered another record harvest for Artemia compounding the
challenge of weak demand and resulting in lower prices and
increased competition. This affected our Artemia revenues and
margins and we continue to work to diversify our revenues by
continuing to expand our health, environmental and diet
products.
The operational focus in FY20 for Health was on the ongoing
preparations towards the launch of our novel sea lice solution
BMK08 and CleanTreat(R), investing in both infrastructure and
operational costs. I am pleased to report that substantial
milestones were reached. In September 2020 we received a positive
MRL opinion which represents an important stepping stone towards
obtaining a marketing authorisation to commercialise our product.
In parallel, we commissioned a second CleanTreat(R) unit for
delivery ahead of our commercial launch in Q2 CY21. Following the
restructuring, our focus in Health is on the successful roll-out of
BMK08 and CleanTreat(R). We are also working to identify potential
partners to develop the most promising salmon vaccines in our
pipeline.
The above impact on performance, together with the impairment
charge on intangible assets relating to Advanced Nutrition in the
prior year of GBP44.8m, mean that operating loss improved from
GBP46.4m in 2019 to GBP10.9m in 2020. Similarly, loss from
continuing operations improved to GBP22.8m (2019: GBP59.1m).
FY21 strategic priorities
As we enter FY21 we have a financially robust Group with leading
market positions in its three business areas of Genetics, Advanced
Nutrition and Health, each with material growth opportunities. The
strategy we set out at the beginning of FY20, our roadmap to
profitability, remains in place. Having completed a comprehensive
restructuring, our focus is now on the delivery on our pipeline of
commercial opportunities in the respective business areas. Key
strategic priorities will of course be the two major commercial
opportunities: BMK08 and CleanTreat(R) and SPR shrimp and we will
continue to invest both in infrastructure and in execution and
commercial capabilities. Both BMK08 and CleanTreat(R) as well as
SPR shrimp represent major innovations in their respective markets
addressing the biggest challenges that producers face, and in doing
so improving animal welfare and driving sustainability. Other
strategic priorities include maintaining and strengthening our
position in Advanced Nutrition as well as further streamlining and
integration of the Group to bring out the combined potential.
Benchmark is very well positioned in a very exciting industry.
Aquaculture is an industry for the future that will need to develop
in a sustainable way. Our ambition is to play a significant role in
this. Our vision is to drive sustainability - providing needed
solutions to crucial challenges as well as creating opportunities
for the industry from our core areas of leading expertise,
Genetics, Advanced Nutrition and Health. Benchmark is uniquely
placed to deliver on its commercial potential from a combination of
our strong position and exciting growth initiatives in the years to
come.
Our people
Benchmark employs more than 800 people around the world. I want
to thank them all for their remarkable commitment and contribution
towards our achievements this year particularly in the challenging
environment created by Covid-19.
Trond Williksen
Chief Executive Officer
Financial Review
Introduction
Focus on programme of disposals and cost control
I am pleased that my first year at Benchmark sees the Group
finish in a stronger position than it started and that the promised
restructuring programme has been fully implemented. Together with
the fundraising carried out in February, it puts us in a strong
financial position to selectively invest and address the challenges
brought about by the Covid-19 pandemic.
Looking forward, we have a streamlined Group with a
significantly lower cost base, and a path to profitability and cash
generation which we are committed to deliver on.
While the uncertainty around Covid-19 remains with the
consequent impact on some of our key markets, we have the
operational and financial resilience to manage through this period
and benefit from the long-term drivers in our sector to deliver
attractive returns.
Financial highlights
-- Strengthened financial position
o Programme of disposals of non-core businesses completed
delivering up to GBP44m; GBP43m gross equity raised in February
2020 through a placing and open offer
o Liquidity (cash and available facility) increased to GBP83.2m
(2019: GBP28.2m) and cash at year end of GBP71.6m (2019:
GBP16.1m)
o Net debt reduced significantly to GBP37.6m (2019:
GBP87.1m)
-- Revenues from continuing operations were 15% below the prior year resulting from:
o Good performance in Genetics with revenues 5% above the prior
year (+14% in constant currency)
o 22% reduction in Advanced Nutrition revenues due to the impact
of Covid-19 on global shrimp markets and a supply imbalance in the
Artemia markets
o Lower revenues in Health with the prior year benefiting from
revenues derived from BMK08 trials
-- Adjusted EBITDA(1) from continuing operations was GBP14.5m
against GBP21.3m the prior year reflecting lower revenues in
Advanced Nutrition, partially offset by higher margins in Genetics
and a reduction in R&D and operating costs from measures taken
during Covid-19
As Reported (GBPm unless otherwise 2019
stated) 2020 restated* % AER % CER(5)
----------------------------------- ------ ---------- ----- --------
Total revenue 120.4 148.7 (19%) (16%)
----------------------------------- ------ ---------- ----- --------
Revenue from continuing operations 105.6 124.0 (15%) (12%)
----------------------------------- ------ ---------- ----- --------
Operating loss from continuing
operations (10.9) (46.4) 77% 78%
----------------------------------- ------ ---------- ----- --------
Loss before tax from continuing
operations (22.6) (58.5) 61% 65%
----------------------------------- ------ ---------- ----- --------
Loss for the period - including
discontinued operations (31.9) (83.1) 62% 63%
----------------------------------- ------ ---------- ----- --------
Basic loss per share (p) (5.26) (15.03) 65% -
----------------------------------- ------ ---------- ----- --------
Net debt4 (37.6) (87.1) 57% -
----------------------------------- ------ ---------- ----- --------
1 EBITDA is earnings/(loss) before interest, tax, depreciation
and amortisation and impairment. See income statement.
2 Adjusted EBITDA is EBITDA(1) , before exceptional items and
acquisition related expenditure. See income statement.
3 Adjusted Operating Profit is operating loss before exceptional
items including acquisition related items and amortisation of
intangible assets excluding development costs.
4 Net debt is cash and cash equivalents less loans, borrowings
and lease obligations excluding balances held for sale. Net debt
includes GBP9.6m (FY2019: GBPnil) relating to
lease obligations (formerly treated as operating leases within
operating expenses) which are now held on balance sheet following
the adoption of IFRS 16 (note 8).
5 CER% is the change year on year translating current figures
using last year's foreign exchange rates.
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Overview of reported financial results
In FY20 the Group focused on delivering the programme of
structural efficiencies which it had announced in 2019. This
programme primarily included the businesses in Knowledge Services
and the veterinary services business within Health. As such these
activities were classified as discontinued operations in 2019. In
addition, in 2020 the Group conducted a review of its vaccine
strategy which led to the disposal of its vaccine manufacturing
facility and discontinuation of certain R&D activities in
Health which are classified as discontinued in 2020. Therefore,
continuing operations in 2019 were restated to include the Group's
vaccine activities which were discontinued in 2020.
Advanced Nutrition experienced challenging market conditions in
2020 that led to a reduction in revenue, which was partially offset
by growth in Genetics resulting in a decrease in Group revenue from
continuing operations of 15% to GBP105.6m in the year (2019:
GBP124.0m). This reduction in sales meant that Gross Profit from
continuing operations decreased to GBP55.0m (2019: GBP68.9m) and
Gross Margin dropped to 52% (2019: 56%) as shrimp markets declined
markedly during the Covid-19 pandemic. Using the same foreign
exchange rates experienced in 2019 (constant currency5) revenue
from continuing operations decreased by 12%.
Adjusted Measures (GBPm unless 2019
otherwise stated) 2020 restated* % AER % CER(5)
--------------------------------- ------ ---------- ----- --------
Gross profit from continuing
operations 55.0 68.9 (20%) (17%)
--------------------------------- ------ ---------- ----- --------
Gross profit % 52% 56% - -
--------------------------------- ------ ---------- ----- --------
Adjusted EBITDA2 from continuing
operations 14.5 21.3 (32%) (27%)
--------------------------------- ------ ---------- ----- --------
Total Adjusted EBITDA2 5.8 13.7 (58%) (51%)
--------------------------------- ------ ---------- ----- --------
Adjusted EBITDA2 margin %
from continuing operations 14% 17% - -
--------------------------------- ------ ---------- ----- --------
Adjusted Operating Profit3
from continuing operations 7.9 16.3 (52%) (62%)
--------------------------------- ------ ---------- ----- --------
Net debt4 (37.6) (87.1) 57% -
--------------------------------- ------ ---------- ----- --------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Business Area Performance
Revenue AEBITDA(2)
-------------- ----------------------------------------- --------------------------------------------------------------
AEBITDA(2) AEBITDA
Continuing margin margin
Operations Actual Actual Actual Actual % %
Revenue
(GBPm) 2020 2019 restated* % AER % CER(5) 2020 2019 restated* % AER % CER(5) 2020 2019
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Health 5.2 8.7 (40%) (34%) (3.7) (2.1) (76%) (75%) (71%) (24%)
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Genetics 41.5 39.7 5% 14% 14.4 10.1 43% 54% 35% 25%
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Advanced
Nutrition 59.4 76.4 (22%) (22%) 6.4 16.0 (60%) (60%) 11% 21%
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
All other
segments 0.0 0.7 (100%) (100%) (0.5) (0.2) (150%) (150%)
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Corporate 4.9 6.4 (23%) (23%) (2.1) (2.5) 16% 16%
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Inter-segment
sales (5.4) (7.9) 32% 30% - - - -
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
Total Group 105.6 124.0 (15%) (12%) 14.5 21.3 (32%) (27%) 14% 17%
-------------- ------ --------------- ------ -------- ------ --------------- ------ -------- ---------- -------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Group operating costs from continuing operations decreased by
12% to GBP33.3m (2019: GBP37.7m). This decrease reflects good cost
containment by pausing discretionary spend and implementing cost
reduction programmes in the year. Expensed R&D from continuing
operations also decreased by 23% to GBP7.3m (2019: GBP9.5m).
Adjusted EBITDA from continuing operations decreased by 32% to
GBP14.5m (2019: GBP21.3m) with the drop driven by lower sales in
Advanced Nutrition and Health. This was partially offset by an
increase in sales and margins in Genetics and reduced operating
costs and R&D. In addition, we had higher exceptional costs in
2020 due to the reorganisation of the continuing business.
Total revenues (including discontinued operations) were
GBP120.4m, down 19% (2018: GBP148.7m). Total Adjusted EBITDA
(including discontinued operations) decreased by 58% to GBP5.8m
(2019: GBP13.7m). Using constant currency total Adjusted EBITDA
decreased by 55%.
Adjusted measures
We continue to use adjusted results as our primary measures of
financial performance. We believe that these adjusted measures
enable a better evaluation of our underlying performance. This is
how the Board monitors the progress of the Group.
In line with many of our peers in the sector we highlight
expensed R&D on the face of the income statement separate from
operating expenses. Furthermore, we report earnings before
interest, tax, depreciation and amortisation ('EBITDA') and EBITDA
before including exceptional and acquisition related items
('Adjusted EBITDA'). The activities of the Group's equity accounted
investees are closely aligned with the Group's principal
activities, as these arrangements were set up to exploit
opportunities from the Intellectual Property (IP) held within the
Group. As a result, to ensure that adjusted performance measures
are more meaningful, the Group's share of the results of these
entities is included within Adjusted EBITDA. We also report this
adjusted measure after depreciation and amortisation of capitalised
development costs ('Adjusted Operating Profit') as the Board
consider this reflects the result after taking account of the
utilisation of the recently expanded production capacity. Available
liquidity, being cash and undrawn facilities, is an important
metric for management of the business as it gives a measure of the
available liquid funds and is also a key financial covenant in the
Group's main debt facilities.
Advanced Nutrition
Throughout 2020, Advanced Nutrition experienced weak markets,
low shrimp prices and aggressive price and market competition from
CIS Artemia and Artemia nauplii producers after strong Artemia
harvests. This was further exacerbated by the impact of Covid-19 on
both the end market for the consumption of shrimp (which has high
reliance on the food service industry) and operational disruption
to production which resulted in lower stocking levels of hatcheries
(and correspondingly a reduction in demand for our feeds). As a
result, revenues in Advanced Nutrition decreased by 22% in the
year. To arrest the impact from price competition in Artemia and
prepare to regain market share as Covid-19 lifts from our markets,
a strategic decision was made to commence a new pricing strategy
with price reductions in selected markets.
In 2020 29% (2019: 25%) of our revenues derive from the
Mediterranean sea bass and sea bream markets which has been
slightly more resilient than the shrimp markets to the effects of
Covid in the year. However, we still experienced a reduction in
revenues of 7.6% in these markets.
By product area, Artemia was most impacted with a reduction of
27% to revenue to GBP28.5m, followed by diets down 19% to GBP24.5m.
Health which covers our probiotic and environmental pond management
portfolio proved to be the most resilient down 2% to GBP6.4m.
The reduction in sales of GBP17.0m resulted in a reduction in
gross margin of GBP12.2m and drove the gross margin down from 52%
to 46%. This loss of margin was offset in part by the cost
containment exercise which resulted in reduced R&D and opex of
GBP2.5m to GBP20.8m. This led to Advanced Nutrition reporting
AEBITDA of GBP6.4m (2019: GBP16.0m) and a reduction in AEBITDA
margin from 21% to 11%.
Genetics
Genetics delivered good growth in revenue and Adjusted EBITDA
driven by sales of salmon eggs with specialist genetic traits at
premium prices while volumes remained flat. Revenues of GBP41.5m
were up 5% (2019: GBP39.7m), +14% in constant currency. Flat
volumes of salmon eggs partially reflect the move from previously
outsourced production to in-house.
The salmon egg business benefited from strong demand from
Scotland for Icelandic eggs, driven by the loss of infectious
salmon anemia ('ISA') free status in Norway and this helped offset
the impact of reduced demand for Norwegian eggs due to this loss of
ISA free status for Norway which constrained exports. This resulted
in revenue from salmon eggs of GBP27.0m (2019: GBP26.5m).
Our non-product based revenue streams, Royalties and Genetic
Services performed extremely well in the year reflecting the
quality of the team and IP in the business contributing GBP3.2m
(2019: GBP1.7m). This was supported by slightly increased harvest
income in the year GBP3.9m (2019: GBP3.4m) which offset the reduced
sales of other products such as lumpfish, GBP4.5m (2019:
GBP5.4m).
Gross margin increased in 2020 to GBP26.6m (2019: GBP25.3m)
driven by a combination of higher volumes from our Icelandic
facility which was running at capacity during 2020, the continued
ramp-up of the Salten facility, moving previously outsourced
production in-house, and the non-cash element of fair value
increase in biological assets.
Whilst demand for salmon remained relatively solid through the
Covid-19 related turmoil, as noted above, shrimp demand was
significantly affected. Consequently, we postponed the planned
commercial launch of our specific pathogen resistant ('SPR') shrimp
and used the opportunity to run additional market trials and obtain
feedback from test market sales. As our SPR shrimp programme and
facility remain in development phase, some of the costs associated
with it are capitalised. In 2020 we capitalised GBP1.6m of
development costs in intangibles and reported an AEBITDA loss of
GBP0.4m in the shrimp segment. When we commence the commercial
launch of the SPR shrimp, capitalisation will cease, and all costs
associated with the facility will flow into AEBITDA.
R&D spend and operating costs were lower than 2019 by
GBP0.2m and GBP2.3m respectively as Genetics paused all
discretionary spend during the second half of 2020 as part of the
cost containment exercise implemented across the Group.
All these factors contributed to AEBITDA growth in Genetics of
43% to GBP14.4m and AEBITDA margin increasing to 35% (2019:
25%).
Genetics has continued to establish its facility in Chile after
the dissolution of the joint venture with AquaChile in 2019 and
invested GBP1.5m of Opex and GBP1.2m of Capex in this new facility
in 2020. The intention is to start selling eggs in CY21 as we
continue to ramp up the capacity.
The share of profits from the equity accounted investees relates
to the joint venture with Salmar Genetics AS which delivered a
share of profit of GBP0.2m (2019: GBP0.2m); this was offset in part
by losses of GBP0.1m related to the associate in Thailand where, in
2019, we entered into an agreement with two partners for local
multiplication and distribution of our shrimp genetics products. We
expect to start selling products from this multiplication centre in
2021. In 2019, we also had the joint venture with AquaChile which
was unwound, share of losses associated with this business were
GBP0.6m in 2019.
Health
Health reported continuing revenue of GBP5.2m (2019: GBP8.7m).
In FY20 these sales are
made up solely from sales of our existing sea lice treatment,
Salmosan(R). The reduction in revenues reflect a drop to sales of
Salmosan(R) in Canada after a period of very high levels of sea
lice in 2019 and continued competition from generics in Chile. In
addition, revenues in 2019 included GBP0.9m of field trials for the
next generation sea lice treatment (BMK08 and CleanTreat(R)).
During the year, the vaccine strategy which was part of this
business area was reviewed and, as a consequence, the vaccines toll
manufacturing business and the vaccines development programmes for
Companion Animal were divested. In addition, work on the sea
bass/bream vaccines was ceased as delays to the programmes had
impacted on the expected return on investment. As planned the
veterinary diagnostics business was sold during the year.
Adjusted EBITDA loss for the continuing business area was
GBP3.7m (2019: GBP2.1m). The focus of the continuing business is
the sale of fish health pharmaceutical products, obtaining the
marketing authorisation for BMK08 and the subsequent commercial
launch of BMK08 and CleanTreat(R).
Exceptional items
Items that are material because of their nature 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. During the financial year a significant
amount of non-core operations were either closed or disposed and a
significant reorganisation of the Group occurred. Exceptional
expenses within continuing operations of GBP2.1m (2019: GBP0.6m)
related to aborted acquisition items, GBP0.6m and management
restructuring, GBP1.5m. Exceptional gains within discontinued
operations of GBP5.1m (2019: loss of GBP0.7m) include gains and
losses from the disposal programme of GBP12.0m and other closure
and restructuring costs.
Depreciation, amortisation and impairments
Depreciation and impairment of tangible assets related to
continuing operations were. GBP6.6m (2019 restated: GBP5.1m) The
depreciation charge in the year has increased due to charges on
leased assets of GBP1.2m following the adoption of IFRS 16 (2019:
GBPnil) along with the full year effect of the production
facilities at Salten coming online in 2019.
Amortisation and impairments of intangible assets related to
continuing operations were GBP16.6m (2019 restated: GBP62.1m)
Impairment charges in the year were associated with the divestments
and changes in the vaccine strategy. Prior year impairment charge
included GBP44.8m related to impairment of goodwill in the Advanced
Nutrition business due to changes in market outlook.
Research and development
As % of As % of
GBPm Continuing 2020 sales 2019 restated* sales
------------------------------- ---- ------- -------------- -------
Expensed R&D by business area
------------------------------- ---- ------- -------------- -------
Health 2.0 38% 2.3 26%
------------------------------- ---- ------- -------------- -------
Genetics 3.8 9% 4.0 10%
------------------------------- ---- ------- -------------- -------
Advanced Nutrition 1.5 3% 3.2 4%
------------------------------- ---- ------- -------------- -------
Total research and development 7.3 7% 9.5 8%
------------------------------- ---- ------- -------------- -------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (note 5).
R&D activities in the continued business have decreased in
the year by GBP2.2m and total R&D (both continued and
discontinued) decreased by GBP2.9m to GBP10.0m as a result of a
pause in discretionary spend as a cost and cash containment
exercise. In 2020 the Group reviewed its innovation strategy
aligning it to its new commercial aim. Genetics' research is
focused around continually developing new disease and parasitic
resistant traits as well as growth traits which we can breed into
our products. Advanced Nutrition's focus is on expanding our
product portfolio and driving growth through product improvements,
including the 100% Artemia replacement diet where good progress was
made in 2020. Health's research was mainly focused around the BMK08
and CleanTreat(R) development program.
Other operating costs
Other operating costs for the continuing business reduced from
GBP37.7m in 2019 to GBP33.3m in 2020. The reduction in costs was
primarily due to cost containment measures put in place to mitigate
the impact from Covid-19 and cost reduction programmes in each
business area to reduce overall cost.
Discontinued operations
All operations of the Knowledge Services business area and
certain areas of the Health business were discontinued in the prior
year and either disposed or ceased during the current financial
year. Knowledge Services had been identified in 2019 as not being
core for the future strategy of the Group. In 2020 a further review
was undertaken which resulted in a change to the vaccines strategy.
Consequently, the in-house development activities were also
discontinued and the assets disposed of where possible. In addition
to this, the vaccine facility in Braintree, Essex was divested.
This resulted in net profit from the disposals of GBP12.0m and a
loss from discontinued operations of GBP9.2m (2019 restated:
GBP24.0m).
Net finance costs
The Group incurred net finance costs from continuing operations
of GBP11.7m during the year (2019: GBP12.1m). Included within this
was interest charged on the Group's interest-bearing debt
facilities of GBP7.9m (2019: GBP6.0m) reflecting a full year's
interest cost from the NOK bond. Further, a foreign exchange loss
of GBP3.2m (2019: GBP4.6m) arose due to the movement in exchange
rates and there was a charge of GBP1.3m (2019: GBP1.7m) relating to
the fair value change in the cross currency hedge associated with
the NOK bond.
Statutory loss before tax
The loss before tax from continuing operations for the year at
GBP22.6m is lower than the prior year (2019 restated: loss of
GBP58.5m) as the impact of the reduced trading result was offset by
the impact of the prior year impairment charge of GBP44.8m on the
goodwill relating to the Advanced Nutrition business.
Taxation
There was a small tax charge on the loss for the year of GBP0.2m
(2019 restated: charge of GBP0.6m), mainly due to overseas tax
charges in Genetics and Advanced Nutrition, partially offset by
deferred tax credits on intangible assets mainly arising on
consolidation from acquisitions.
Reported loss for the year
The loss for the year after discontinued operations was GBP31.9m
(2019: loss of GBP83.1m) including an after tax loss from
discontinued operations of GBP9.2m (2019: loss of GBP24.0m).
Earnings per share
Basic loss and diluted loss per share were both -5.26p (2019:
loss per share -15.03p). The movement year on year is due to the
movement in the result as well as the equity issuance which
increased the number of shares in issue by 107.4m.
Dividends
No dividends have been paid or proposed in either 2020 or 2019
and the Board is not recommending a final dividend in respect of
the year ended 30 September 2020.
Biological assets
A feature of the Group's net assets is its investment in
biological assets, which under IAS 41 are stated at fair value. At
30 September 2020, the carrying value of biological assets was
GBP32.5m (2019: GBP28.5m). This increase is due principally to the
increase in volume of salmon eggs as well as expansion of
production as we continue to expand the biomass at Salten.
Intangibles
Additions to intangibles decreased to GBP5.6m (2019: GBP9.7m)
with the main area of investment being capitalised R&D which in
the year decreased by GBP3.1m to GBP4.6m (2019: GBP7.7m). R&D
costs related to products that are close to commercial launch have
to be capitalised when they meet the requirements set out under
IFRS 38. In this financial year, the main development projects
capitalised were as follows:
-- BMK08/CleanTreat(R) (GBP2.4m)
-- SPR shrimp (GBP1.6m)
-- 100% Artemia replacement diet (GBP0.6m)
In 2019, the majority of the amounts capitalised related to
BMK08/CleanTreat(R) as there was increased activities relating to
trials of BMK08/CleanTreat(R).
Capital expenditure
During 2020, we paused spend on discretionary capital
expenditure to maintain cash reserves. The Group incurred tangible
fixed asset additions of GBP5.9m (2019: GBP12.5m) of which GBP1.2m
related to our investment in CleanTreat(R). The remaining capex was
associated with our salmon egg business (GBP3.2m) and our Advanced
Nutrition business (GBP1.5m). We also incurred capex of GBP0.7m in
operations which were discontinued during 2020.
Implementation of IFRS 16
The accounting policy IFRS16 'Leases' was adopted in the period
and resulted in a lease liability of GBP5.1m being adopted at the
start of the period, with a corresponding right-of-use assets
increase of GBP5.1m. In 2020, the impact on the AEBITDA for
continuing operations was a credit of GBP2.1m (2019: GBPnil).
Cash flow, liquidity and net debt
Movement in net debt
Movement in net debt GBPm
------------------------------- ------
Net debt at 30 September
2019 (87.1)
------------------------------- ------
Cash generated from operations (7.2)
------------------------------- ------
Movement in working capital 5.2
------------------------------- ------
Proceeds from dissolving
Chile JV 6.9
------------------------------- ------
Proceeds from divested
assets/businesses 38.5
------------------------------- ------
Investment in associates (0.5)
------------------------------- ------
Interest and taxes (9.6)
------------------------------- ------
Capital expenditure (11.8)
------------------------------- ------
Equity raise 41.7
------------------------------- ------
Leases (including IFRS
16) (15.3)
------------------------------- ------
Other non-cash movements (0.9)
------------------------------- ------
Foreign exchange on cash
and debt 2.5
------------------------------- ------
Net debt at 30 September
2020 (37.6)
------------------------------- ------
Cash flow
Cash conservation, the equity raised and achieving the
divestments in 2020 have allowed us to strengthen the cash and net
debt position even through a difficult year of trading. Lower
activity levels in 2020 resulted in a cash outflow from operations
in the year of GBP7.2m (2019: Inflow of GBP14.2m), this lower
activity level also drove reduced working capital levels resulting
in an inflow of GBP5.2m (2019: Outflow of GBP19.2m). Capital
expenditure, both intangible and tangible in 2020 showed a
significant reduction of GBP4.0m at GBP11.8m (2019: GBP15.8m).
Borrowing facilities
During FY19, the Group was refinanced and a new senior secured
floating rate listed bond issue of NOK850m was put in place. The
bond which matures in June 2023, has a coupon of 5.25% above three
months Norwegian Interbank Offered Rate ('NIBOR'). In addition, new
borrowing facilities were established - a three-and-a-half-year
revolving credit facility ('RCF') of up to USD15.0m secured on
assets of certain Group companies. The interest rate on the
facility is between 3% and 3.5% above LIBOR depending on leverage
whose term expires in December 2022.
There are other borrowing facilities held within SalmoBreed
Salten AS which were put in place to fund the building of the new
salmon eggs facility totalling NOK281m (GBP23.2m) (2019: NOK302m
(GBP26.7m)), which are ringfenced without recourse to the other
parts of the Group. Interest on these other debt facilities ranges
between 2.65% and 5% above Norwegian base rates.
Covenants
Banking covenants for the NOK bond and RCF exist in relation to
liquidity and an 'equity ratio'. Liquidity, defined as 'freely
available and unrestricted cash and cash equivalents, including any
undrawn amounts under the RCF', must always exceed the minimum
liquidity value, set at GBP10m. Available liquidity at 30 September
2020 is GBP83.2m (2019: GBP28.2m). The equity ratio, defined as
'the ratio of Book Equity to Total Assets' shall always exceed 30%.
The equity ratio was 60% (2019 62%).
Cash and total debt
GBPm
------------------ --------------
Net debt 2020 2019
------------------ ------ ------
Cash 71.6 16.1
------------------ ------ ------
NOK850m bond (75.5) (75.9)
------------------ ------ ------
Other borrowings (23.2) (26.7)
------------------ ------ ------
Lease liabilities (10.5) (0.6)
------------------ ------ ------
Net debt (37.6) (87.1)
------------------ ------ ------
The RCF facility combined with the year-end cash balance of
GBP71.6m (2019: GBP16.1m) means the Group had total liquidity of
GBP83.2m (2019: GBP28.2m). This, whilst utilising tight cost and
cash control, is expected by the Directors to provide the Group
with sufficient liquidity to fund selective investments to further
the strategic priorities of the Group and provide adequate
headroom.
Equity raise
In February 2020, GBP41.7m net proceeds were raised through a
placing and open offer to fund the scale-up of CleanTreat(R),
necessary for the commercialisation of BMK08, and for the roll-out
of SPR shrimp.
Going concern
As noted in the Strategic Report, the impact of the Covid-19
pandemic has affected parts of the Group's businesses to varying
degrees. The ultimate impact of the pandemic on industry, the
economy, Benchmark's markets and its businesses remains to some
extent uncertain.
The Directors have prepared cash flow projections covering the
period to September 2022 to assess the Group's trading and cash
flow forecasts and the forecast compliance with the covenants
included within the Group's financing arrangements.
Cash resources have been boosted by the non-core business
disposals during the year and the ongoing cost base following these
transactions has been significantly reduced.
The uncertainty relating to the future impact on the Group of
the virus outbreak has been considered as part of the Directors'
assessment of the going concern assumption. The positive
preventative measures implemented by the Directors at an early
stage in response to the pandemic continue to be in force where
necessary. In the downside scenario analysis performed, the
Directors have considered the 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 delays to new product
launches in the Health business area. Key downside sensitivities
modelled include assumptions that there is no recovery in global
shrimp markets until quarter three of FY21, affecting demand for
Advanced Nutrition products and a three month potential delay in
the launch of BMK08, pushing commercial launch back to September
2021.
Mitigating measures within the control of management were
implemented early in the pandemic and remain in place and have been
factored into the downside analysis performed. These measures
include reductions in areas of discretionary spend, temporary
furlough of certain staff or reduced working hours, 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 the severe but plausible downside
scenarios modelled, the Group has sufficient liquidity and
resources throughout the period under review whilst still
maintaining adequate headroom against the borrowing covenants.
The Directors therefore remain confident that the Group and the
Company have adequate resources to continue to meet its liabilities
as and when they fall due within the period of 12 months from the
date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a
going concern basis.
Consolidated Income Statement
for the year ended 30 September 2020
2019
2020 Restated*
Notes GBP000 GBP000
------------------------------------------------------ ----- -------- ----------
Continuing operations
------------------------------------------------------ ----- -------- ----------
Revenue 105,565 124,006
------------------------------------------------------ ----- -------- ----------
Cost of sales (50,603) (55,064)
------------------------------------------------------ ----- -------- ----------
Gross profit 54,962 68,942
------------------------------------------------------ ----- -------- ----------
Research and development costs (7,282) (9,481)
------------------------------------------------------ ----- -------- ----------
Other operating costs (33,337) (37,706)
------------------------------------------------------ ----- -------- ----------
Share of profit/(loss) of equity-accounted investees,
net of tax 150 (414)
------------------------------------------------------ ----- -------- ----------
Adjusted EBITDA(2) 14,493 21,341
------------------------------------------------------ ----- -------- ----------
Exceptional - restructuring/acquisition related
items 4 (2,114) (581)
------------------------------------------------------ ----- -------- ----------
EBITDA(1) 12,379 20,760
------------------------------------------------------ ----- -------- ----------
Depreciation and impairment (6,640) (5,054)
------------------------------------------------------ ----- -------- ----------
Amortisation and impairment (16,613) (62,133)
------------------------------------------------------ ----- -------- ----------
Operating loss (10,874) (46,427)
------------------------------------------------------ ----- -------- ----------
Finance cost 3 (12,779) (12,422)
------------------------------------------------------ ----- -------- ----------
Finance income 3 1,082 368
------------------------------------------------------ ----- -------- ----------
Loss before taxation (22,571) (58,481)
------------------------------------------------------ ----- -------- ----------
Tax on loss (204) (640)
------------------------------------------------------ ----- -------- ----------
Loss from continuing operations (22,775) (59,121)
------------------------------------------------------ ----- -------- ----------
Discontinued operations
------------------------------------------------------ ----- -------- ----------
Loss from discontinued operations, net of tax 5 (9,174) (23,959)
------------------------------------------------------ ----- -------- ----------
(31,949) (83,080)
------------------------------------------------------ ----- -------- ----------
Loss for the year attributable to:
------------------------------------------------------ ----- -------- ----------
- Owners of the parent (32,923) (83,857)
------------------------------------------------------ ----- -------- ----------
- Non-controlling interest 974 777
------------------------------------------------------ ----- -------- ----------
(31,949) (83,080)
------------------------------------------------------ ----- -------- ----------
Earnings per share
------------------------------------------------------ ----- -------- ----------
Basic loss per share (pence) 6 (5.26) (15.03)
------------------------------------------------------ ----- -------- ----------
Diluted loss per share (pence) 6 (5.26) (15.03)
------------------------------------------------------ ----- -------- ----------
Earnings per share - continuing operations
----- -------- ----------
Basic loss per share (pence) 6 (3.80) (10.74)
------------------------------------------------------ ----- -------- ----------
Diluted loss per share (pence) 6 (3.80) (10.74)
------------------------------------------------------ ----- -------- ----------
GBP000 GBP000
--------------------------------------------- ------- -------
Adjusted EBITDA from continuing operations 14,493 21,341
---------------------------------------------- ------- -------
Adjusted EBITDA from discontinued operations (8,726) (7,616)
---------------------------------------------- ------- -------
Total Adjusted EBITDA 5,767 13,725
---------------------------------------------- ------- -------
1 EBITDA - earnings before interest, tax, depreciation, amortisation and impairment
2 Adjusted EBITDA - EBITDA before exceptional and acquisition related items
* 2019 numbers have been restated to reflect further operations
of the Group that have been classified as discontinued operations
during the year in line with IFRS 5 (see note 5).
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2020
2019
2020 Restated*
GBP000 GBP000
------------------------------------------------------- -------- ----------
Loss for the year (31,949) (83,080)
------------------------------------------------------- -------- ----------
Other comprehensive income
------------------------------------------------------- -------- ----------
Items that are or may be reclassified subsequently to
profit or loss
------------------------------------------------------- -------- ----------
Foreign exchange translation differences (20,327) 13,919
------------------------------------------------------- -------- ----------
Cash flow hedges - changes in fair value (5,932) (3,549)
------------------------------------------------------- -------- ----------
Cash flow hedges - reclassified to profit or loss (153) (17)
------------------------------------------------------- -------- ----------
Total comprehensive income for the period (58,361) (72,727)
------------------------------------------------------- -------- ----------
Total comprehensive income for the period attributable
to:
------------------------------------------------------- -------- ----------
- Owners of the parent (58,532) (73,174)
------------------------------------------------------- -------- ----------
- Non-controlling interest 171 447
------------------------------------------------------- -------- ----------
(58,361) (72,727)
------------------------------------------------------- -------- ----------
Total comprehensive income for the period attributable
to:
------------------------------------------------------- -------- ----------
- Continuing operations (50,604) (49,017)
------------------------------------------------------- -------- ----------
- Discontinued operations ** (7,928) (24,157)
------------------------------------------------------- -------- ----------
(58,532) (73,174)
------------------------------------------------------- -------- ----------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
** Total comprehensive income for the period relating to
discontinued operations for FY20 includes the loss of GBP9,174,000
(2019: GBP23,959,000) and foreign exchange gain of GBP1,246,000
(2019: loss of GBP198,000).
Consolidated Balance Sheet
as at 30 September 2020
2020 2019
Notes GBP000 GBP000
--------------------------------------------------- ----- --------- ---------
Assets
--------------------------------------------------- ----- --------- ---------
Property, plant and equipment 7 65,601 88,900
--------------------------------------------------- ----- --------- ---------
Right-of-use assets 8 10,347 -
--------------------------------------------------- ----- --------- ---------
Intangible assets 9 247,003 275,744
--------------------------------------------------- ----- --------- ---------
Equity-accounted investees 3,690 3,453
--------------------------------------------------- ----- --------- ---------
Other investments 23 25
--------------------------------------------------- ----- --------- ---------
Biological and agricultural assets 11 16,621 12,469
--------------------------------------------------- ----- --------- ---------
Non-current assets 343,285 380,591
--------------------------------------------------- ----- --------- ---------
Inventories 18,926 22,609
--------------------------------------------------- ----- --------- ---------
Biological and agricultural assets 11 15,848 16,024
--------------------------------------------------- ----- --------- ---------
Trade and other receivables 39,371 52,136
--------------------------------------------------- ----- --------- ---------
Cash and cash equivalents 71,605 16,051
--------------------------------------------------- ----- --------- ---------
145,750 106,820
--------------------------------------------------- ----- --------- ---------
Assets held for sale - 15,970
--------------------------------------------------- ----- --------- ---------
Current assets 145,750 122,790
--------------------------------------------------- ----- --------- ---------
Total assets 489,035 503,381
--------------------------------------------------- ----- --------- ---------
Liabilities
--------------------------------------------------- ----- --------- ---------
Trade and other payables (45,692) (35,235)
--------------------------------------------------- ----- --------- ---------
Loans and borrowings 12 (5,339) (3,231)
--------------------------------------------------- ----- --------- ---------
Corporation tax liability (4,344) (2,703)
--------------------------------------------------- ----- --------- ---------
Provisions - (404)
--------------------------------------------------- ----- --------- ---------
(55,375) (41,573)
--------------------------------------------------- ----- --------- ---------
Liabilities directly associated with the assets
held for sale - (10,634)
--------------------------------------------------- ----- --------- ---------
Current liabilities (55,375) (52,207)
--------------------------------------------------- ----- --------- ---------
Loans and borrowings 12 (103,819) (99,961)
--------------------------------------------------- ----- --------- ---------
Other payables (1,754) (2,004)
--------------------------------------------------- ----- --------- ---------
Deferred tax (32,647) (38,743)
--------------------------------------------------- ----- --------- ---------
Non-current liabilities (138,220) (140,708)
--------------------------------------------------- ----- --------- ---------
Total liabilities (193,595) (192,915)
--------------------------------------------------- ----- --------- ---------
Net assets 295,440 310,466
--------------------------------------------------- ----- --------- ---------
Issued capital and reserves attributable to owners
of the parent
--------------------------------------------------- ----- --------- ---------
Share capital 668 559
--------------------------------------------------- ----- --------- ---------
Additional paid-in capital* 399,601 358,044
--------------------------------------------------- ----- --------- ---------
Capital redemption reserve 5 5
--------------------------------------------------- ----- --------- ---------
Retained earnings (142,170) (110,916)
--------------------------------------------------- ----- --------- ---------
Hedging reserve (9,651) (3,566)
--------------------------------------------------- ----- --------- ---------
Foreign exchange reserve 40,678 60,202
--------------------------------------------------- ----- --------- ---------
Equity attributable to owners of the parent 289,131 304,328
--------------------------------------------------- ----- --------- ---------
Non-controlling interest 6,309 6,138
--------------------------------------------------- ----- --------- ---------
Total equity and reserves 295,440 310,466
--------------------------------------------------- ----- --------- ---------
Consolidated Statement of Changes in Equity
for the year ended 30 September 2020
Total
Additional attributable
paid-in to equity
Share share Other Hedging Retained holders Non-controlling Total
capital capital reserves reserve earnings of parent interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
As at 1 October 2018 557 357,894 45,958 - (28,240) 376,169 5,678 381,847
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Comprehensive income
for the period
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
(Loss) for the period - - - - (83,857) (83,857) 777 (83,080)
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Other comprehensive
income - - 14,249 (3,566) - 10,683 (330) 10,353
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Total comprehensive
income for
the period - - 14,249 (3,566) (83,857) (73,174) 447 (72,727)
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Contributions by and
distributions
to owners
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Share issue 2 150 - - - 152 - 152
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Share-based payment - - - - 1,181 1,181 - 1,181
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Total contributions
by and distributions
to owners 2 150 - - 1,181 1,333 - 1,333
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Changes in ownership
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Disposal of
subsidiary
with NCI - - - - - - 13 13
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Total changes in
ownership
interests - - - - - - 13 13
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Total transactions
with owners of
the Company 2 150 - - 1,181 1,333 13 1,346
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
As at 30 September
2019 559 358,044 60,207 (3,566) (110,916) 304,328 6,138 310,466
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Comprehensive income
for the period
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
(Loss) 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 668 399,601 40,683 (9,651) (142,170) 289,131 6,309 295,440
--------------------- --------- ---------- --------- -------- --------- ------------- --------------- --------
Consolidated Statement of Cash Flows
for the year ended 30 September 2020
2020 2019
GBP000 GBP000
----------------------------------------------------- -------- --------
Cash flows from operating activities
----------------------------------------------------- -------- --------
Loss for the year (31,949) (83,080)
------------------------------------------------------ -------- --------
Adjustments for:
----------------------------------------------------- -------- --------
Depreciation and impairment of property, plant
and equipment 9,138 17,227
------------------------------------------------------ -------- --------
Amortisation and impairment of intangible fixed
assets 19,402 66,087
------------------------------------------------------ -------- --------
Gain on sales of property, plant and equipment (1,140) (838)
------------------------------------------------------ -------- --------
Gain on sales of subsidiaries (14,120) -
------------------------------------------------------ -------- --------
Finance income (111) (368)
------------------------------------------------------ -------- --------
Finance costs 9,695 7,773
------------------------------------------------------ -------- --------
Other adjustments for non-cash items 200 68
------------------------------------------------------ -------- --------
Share of profit of equity-accounted investees,
net of tax (150) 414
------------------------------------------------------ -------- --------
Foreign exchange (gains)/losses (132) 5,620
------------------------------------------------------ -------- --------
Share-based payment expense 1,669 1,181
------------------------------------------------------ -------- --------
Tax credit 314 111
------------------------------------------------------ -------- --------
(7,184) 14,195
----------------------------------------------------- -------- --------
Decrease/(increase) in trade and other receivables 4,202 (12,516)
------------------------------------------------------ -------- --------
Decrease/(increase) in inventories 3,741 (2,273)
------------------------------------------------------ -------- --------
Increase in biological and agricultural assets (7,474) (8,593)
------------------------------------------------------ -------- --------
Increase in trade and other payables 5,006 3,968
------------------------------------------------------ -------- --------
(Decrease)/increase in provisions (260) 261
------------------------------------------------------ -------- --------
(1,969) (4,958)
----------------------------------------------------- -------- --------
Income taxes paid (2,087) (4,253)
------------------------------------------------------ -------- --------
Net cash flows used in operating activities (4,056) (9,211)
------------------------------------------------------ -------- --------
Investing activities
----------------------------------------------------- -------- --------
Proceeds from sales of subsidiaries, net of cash
disposed of 17,487 -
------------------------------------------------------ -------- --------
Acquisition of subsidiaries, net of cash acquired - (7)
------------------------------------------------------ -------- --------
Purchases of investments (522) (7,020)
------------------------------------------------------ -------- --------
Receipts from disposal of investments 6,932 5,942
------------------------------------------------------ -------- --------
Purchases of property, plant and equipment (5,851) (7,850)
------------------------------------------------------ -------- --------
Proceeds from sales of intangible assets 261 -
------------------------------------------------------ -------- --------
Purchases of intangibles (5,563) (7,964)
------------------------------------------------------ -------- --------
Purchases of held for sale assets (402) -
------------------------------------------------------ -------- --------
Proceeds from sales of property, plant and equipment 16,147 1,131
------------------------------------------------------ -------- --------
Proceeds from sales of other long-term assets 1,776 -
------------------------------------------------------ -------- --------
Interest received 111 447
------------------------------------------------------ -------- --------
Net cash flows generated from/(used in) investing
activities 30,376 (15,321)
------------------------------------------------------ -------- --------
Financing activities
----------------------------------------------------- -------- --------
Proceeds of share issues 42,978 2
------------------------------------------------------ -------- --------
Share-issue costs recognised through equity (1,312) -
------------------------------------------------------ -------- --------
Proceeds from bank or other borrowings 8,387 92,578
------------------------------------------------------ -------- --------
Repayment of bank or other borrowings (10,141) (71,224)
------------------------------------------------------ -------- --------
Interest and finance charges paid (7,659) (5,366)
Repayments of lease liabilities (2,120) (5)
------------------------------------------------------ -------- --------
Net cash inflow from financing activities 30,133 15,985
------------------------------------------------------ -------- --------
Net increase/(decrease) in cash and cash equivalents 56,453 (8,547)
------------------------------------------------------ -------- --------
Cash and cash equivalents at beginning of year 16,051 24,090
------------------------------------------------------ -------- --------
Effect of movements in exchange rate (899) 508
------------------------------------------------------ -------- --------
Cash and cash equivalents at end of year 71,605 16,051
------------------------------------------------------ -------- --------
The accompanying notes form part of the financial
statements.
1 Basis of preparation
These audited results have been prepared on the basis of the
accounting policies which are to be set out in Benchmark Holdings
Plc's annual report and financial statements for the year ended 30
September 2020.
The consolidated financial statements of the Group for the year
ended 30 September 2020 were prepared in accordance with
International Financial Reporting Standards ("IFRSs") as adopted
for use in the EU ("adopted IFRSs") and applicable law.
Whilst the financial information included in this preliminary
statement has been prepared on the basis of the requirements of
IFRSs in issue, as adopted by the European Union and effective at
30 September 2020, this statement does not itself contain
sufficient information to comply with IFRS.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 30 September 2020
or 2019 but is derived from those accounts. Statutory accounts for
2019 have been delivered to the registrar of companies, and those
for 2020 will be delivered in due course. The auditor has reported
on those accounts. Their report for the accounts of 2020 was (i)
unqualified and (ii) did not contain a statement under section
498(2) or (3) of the Companies Act 2006. The auditor's report for
2019 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.
The financial statements are prepared on the going concern
basis.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated. The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement, the Strategic Report, the
FY20 Financial Review and the Audit Committee Report.
As at 30 September 2020 the Group had net assets of GBP295.4m
(2019: GBP310.5m), including cash of GBP71.6m (2019: GBP16.1m) as
set out in the consolidated balance sheet. The Group made a loss
for the year of GBP31.9m (2019: GBP83.1m). As at 30 September 2020
the Company had net assets of GBP334.9m (2019: GBP304.2m),
including cash of GBP47.8m (2019: GBP0.8m). The Company made a loss
for the year of GBP7.0m (2019: GBP35.2m).
The impact of the Covid-19 pandemic has affected parts of the
Group's businesses to varying degrees. The ultimate impact of the
pandemic on industry, the economy, Benchmark's markets and its
businesses remains to some extent uncertain. Our main markets have
experienced mixed fortunes, with weak shrimp markets, resilient
salmon markets and sea bass/bream markets which have experienced
modest impact from Covid-19. The Directors monitor available market
analysis and believe this situation will continue into 2021. Whilst
the outlook for the shrimp market retains some uncertainty, the
outlook for the salmon sector (underpinning the Genetics and Health
businesses) remains positive and the Directors therefore believe
that large parts of the Group are well placed to deal with the
uncertain global economic future ahead.
The Directors have prepared cash flow projections covering the
period to September 2022 to assess the Group's trading and cash
flow forecasts and the forecast compliance with the covenants
included within the Group's financing arrangements. Cash resources
have been boosted by a number of non-core business disposals during
the year, including the successful disposal of the Improve
International group, the FVG group, the vaccines manufacturing
business and FAI Farms Limited during the period, and the ongoing
cost base following these transactions has been significantly
reduced.
The uncertainty relating to the future impact on the Group of
the virus outbreak has been considered as part of the Directors'
assessment of the going concern assumption. The positive
preventative measures implemented by the Directors at an early
stage in response to the pandemic continue to be in force where
necessary. In the downside scenario analysis performed, the
Directors have considered the 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 delays to new product
launches in the Health business area. Key downside sensitivities
modelled include assumptions that there is no recovery in global
shrimp markets until quarter three of FY21, affecting demand for
Advanced Nutrition products and a three month potential delay in
the launch of BMK08, pushing commercial launch back to September
2021. Mitigating measures within the control of management were
implemented early in the pandemic and remain in place and have been
factored into the downside analysis performed. These measures
include reductions in areas of discretionary spend, temporary
furlough of certain staff or reduced working hours, 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 the severe but plausible downside scenarios
modelled, the Group has sufficient liquidity and resources
throughout the period under review whilst still maintaining
adequate headroom against the borrowing covenants. The Directors
therefore remain confident that the Group and the Company have
adequate resources to continue to meet its liabilities as and when
they fall due within the period of 12 months from the date of
approval of these financial statements. Accordingly, the financial
statements have been prepared on a going concern basis.
2 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 - provided veterinary services, environmental services
diagnostics and health products to the global aquaculture market,
and manufactures licensed veterinary vaccines and vaccine
components; following the divestment programme 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 current and previous years. The
business area provided sustainable food production consultancy,
technical consultancy and assurance services and 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.
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.
Advanced All other Inter-segment
Year ended 30 September Genetics Nutrition Health segments Corporate sales Total
2020 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ -------- ---------- -------- --------- --------- ------------- --------
Revenue 41,504 59,362 10,799 9,257 4,939 (5,469) 120,392
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Cost of sales (14,886) (32,162) (12,437) (4,476) (139) 497 (63,603)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Gross profit/(loss) 26,618 27,200 (1,638) 4,781 4,800 (4,972) 56,789
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Research and development
costs (3,827) (1,525) (4,655) - - - (10,007)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Operating costs (8,499) (19,409) (6,593) (4,537) (7,099) 4,972 (41,165)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Share of profit of
equity-accounted investees,
net of tax 150 - - - - - 150
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Adjusted EBITDA 14,442 6,266 (12,886) 244 (2,299) - 5,767
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Exceptional -
restructuring/acquisition
related items - (727) 764 4,448 (1,513) - 2,972
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
EBITDA 14,442 5,539 (12,122) 4,692 (3,812) - 8,739
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Depreciation and impairment (3,341) (2,080) (2,747) (711) (259) - (9,138)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Amortisation and impairment (1,494) (14,800) (2,728) (380) - - (19,402)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Operating profit/(loss) 9,607 (11,341) (17,597) 3,601 (4,071) - (19,801)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Finance cost (11,945)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Finance income 111
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Loss before tax (31,635)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Advanced All other Inter-segment
Year ended 30 September Genetics Nutrition Health segments Corporate sales Total
2019 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ -------- ---------- -------- --------- --------- ------------- --------
Revenue 39,696 76,776 17,742 15,881 6,534 (7,890) 148,739
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Cost of sales (14,376) (37,502) (14,112) (8,059) (394) 1,515 (72,928)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Gross profit/(loss) 25,320 39,274 3,630 7,822 6,140 (6,375) 75,811
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Research and development
costs (3,986) (3,173) (5,691) - - - (12,850)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Operating costs (10,845) (20,695) (8,136) (6,558) (8,963) 6,375 (48,822)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Share of profit of
equity-accounted investees,
net of tax (414) - - - - - (414)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Adjusted EBITDA 10,075 15,406 (10,197) 1,264 (2,823) - 13,725
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Exceptional -
restructuring/acquisition
related items (58) - - (745) (523) - (1,326)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
EBITDA 10,017 15,406 (10,197) 519 (3,346) - 12,399
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Depreciation (2,807) (1,878) (4,400) (8,025) (117) - (17,227)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Amortisation and impairment (2,079) (61,959) (216) (1,833) - - (66,087)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Operating profit/(loss) 5,131 (48,431) (14,813) (9,339) (3,463) - (70,915)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Finance cost (12,422)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Finance income 368
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Loss before tax (82,969)
------------------------------------- -------- ---------- -------- --------- --------- ------------- --------
Reconciliation of segmental information to IFRS measures -
revenue and loss before tax
Revenue
2019
2020 Restated*
GBP000 GBP000
------------------------------------------- -------- ----------
Total revenue per segmental information 120,392 148,739
------------------------------------------- -------- ----------
Less: revenue from discontinued operations (14,827) (24,733)
------------------------------------------- -------- ----------
Consolidated revenue 105,565 124,006
------------------------------------------- -------- ----------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Loss before tax
2019
2020 Restated*
GBP000 GBP000
--------------------------------------------------- -------- ----------
Loss before tax per segmental information (31,635) (82,969)
--------------------------------------------------- -------- ----------
Less: loss before tax from discontinued operations 9,064 24,488
--------------------------------------------------- -------- ----------
Consolidated loss before tax (22,571) (58,481)
--------------------------------------------------- -------- ----------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
3 Net finance costs
Continuing operations
2020 2019
GBP000 GBP000
--------------------------------------------------------- -------- --------
Interest received on bank deposits 98 366
--------------------------------------------------------- -------- --------
Foreign exchange gains on financing activities 971 -
--------------------------------------------------------- -------- --------
Dividend income 13 2
--------------------------------------------------------- -------- --------
Finance income 1,082 368
--------------------------------------------------------- -------- --------
Finance leases (interest portion) (503) (65)
--------------------------------------------------------- -------- --------
Foreign exchange losses on financing activities - (1,594)
--------------------------------------------------------- -------- --------
Foreign exchange losses on operating activities (3,221) (3,055)
--------------------------------------------------------- -------- --------
Cash flow hedges - reclassified from other comprehensive
income 153 17
--------------------------------------------------------- -------- --------
Cash flow hedges - ineffective portion of changes in
fair value (1,338) (1,696)
--------------------------------------------------------- -------- --------
Interest expense on financial liabilities measured at
amortised cost (7,870) (6,029)
--------------------------------------------------------- -------- --------
Finance costs (12,779) (12,422)
--------------------------------------------------------- -------- --------
Net finance costs recognised in profit or loss (11,697) (12,054)
--------------------------------------------------------- -------- --------
4 Exceptional items - restructuring/acquisition related
items
Items that are material because of their nature, non-recurring
or 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.
2020 2019
GBP000 GBP000
-------------------------------- ------- -------
Acquisition related items 586 (82)
-------------------------------- ------- -------
Exceptional restructuring costs 1,528 663
-------------------------------- ------- -------
Total exceptional items 2,114 581
-------------------------------- ------- -------
Acquisition related items are costs incurred in investigating
and acquiring new businesses. During the year GBP233,000 was
expensed in relation to a loan provided to a potential acquisition
target and which has now been provided for, and GBP353,000 for
professional fees in relation to investigating the potential of a
partnership in the Health business area which was not pursued.
In 2019 the contingent consideration element of the provision
for deferred consideration held for previous acquisitions was
recalculated considering up to date performance of those
acquisitions. As a result GBP86,000 was released in 2019 and
included in acquisition related items.
Exceptional expenses include: GBP52,000 of legal fees (2019:
GBP214,000) and GBP1,244,000 of staff costs (2019: GBP391,000)
relating to the Board's decision to make significant changes to the
Group's management team and bring in new management and GBP232,000
(2019: GBP58,000) of other restructuring items.
5 Discontinued operations
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 in the prior year
and the sales of the disposal group were completed during the
current year (see below) and therefore continue to be shown as
discontinued.
During the 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. A restructuring of the Health business area saw the closure
of the research and development operations at two sites, and 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 in the current year
with a corresponding restatement of the consolidated income
statement and consolidated statement of comprehensive income for
the year ended 30 September 2019 to reflect these changes.
2019
2020 Restated*
GBP000 GBP000
------------------------------------ -------- ----------
Revenue 14,827 24,733
------------------------------------ -------- ----------
Cost of sales (13,000) (17,864)
------------------------------------ -------- ----------
Gross profit 1,827 6,869
------------------------------------ -------- ----------
Research and development costs (2,725) (3,369)
------------------------------------ -------- ----------
Other operating costs (7,828) (11,116)
------------------------------------ -------- ----------
Adjusted EBITDA (8,726) (7,616)
------------------------------------ -------- ----------
Exceptional items 5,086 (745)
------------------------------------ -------- ----------
EBITDA (3,640) (8,361)
------------------------------------ -------- ----------
Depreciation and impairment (2,498) (12,173)
------------------------------------ -------- ----------
Amortisation and impairment (2,789) (3,954)
------------------------------------ -------- ----------
Operating loss/Loss before taxation (8,927) (24,488)
------------------------------------ -------- ----------
Net finance costs (137) -
------------------------------------ -------- ----------
Loss before taxation (9,064) (24,488)
------------------------------------ -------- ----------
Tax on loss (110) 529
------------------------------------ -------- ----------
Loss from discontinued operations (9,174) (23,959)
------------------------------------ -------- ----------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Exceptional items within discontinued operations
2020 2019
GBP000 GBP000
------------------------------------------------ ------- -------
Profit on disposal of subsidiaries 14,120 -
------------------------------------------------ ------- -------
Loss on disposal of trade and assets (1,874) -
------------------------------------------------ ------- -------
Profit on other asset disposals 271 -
------------------------------------------------ ------- -------
Other costs relating to disposals (484) -
------------------------------------------------ ------- -------
Provision for onerous lease - (349)
------------------------------------------------ ------- -------
Staff costs(1) (1,603) (99)
------------------------------------------------ ------- -------
Cost of sales (including inventory write-downs) (1,666) (297)
------------------------------------------------ ------- -------
Legal and professional fees (3,513) -
------------------------------------------------ ------- -------
Other (165) -
------------------------------------------------ ------- -------
Total exceptional items 5,086 (745)
------------------------------------------------ ------- -------
1 Staff costs relate to redundancies and divestment related bonuses.
Results from discontinued operations by segment
All Advanced All Other Total
Advanced Other Total Nutrition Health Services Corporate discontinued
Nutrition Health Services Corporate discontinued 2019 2019 2019 2019 2019
2020 2020 2020 2020 2020 Restated* Restated* Restated* Restated* Restated*
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- --------- -------- -------- --------- ------------ ---------- ---------- --------- --------- ------------
Revenue 2 5,573 9,230 22 14,827 400 9,025 15,141 167 24,733
-------------- --------- -------- -------- --------- ------------ ---------- ---------- --------- --------- ------------
Adjusted
EBITDA (143) (9,151) 749 (181) (8,726) (609) (8,102) 1,386 (291) (7,616)
-------------- --------- -------- -------- --------- ------------ ---------- ---------- --------- --------- ------------
Operating
(loss)/profit (394) (11,914) 3,818 (437) (8,927) (3,201) (11,776) (9,218) (293) (24,488)
-------------- --------- -------- -------- --------- ------------ ---------- ---------- --------- --------- ------------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
Disposals of subsidiaries
On 1 January 2020, the Group divested its TomAlgae BV subsidiary
for nominal proceeds. The business was in the R&D phase and
required significant further investment to bring a commercial
product to market.
On 23 June 2020, the Group divested its global provider of
continuing professional development training for veterinary
professionals, Improve International Limited and its subsidiaries
('Improve'). Total consideration for Improve could be up to
GBP12.8m of which GBP11.8m has been recognised at fair value (see
table below). This included contingent consideration with a fair
value of GBP1.8m relating to the successful renewal of a contract
(GBP0.8m) and the delivery of certain future revenues in financial
years ended 30 September 2021 and 30 September 2022 (GBP1.0m). The
renewal of the contract has since occurred and the GBP0.8m
contingent consideration was received on 31 July 2020.
On 1 July 2020, the Group completed the sale of FVG Limited and
its subsidiaries ('FVG') to Pharmaq, part of the global animal
health company Zoetis, for a total cash consideration of GBP14.5m.
The sale comprises Benchmark's veterinary and diagnostic services
activities in the UK, Ireland, Norway and Chile.
On 10 August 2020, the Group completed the sale of its
subsidiary FAI Farms Limited ('FAI') whose activities include
consultancy in the food and farming sectors, research and
development in sustainable food production, and commercial farming.
The business was sold to members of its management team for cash
consideration of GBP0.1m.
The assets and liabilities of Improve, FVG and FAI were all
classified as held for sale at 30 September 2019.
Effects of disposals of subsidiaries on the financial position
of the Group
All figures in GBP000s Improve FVG FAI Farms TomAlgae Total
----------------------------------- -------- ------- --------- -------- --------
Assets
----------------------------------- -------- ------- --------- -------- --------
Property, plant and equipment
(including right-of-use assets) 1,638 2,080 874 - 4,592
----------------------------------- -------- ------- --------- -------- --------
Intangible assets 4,151 455 - - 4,606
----------------------------------- -------- ------- --------- -------- --------
Inventories and biological assets 164 315 238 - 717
----------------------------------- -------- ------- --------- -------- --------
Trade and other receivables 4,922 1,120 1,008 6 7,056
----------------------------------- -------- ------- --------- -------- --------
Cash and cash equivalents 4,367 2,372 294 243 7,276
----------------------------------- -------- ------- --------- -------- --------
Trade and other payables (8,816) (1,929) (1,567) (248) (12,560)
----------------------------------- -------- ------- --------- -------- --------
Provisions - - (15) - (15)
----------------------------------- -------- ------- --------- -------- --------
Corporation tax liability (59) (11) - (1) (71)
----------------------------------- -------- ------- --------- -------- --------
Deferred tax (178) 270 - - 92
----------------------------------- -------- ------- --------- -------- --------
Net assets and liabilities 6,189 4,672 832 - 11,693
----------------------------------- -------- ------- --------- -------- --------
Total consideration 11,760 14,465 100 22 26,347
----------------------------------- -------- ------- --------- -------- --------
Less: Fair value of contingent
consideration (1,778) - - - (1,778)
----------------------------------- -------- ------- --------- -------- --------
Less: Deferred consideration - - - (22) (22)
----------------------------------- -------- ------- --------- -------- --------
Less: Disposal costs deducted
from cash proceeds (351) - (183) - (534)
----------------------------------- -------- ------- --------- -------- --------
Consideration received/(paid)
in cash 9,631 14,465 (83) - 24,013
----------------------------------- -------- ------- --------- -------- --------
Cash and cash equivalents disposed
of (4,367) (2,372) (294) (243) (7,276)
----------------------------------- -------- ------- --------- -------- --------
Net cash inflow/(outflow) 5,264 12,093 (377) (243) 16,737
----------------------------------- -------- ------- --------- -------- --------
Trade and asset disposals
During the year, the businesses of a Group's subsidiary 5M
Enterprises Limited were disposed of as follows:
On 7 February 2020, the Group disposed of Aquaculture UK, its
conferencing business, for initial consideration of GBP1.5m with up
to an additional GBP0.5m depending on the revenue outcome of the
next event (this contingent consideration has been valued at GBPnil
at 30 September 2020 based on the uncertainty of the conference
revenue particularly due to the potential impact of
Covid-19).
Sales of the Group's various online news publications, for a
combined total cash consideration of GBP0.6m have completed in the
period.
On 31 July 2020 its publishing business was sold for cash
consideration of GBP0.1m.
On 23 June 2020 its veterinary practice magazine and conferences
business was sold for GBP0.1m.
On 31 July 2020, the Group completed the sale of its vaccine
manufacturing facility and certain other assets to Cell and Gene
Therapy Catapult for total cash consideration of GBP16.0m. This is
part of a GBP100m investment by the UK Government to develop the
Cell and Gene Therapy Catapult Manufacturing Innovation Centre to
manufacture millions of doses of Covid-19 vaccines per mont h.
Effect of business disposals on the financial position of the
Group
Vaccine
manufacturing
All figures in GBP000s 5m facility
------------------------------------------------------ ----- --------------
Assets
------------------------------------------------------ ----- --------------
Property, plant and equipment (including right-of-use
assets) 207 17,165
------------------------------------------------------ ----- --------------
Inventories and biological assets 241 218
------------------------------------------------------ ----- --------------
Trade and other payables - (754)
------------------------------------------------------ ----- --------------
Net assets and liabilities 448 16,629
------------------------------------------------------ ----- --------------
Total consideration 2,243 16,000
------------------------------------------------------ ----- --------------
Less: disposal costs deducted from cash proceeds - (3,040)
------------------------------------------------------ ----- --------------
Consideration received in cash 2,243 12,960
------------------------------------------------------ ----- --------------
Cash and cash equivalents disposed of (50) -
------------------------------------------------------ ----- --------------
Net cash inflow 2,193 12,960
------------------------------------------------------ ----- --------------
Other asset disposals
On 24 July 2020, the Group exited one of its vaccine development
collaboration agreements with its partner through a mutual and
amicable agreement. A settlement payment of GBP1.0m was received on
21 August, with a potential further GBP1.0m to be received
contingent on certain future conditions being met. Reflecting the
level of the uncertainty in meeting these conditions, the
contingent consideration has been deemed to have a fair value of
GBPnil.
A similar arrangement was reached to exit some other vaccine
collaboration agreements on 30 September 2020, in which a
settlement of CHF 0.8m (GBP0.7m) was paid to the collaboration
partner in October 2020 and the rights to any future benefits of a
successful vaccine were transferred to a third party in return for
the receipt of potential future development and performance
milestone payments of up to USD 6.0m (GBP4.9m) contingent on
certain approvals and performance criteria, and subsequent royalty
payments contingent on sales of successfully launched products.
Reflecting the level of uncertainty in meeting of these conditions,
the contingent consideration has been deemed to have a fair value
of GBPnil.
6 Loss per share
Basic loss per share is calculated by dividing the profit or
loss attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period.
-- 2020 -- 2019 Restated*
-------------------------------- ---------------------------------- ----------------------------------
Continuing Discontinued Total Continuing Discontinued Total
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Loss attributable to equity
holders of the parent
(GBP000) (23,749) (9,174) (32,923) (59,898) (23,959) (83,857)
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Weighted average number
of shares in issue (thousands) 625,466 557,851
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Basic loss per share (pence) (3.80) (1.47) (5.26) (10.74) (4.29) (15.03)
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
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 based on the monetary value of the subscription rights
attached to outstanding share options and warrants.
Therefore, the Company is required to adjust the loss per share
calculation in relation to the share options that are in issue
under the Company's share-based incentive schemes as follows:
-- 2020 -- 2019 Restated*
-------------------------------- ---------------------------------- ----------------------------------
Continuing Discontinued Total Continuing Discontinued Total
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Loss attributable to equity
holders of the parent
(GBP000) (23,749) (9,174) (32,923) (59,898) (23,959) (83,857)
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Weighted average number
of shares in issue (thousands) 625,466 557,851
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
Diluted loss per share
(pence) (3.80) (1.47) (5.26) (10.74) (4.29) (15.03)
-------------------------------- ---------- ------------ -------- ---------- ------------ --------
* 2019 numbers have been restated to reflect changes to the
ongoing continuing business during the year (Note 5).
A total of 1,426,663 potential ordinary shares have not been
included within the calculation of statutory diluted loss per share
for the year (2019: 2,962,168) as they are anti-dilutive. However,
these potential ordinary shares could dilute earnings/loss per
share in the future.
7 Property, plant and equipment
Assets Long-term
Freehold in the leasehold Office
land and course property Plant and E commerce equipment
buildings of construction improvements machinery infrastructure and fixtures Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Cost
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 1 October
2018 32,428 40,360 8,537 33,088 247 2,281 116,941
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Additions 6,760 1,234 135 3,523 - 804 12,456
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Increase/(decrease)
through transfers
from assets in
the course of
construction 37,083 (38,376) 2 1,282 - 9 -
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Exchange differences (237) (1,768) 9 827 - 204 (965)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification
to assets held
for resale (200) - (2,096) (6,228) (247) (489) (9,260)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals (461) (146) (19) (1,013) - (190) (1,829)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals through
sale of subsidiary - - (102) (67) - (9) (178)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 30
September
2019 75,373 1,304 6,466 31,412 - 2,610 117,165
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 1 October
2019 75,373 1,304 6,466 31,412 - 2,610 117,165
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Transfer to
right-of-use
assets on 1 October
2019 - - - (292) - - (292)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Additions 1,593 715 352 2,799 - 393 5,852
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification 500 (177) (500) 177 - - -
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Increase/(decrease)
through transfers
from assets in
the course of
construction 366 (489) - 46 - 77 -
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Exchange differences (5,924) (110) (191) (1,986) - (298) (8,509)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification
from assets held
for resale - - - 2,504 - - 2,504
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals (14,052) (30) (160) (8,600) - (184) (23,026)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals through
sale of subsidiary - - - (911) - (2) (913)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 30
September
2020 57,856 1,213 5,967 25,149 - 2,596 92,781
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Accumulated
Depreciation
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 1 October
2018 3,855 - 1,989 10,667 246 657 17,414
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Depreciation charge
for the year 2,372 - 972 4,726 1 486 8,557
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Impairment charge
for the year - 295 3,079 4,714 - 9 8,097
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification
to assets held
for resale (61) - (1,083) (3,853) (247) (241) (5,485)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Exchange differences 302 - 52 730 - 214 1,298
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals (425) - - (921) - (191) (1,537)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals through
sale of subsidiary - - (24) (49) - (6) (79)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 30
September
2019 6,043 295 4,985 16,014 - 928 28,265
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 1 October
2019 6,043 295 4,985 16,014 - 928 28,265
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Transfer to
right-of-use
asset on 1 October
2019 - - - (14) - - (14)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Depreciation charge
for the year 2,208 - 222 2,605 - 454 5,489
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Impairment charge
for the year 542 - 99 112 - - 753
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification 92 (177) (92) 177 - - -
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Reclassification
from assets held
for resale - - - 2,504 - - 2,504
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Exchange differences (979) (88) (129) (1,163) - (179) (2,538)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals (1,425) (30) (101) (4,655) - (155) (6,366)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Disposals through
sale of subsidiary - - - (911) - (2) (913)
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Balance at 30
September
2020 6,481 - 4,984 14,669 - 1,046 27,180
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Net book value
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
At 30 September
2020 51,375 1,213 983 10,480 - 1,550 65,601
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
At 30 September
2019 69,330 1,009 1,481 15,398 - 1,682 88,900
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
At 1 October 2018 28,573 40,360 6,548 22,421 1 1,624 99,527
-------------------- ---------- --------------- ------------- ---------- --------------- ------------- --------
Following the decision in 2019 to proceed with the structural
efficiencies plan, the carrying value of property, plant and
equipment assets in the relevant businesses was reviewed for
recoverability. A resulting impairment charge of GBP8,097,000 was
made against the carrying value of the various assets. A further
charge of GBP753,000 has been made against similar assets in other
businesses discontinued in the year.
8 Leases
2020 2019
Right-of-use assets GBP000 GBP000
------------------------------ ------- -------
Leasehold property 7,698 -
------------------------------ ------- -------
Plant and machinery 2,437 -
------------------------------ ------- -------
Office equipment and fixtures 212 -
------------------------------ ------- -------
10,347 -
------------------------------ ------- -------
2020 2019
Lease liabilities GBP000 GBP000
------------------------------------------- ------- -------
Current 2,483 -
------------------------------------------- ------- -------
Non-current 7,956 -
------------------------------------------- ------- -------
10,439 -
------------------------------------------- ------- -------
Depreciation charge of right-of-use assets
------------------------------------------- ------- -------
Leasehold property 850 -
------------------------------------------- ------- -------
Plant and machinery 612 -
------------------------------------------- ------- -------
Office equipment and fixtures 83 -
------------------------------------------- ------- -------
1,545 -
------------------------------------------- ------- -------
2020 2019
Additional information GBP000 GBP000
---------------------------------------------------- ------- -------
Additions to right-of-use assets 7,963 -
---------------------------------------------------- ------- -------
Impairment of leasehold property right-of-use asset 273 -
---------------------------------------------------- ------- -------
Interest expense 571 -
---------------------------------------------------- ------- -------
Expense relating to short-term leases 981 -
---------------------------------------------------- ------- -------
Expense relating to leases of low-value leases 27 -
---------------------------------------------------- ------- -------
Total cash outflow for leases 3,372 -
---------------------------------------------------- ------- -------
The Group adopted IFRS 16: Leases on 1 October 2019. The impact
of IFRS 16 on the Group has been to recognise a lease liability
representing its obligation to make lease payments and a
corresponding right-of-use asset representing its right to use the
underlying asset in the balance sheet for leases currently
classified as operating leases, except for short-term leases and
leases of low value assets. The nature of expenses related to these
leases has now changed because the Group now recognises a
depreciation charge for right-of-use assets and interest expense on
lease liabilities.
IFRS 16 has been adopted for the year ending 30 September 2020
using the modified retrospective approach. The right-of-use asset
recognised on transition has been measured at an amount materially
equal to the lease liability, which has been measured at the
present value of the future lease payments discounted using the
discount rate implicit in the lease (or if that rate could not be
readily determined, the lessee's incremental borrowing rate).
Therefore, no adjustment to the opening balance of retained
earnings at 1 October 2019 has been necessary along with no
restatement of comparative information.
9 Intangible assets
Patents
and Intellectual Customer Development
Websites Goodwill trademarks property lists Contracts Licences Genetics costs Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Cost or valuation
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 1
October
2018 685 152,716 847 138,435 6,933 9,530 35,682 26,186 10,905 381,919
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Additions - on
acquisition - - - 319 - - - - - 319
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Additions -
externally
acquired 118 - 62 1,799 - - 38 - - 2,017
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Additions -
internally
developed - - - - - - - - 7,673 7,673
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Disposals through
sale of
subsidiary - (84) - - - - - - - (84)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Reclassification
to assets held
for resale (689) (4,657) (465) (1,691) (1,484) (2,431) - - - (11,417)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Exchange
differences (2) 5,414 (2) 7,942 323 (284) 1,357 (1,327) 128 13,549
Balance at 30
September
2019 112 153,389 442 146,804 5,772 6,815 37,077 24,859 18,706 393,976
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 1
October
2019 112 153,389 442 146,804 5,772 6,815 37,077 24,859 18,706 393,976
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Additions -
externally
acquired 112 - 141 728 - - - - - 981
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Additions -
internally
developed - - - - - - - - 4,583 4,583
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Increase/decrease
through transfers - - (292) 107 - - 185 - - -
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Disposals through
sale of
subsidiary - - (2) (2,209) - - - - - (2,211)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Disposals - - (18) - - - - - (55) (73)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Exchange
differences (23) (9,043) (1) (6,712) (275) (254) (1,703) (2,677) (177) (20,865)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 30
September
2020 201 144,346 270 138,718 5,497 6,561 35,559 22,182 23,057 376,391
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Accumulated
amortisation
and impairment
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 1
October
2018 552 277 800 36,570 1,448 6,940 7,354 2,592 - 56,533
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Amortisation
charge
for the period 40 - (235) 13,884 608 1,389 1,874 686 - 18,246
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Impairment - 45,346 - 2,209 - - - - - 47,555
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Reclassification
to assets held
for resale (584) (816) (445) (645) (1,264) (2,298) - - - (6,052)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Exchange
differences - - (28) 2,562 42 (196) (305) (125) - 1,950
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 30
September
2019 8 44,807 92 54,580 834 5,835 8,923 3,153 - 118,232
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 1
October
2019 8 44,807 92 54,580 834 5,835 8,923 3,153 - 118,232
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Amortisation
charge
for the period 20 - 49 13,308 212 462 2,209 631 - 16,891
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Impairment - 432 19 - - - 591 - 1,091 2,133
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Disposals - - (18) - - - - - - (18)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Increase/decrease
through transfers - - (58) - - - 58 - - -
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Disposals through
sale of
subsidiary - - (2) (2,209) - - - - - (2,211)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Exchange
differences (2) (2,138) (1) (2,516) (41) (183) (405) (353) - (5,639)
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Balance at 30
September
2020 26 43,101 81 63,163 1,005 6,114 11,376 3,431 1,091 129,388
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
Net book value
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
At 30 September
2020 175 101,245 189 75,555 4,492 447 24,183 18,751 21,966 247,003
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
At 30 September
2019 104 108,582 350 92,224 4,938 980 28,154 21,706 18,706 275,744
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
At 1 October 2018 133 152,439 47 101,865 5,485 2,590 28,328 23,594 10,905 325,386
------------------ -------- -------- ---------- ------------ -------- --------- -------- -------- ----------- --------
For impairment of goodwill see note 10.
The sale of the assets of the Group's vaccines manufacturing
facility has resulted in an impairment of goodwill of GBP432,000
and licences of GBP591,000. The decision to discontinue vaccine
developments programmes had resulted in an impairment of
development costs of GBP1,091,000 and patents and trademarks of
GBP19,000.
Following the decision in 2019 to proceed with the structural
efficiencies plan, the carrying value of intangible fixed assets in
the relevant businesses was reviewed for recoverability. A
resulting impairment charge of GBP2,209,000 was made in 2019
against the carrying value of intellectual property assets, within
a relevant business in the Advanced Animal Nutrition segment that
had not been classified as a discontinued operation. This asset was
disposed of in the current year.
10 Impairment testing of goodwill and other intangible
assets
The Group tests goodwill and other intangibles not yet ready for
use annually for impairment, or more frequently if there are
indications that goodwill or the other intangible assets might be
impaired.
Goodwill acquired in a business combination is allocated, at
acquisition, to the CGUs that are expected to benefit from the
business combination. The only intangible assets not yet ready for
use are the capitalised development costs on internally developed
products.
Goodwill and capitalised development costs arise across the
Group, and are allocated specifically against the following
CGUs:
Advanced
Genetics Nutrition Health Total
2020 2020 2020 2020
GBP000 GBP000 GBP000 GBP000
--------------------------------------------- -------- ---------- ------- -------
Benchmark Genetics AS (previously SalmoBreed
AS) 6,523 - - 6,523
--------------------------------------------- -------- ---------- ------- -------
Stofnfiskur HF 11,216 - - 11,216
--------------------------------------------- -------- ---------- ------- -------
Akvaforsk Genetic Center* 8,040 - - 8,040
--------------------------------------------- -------- ---------- ------- -------
INVE Aquaculture Group - 75,466 - 75,466
--------------------------------------------- -------- ---------- ------- -------
Goodwill 25,779 75,466 - 101,245
--------------------------------------------- -------- ---------- ------- -------
Development costs 3,032 3,215 15,719 21,966
--------------------------------------------- -------- ---------- ------- -------
* Includes goodwill arising from the joint acquisition of
Akvaforsk Genetics Center AS (which was transferred into Benchmark
Genetics Norway) in the year and Benchmark Genetics USA (formerly
Akvaforsk Genetics Center Inc.)
Advanced
Genetics Nutrition Health Total
2019 2019 2019 2019
GBP000 GBP000 GBP000 GBP000
--------------------------------------------- -------- ---------- ------- -------
Benchmark Vaccines Limited - - 432 432
--------------------------------------------- -------- ---------- ------- -------
Benchmark Genetics AS (previously SalmoBreed
AS) 7,065 - - 7,065
--------------------------------------------- -------- ---------- ------- -------
Stofnfiskur HF 13,146 - - 13,146
--------------------------------------------- -------- ---------- ------- -------
Akvaforsk Genetic Center* 8,691 - - 8,691
--------------------------------------------- -------- ---------- ------- -------
INVE Aquaculture Group - 79,248 - 79,248
--------------------------------------------- -------- ---------- ------- -------
Goodwill 28,902 79,248 432 108,582
--------------------------------------------- -------- ---------- ------- -------
Development costs 1,454 2,802 14,450 18,706
--------------------------------------------- -------- ---------- ------- -------
* Includes goodwill arising from the joint acquisition of
Akvaforsk Genetics Center AS and Akvaforsk Genetics Center Inc.
The recoverable amounts of the above CGUs have been determined
from value in use calculations. These calculations used Board
approved cash flow projections from five-year business plans based
on actual operating results and current forecasts. These forecasts
were then extrapolated into perpetuity taking account of specific
terminal growth rates for future cash flows, using individual
business operating margins based on past experience and future
expectations in light of anticipated economic and market
conditions. The pre-tax cash flows that these projections produced
were discounted at pre-tax discount rates based on the Group's beta
adjusted cost of capital reflecting management's assessment of
specific risks related to each CGU. Specific assumptions used are
as follows:
Genetics
The pre-tax cash flows from the five-year projections were
discounted using a pre-tax discount rate of 11.6% (2019: 12.1%).
CAGR of revenue of 13% (2019: 15%) is implied by the five-year plan
and a long-term growth rate of 2.5% (2019: 2.5%) has been used to
extrapolate the terminal year cash flow into perpetuity.
Sensitivity testing of the recoverable amount to reasonably
possible changes in key assumptions has been performed. All other
assumptions being unchanged, an increase in the pre-tax discount
rate to 15.3% would reduce the headroom on the Genetics CGU to nil.
Should the discount rate increase further than this, then an
impairment of the goodwill or development costs would be
likely.
Advanced Nutrition
The pre-tax cash flows from the five-year projections were
discounted using a pre-tax discount rate of 10.3% (2019: 11.5%).
CAGR of revenue of 12% (2019: 12%) is implied by the five-year
plan, with the rate reflecting a particularly low year of growth in
FY20 and the recovery back to previous years' levels as well as
growth from new products. Long-term growth rate of 3.5% (2019:
3.5%) has been used to extrapolate the terminal year cash flow into
perpetuity.
The value in use assessment is sensitive to changes in the key
assumptions used. All other assumptions being unchanged, an
increase in the pre-tax discount rate to 10.8% would reduce the
headroom on the Advanced Animal Nutrition CGU to nil. Further
sensitivity analysis was performed and a reasonably likely downside
scenario, which assumes that there is no recovery in global shrimp
markets until FY22 with year on year base case growth rates pushed
out by one year. In this scenario, assuming that the FY21 cost base
remains the same as in the base case, without modelling any likely
mitigations, then there would be an impairment of GBP2.1m. This
downside scenario represents a CAGR of revenue of 11.8% from FY20
to FY25.
A further, more severe downside scenario has also been modelled,
where there is no recovery in global shrimp markets until FY22
allied to a delay in the launch of new products and further artemia
market price reductions. This would cause an impairment of GBP26.3m
without any modification to cost base. This downside scenario
represents a CAGR of revenue of 10.5% from FY20 to FY25. In this
type of severe downside scenario, discretionary spend, including
bonuses, marketing and travel would also be reduced (all of which
have been significantly scaled up in the base model compared to the
controlled suppression of FY20 actual costs). Modelling these
mitigations (but restricting mitigations to the period
pre-perpetuity) would limit the impairment to GBP6m.
Health
The pre-tax cash flows from the five-year projections were
discounted using a pre-tax discount rate of 13.2% (2019: 13.1%). An
assumed CAGR of revenue of 68% (2019: 49%) in the five-year plan
reflects the importance of the launch and commercialisation of the
business area's new sea lice treatment in the forecast period. A
long-term growth rate of 2.5% (2019: 2.5%) has been used to
extrapolate the terminal year cash flow into perpetuity.
The valuation of the Animal Health CGU indicates sufficient
headroom such that reasonably possible changes to key assumptions
are unlikely to result in an impairment in related development
costs. However, should the business area's new sea lice treatment
not be successfully launched and commercialised, then full
impairment of GBP15.3m of capitalised development costs could be
possible.
11 Biological assets
2020 2019
Book value of biological assets recognised at fair value GBP000 GBP000
--------------------------------------------------------- ------- -------
Salmon eggs, broodstock and milt 30,772 26,732
--------------------------------------------------------- ------- -------
Lumpfish 1,317 1,505
--------------------------------------------------------- ------- -------
Tilapia and shrimp 380 132
--------------------------------------------------------- ------- -------
Cattle, sheep, hens - 124
--------------------------------------------------------- ------- -------
Total biological assets 30 September 32,469 28,493
--------------------------------------------------------- ------- -------
Analysed as:
---------------------------------------------------------
Current 15,848 16,024
Non-current 16,621 12,469
--------------------------------------------------------- ------- -------
Total biological assets 30 September 32,469 28,493
--------------------------------------------------------- ------- -------
Change in book value of biological assets
2020 2019
GBP000 GBP000
------------------------------------------------------- -------- --------
Biological assets 1 October 28,493 20,394
------------------------------------------------------- -------- --------
Increase from production/purchase 36,678 31,610
------------------------------------------------------- -------- --------
Reduction due to sale/discarding surplus eggs (32,449) (24,941)
------------------------------------------------------- -------- --------
Foreign exchange movement before fair value adjustment (2,363) (940)
------------------------------------------------------- -------- --------
Change in fair value through income statement 3,253 2,699
------------------------------------------------------- -------- --------
Foreign exchange impact on fair value adjustment (1,143) (329)
------------------------------------------------------- -------- --------
Biological assets 30 September 2020 32,469 28,493
------------------------------------------------------- -------- --------
Livestock
The Group disposed of its commercial and research farming and
technology transfer business during the year and consequently held
no livestock at the year-end. At 30 September 2019 the Group held
484 head of sheep, 108 head of cattle, and 10,256 hens.
Assumptions used for determining fair value of broodstock, eggs
and fingerlings
IAS 41 requires that biological assets are accounted for at the
estimated fair value net of selling and harvesting costs. Fair
value is measured in accordance with IFRS 13 and is categorised
into Level 3 in the fair value hierarchy as the inputs include
unobservable inputs in the valuation of broodstock, eggs and
fingerlings for which there are no published market data
available.
There is a presumption that fair value can be measured reliably
for a biological asset. However, where alternative estimates of
fair value are determined to be clearly unreliable (for example
where we establish a new broodstock farm in a new territory), then
that biological asset shall be measured at its cost less any
accumulated depreciation and any accumulated impairment losses.
The calculation of the estimated fair value of salmon broodstock
is primarily based upon its main harvest output being salmon eggs,
which are priced upon our current seasonally adjusted selling
prices for salmon eggs. These prices are reduced for harvesting
costs, freight costs, incubation costs and market capacity to
arrive at the net value of broodstock. The valuation also reflects
the internally generated data to arrive at the biomass. This
includes the weight of the broodstock, the yield that each kilogram
of fish will produce and mortality rates. The fish take four years
to reach maturity, and the age and biomass of the fish is taken
into account in the fair value.
The calculation of the fair value of the salmon eggs is based
upon the current seasonally adjusted selling prices for salmon eggs
less transport and incubation costs and taking account of the
market capacity. The valuation also takes account of the mortality
rates of the eggs and expected life as sourced from internally
generated data.
The calculation of the fair value of the salmon and lumpfish
fingerlings is valued on current selling prices less transport
costs.
Where we have identified individual salmon carrying particular
traits or disease resistance, semen (milt) can be extracted and
deep frozen using cryopreservation techniques (the process of
freezing biological material at extreme temperatures in liquid
nitrogen). The calculation of the fair value of milt is based on
production and freezing costs and, where appropriate, an uplift to
recognise the additional selling price that can be achieved from
eggs fertilised by premium quality milt. The estimated fair value
of frozen milt at 30 September 2020 was GBP359,000 (2019:
GBP477,000). The decrease in value of GBP118,000 relates to net
usage during the year.
The valuation models by their nature are based upon uncertain
assumptions on sales prices, market capacity, weight, mortality
rates, yields and assessment of the discounts to reflect the stages
of maturity. The Group has a degree of expertise in these
assumptions but these assumptions are subject to change. Relatively
small changes in assumptions would have a significant impact on the
valuation. A 1% increase/decrease in assumed selling price would
increase/decrease the fair value of biological assets by
GBP304,000. A 10% increase/decrease in the biomass of salmon
broodstock and the quantity of salmon eggs valued would
increase/decrease the fair value of those biological assets by
GBP3,041,000.
The Group is exposed to financial risks arising from changes in
the market value of the salmon eggs, lumpfish, shrimp broodstock
and tilapia that it sells. The Group does not anticipate that
prices will decline significantly in the foreseeable future and,
therefore, has not entered into derivative or other contracts to
manage the risk of a decline in the price of its products. The
Group reviews its outlook for salmon eggs, lumpfish, shrimp
broodstock and tilapia prices regularly in considering the need for
active financial risk management.
Total quantities held at 30 September were:
2020 2019
--------------------------------- ------------ -----------
v 1,350
Salmon broodstock and fingerlings tonnes 805 tonnes
--------------------------------- -----------
Lumpfish fingerlings v 4.3m units 3.2m units
v 78.2m
Salmon eggs units 66.3m units
--------------------------------- ------------ -----------
12 Loans and borrowings
2020 2019
GBP000 GBP000
--------------------------- ------- -------
Non-current
--------------------------- ------- -------
2023 850m NOK loan notes 75,497 75,864
--------------------------- ------- -------
Bank borrowings 20,366 23,576
--------------------------- ------- -------
Other loans - 60
--------------------------- ------- -------
Lease liabilities (note 8) 7,956 461
--------------------------- ------- -------
103,819 99,961
--------------------------- ------- -------
Current
--------------------------- ------- -------
Bank borrowings 2,856 3,102
--------------------------- ------- -------
Lease liabilities (note 8) 2,483 129
--------------------------- ------- -------
5,339 3,231
--------------------------- ------- -------
Total loans and borrowings 109,158 103,192
--------------------------- ------- -------
The fair value of 2023 850m NOK Loan notes is not materially
different to the nominal value and has not been separately
disclosed.
On 21 June 2019, the Group successfully completed a new senior
secured floating rate listed bond issue of NOK 850m. The bond which
matures in June 2023, has a coupon of three-month NIBOR + 5.25%
p.a. with quarterly interest payments, and will be listed on the
Oslo Stock Exchange. The bond issue refinanced Benchmark's previous
USD 90m credit facility. DNB Markets acted as sole bookrunner for
the bond issue.
A USD 15m Revolving Credit Facility ('RCF') has been provided by
DNB Bank ASA (50%) and HSBC UK Bank PLC (50%). This was undrawn at
30 September 2020 and 30 September 2019.
SalmoBreed Salten AS had the following loans (which are
ring-fenced debt without recourse to the remainder of the Group)
at
30 September 2020:
NOK 194.4m term loan provided by Nordea Bank Norge Abp. The loan
is a five-year term loan ending November 2023 at an interest rate
of 2.65% above three-month NIBOR
NOK 20.0m 12 month working capital facility provided by Nordea
Bank Norge Abp (of which NOK 15.6m had been drawn at 30 September
2020)
NOK 49.3m term loan provided by Innovasjon Norge. The loan is a
12-and-a-half-year term loan ending March 2031 at an interest rate
of 4.2% above Norges Bank base rate
NOK 21.75m loan provided by Salten Aqua ASA (the minority
shareholder). The loan attracts interest at 2.5% above three-month
NIBOR and is repayable in a minimum of five years, but not before
the Nordea term loan.
The finance lease liabilities are secured on the assets to which
they relate.
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END
FR GLBDBUBDDGGR
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November 27, 2020 02:00 ET (07:00 GMT)
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