Benchmark Share Discussion Threads

[abarclay] 03/6/2016 09:35

next tick up and i be bang in some more dough

[abarclay] 03/6/2016 08:54

FY2015 results underline aggressive H2 outcome

BMK headline results beat expectations through regaining an upper hand in

tussles with Salmosan generics and stronger than expected H2 results from

Animal Health and Technical Publishing divisions.

INVE Aquaculture adds a new dimension to this story

The reverse takeover of INVE is a strategic coup to diversify revenue streams and reduce

dependence on Salmosan sales. BMK's clear focus on aquaculture and continuing core

investment activities to support R&D, vaccine manufacturing and its product

pipeline underlines an exciting and sustainable growth story.

 Forecast revisions to FY16 and FY17. We revise our Group forecasts to include

the INVE acquisition, FY2015 results and the divisional trading outlook. Group

revenues in FY2016 and FY2017 are £117m and £162m (previously, £68m, £83m).

Trading EBITDA forecasts are £24m and £37m (from £11m and £16m).

 Adding INVE transforms BMK into more than a profitable company.... BMK's

aquaculture activities should generate >70% and >65% of revenues and GP,

respectively. This new leading aquaculture company boasts integrated activities

from 'seed to feed' across a number of species and extensive diagnostic, health

product and consulting services.

 New products and R&D investment are the LT plan to create value. BMK has,

probably, aquaculture's strongest new product and technology pipeline, with an

increased 61 (from 46) products across addressable markets valued up to £646m

(was £400m). INVE brings a further 40 products in development.

 We believe that BMK should be highly rated as a core investment into the

life sciences sector. 2016 commences a new strategic era that emphasises the

investment attractions. BMK's growth is above average for the sector, with CAGR

('16-'21) in revenues and adjusted PBT of >23% and >65%, respectively.

BMK is unique with no obvious comparators, suggesting a discounted cash flow (DCF)

method to estimate a fair value. In light of a review of our earnings model we

maintain our fair value of 130 pence/ share.

[abarclay] 03/6/2016 08:52

FY2015 results underline aggressive H2 outcome

BMK headline results beat expectations through regaining an upper hand in

tussles with Salmosan generics and stronger than expected H2 results from

Animal Health and Technical Publishing divisions.

INVE Aquaculture adds a new dimension to this story

The reverse takeover of INVE is a strategic coup to diversify revenue streams and reduce

dependence on Salmosan sales. BMK's clear focus on aquaculture and continuing core

investment activities to support R&D, vaccine manufacturing and its product

pipeline underlines an exciting and sustainable growth story.

 Forecast revisions to FY16 and FY17. We revise our Group forecasts to include

the INVE acquisition, FY2015 results and the divisional trading outlook. Group

revenues in FY2016 and FY2017 are £117m and £162m (previously, £68m, £83m).

Trading EBITDA forecasts are £24m and £37m (from £11m and £16m).

 Adding INVE transforms BMK into more than a profitable company.... BMK's

aquaculture activities should generate >70% and >65% of revenues and GP,

respectively. This new leading aquaculture company boasts integrated activities

from 'seed to feed' across a number of species and extensive diagnostic, health

product and consulting services.

 New products and R&D investment are the LT plan to create value. BMK has,

probably, aquaculture's strongest new product and technology pipeline, with an

increased 61 (from 46) products across addressable markets valued up to £646m

(was £400m). INVE brings a further 40 products in development.

 We believe that BMK should be highly rated as a core investment into the

life sciences sector. 2016 commences a new strategic era that emphasises the

investment attractions. BMK's growth is above average for the sector, with CAGR

('16-'21) in revenues and adjusted PBT of >23% and >65%, respectively.

BMK is unique with no obvious comparators, suggesting a discounted cash flow (DCF)

method to estimate a fair value. In light of a review of our earnings model we

maintain our fair value of 130 pence/ share.

[abarclay] 03/6/2016 08:50

Salmon at 30 year high, this should do well towards 100p

[multibagger] 03/6/2016 08:25

Good article in Shares...piqued my interest...started with 2x15k this morning.

BMK appears to have good IP and multiple revenue streams across many geographies. Current price at a significant discount to placing at circa 86p.Well poised for transformational growth IMHO and tightly held with good institutional backing.

Good luck all :)

[phowdo] 27/5/2016 11:22

"...the Company remains on track for the full year. "

"Our strategy of diversification is showing its value and importance, with half year performance in line with our expectations, despite the disruption caused by the border situation in Chile."

The TU yesterday could have been quite a bit worse. Back on the watchlist.

[dlku] 20/5/2016 10:54

Salmon Prices Scale 30-Year High

It’s a pretty good time to be a salmon farmer in Norway.

Export prices surged to a 30-year high, global demand has been growing, and profit margins have ballooned. As recently as 2014, the world’s largest salmon-producing country was mired in a slump, forced to sell the fish at discounts when trade sanctions led to a halt in shipments to Russia, a major buyer.

[rubberbullets] 20/5/2016 10:23

Aqua bounty up 200px

This next

[aishah] 19/5/2016 10:20

Salmon prices to leap as worldwide stocks face perfect storm of bad weather and disease, retailers warn:

Salmon prices are expected to leap as worldwide stocks face a perfect storm of bad weather and disease, retail analysts have warned.

An estimated 123,000 tonnes of salmon were killed in Chile in the toxic algae attack and wholesale prices are up 60 per cent.

Now retailers in Britain are being warned of higher prices as worldwide supplies of salmon fall short of demand.

Luana Clapis, of analysts Mintec, said: "Abnormally high ocean temperatures fuelled by El Niño have allowed algae blooms to flourish."

The bloom affected Chile's salmon region and millions of fish were killed, cutting production by 16 per cent.

The Chilean authorities claimed the algae was diminishing and salmon mortality had stopped in mid-March, but the country is battling a second algae attack and marine biologists say it could take months to clear.

[dlku] 10/5/2016 15:33

130p is a cool target

[dlku] 10/5/2016 15:32

We believe that BMK should be highly rated as a core investment into the

life sciences sector. 2016 commences a new strategic era that emphasises the

investment attractions. BMK's growth is above average for the sector, with CAGR

('16-'21) in revenues and adjusted PBT of >23% and >65%, respectively.

BMK is unique with no obvious comparators, suggesting a discounted cash flow (DCF)

method to estimate a fair value. In light of a review of our earnings model we

maintain our fair value of 130 pence/ share.

[dlku] 10/5/2016 14:36

chart bowling up as they say

[simon gordon] 09/5/2016 12:14

FT - 5/5/16:

Chile’s salmon sector hit by toxic algae bloom

It has been a torrid time for the Chilean salmon industry. After a challenging 2015 where it faced low prices in leading export markets, increased competition from Norway and high production costs, it is now battling the effects of a toxic algae bloom in the country’s waters, which has devastated fish stocks.

It is “a perfect storm” says Alf-Helge Aarskog, the chief executive of Norway’s Marine Harvest, the industry leader, which has large operations in Chile. The company is among the numerous salmon producers in the South American country to restructure, announcing substantial job cuts.

The algae bloom, believed to have been caused by rising sea temperatures due to the El Niño weather phenomenon, started in the Chilean waters at the start of the year. Chile’s National Fisheries and Aquaculture Service, which announced the end to the outbreak in late March, said a total of 25m fish were killed, although more recently a separate algae attack is affecting other sealife including bivalves.

Salmon prices have leapt, with Chilean prices up more than 50 per cent from $3.50 a pound to $5.40 last month, according to Chile’s SalmonEx, which provides salmon price data. Norwegian prices also hit a record earlier this year, rallying above NKr60 ($7.35) a kilogramme.

Prices in both markets have now eased slightly, but are expected to remain high as demand for salmon remains firm. Chile is the second-largest producer and exporter of the fish after Norway, and last year accounted for about a quarter of the world’s production.

“The Chilean disaster is drying up the market,” says Kolbjørn Giskeødegård, seafood analyst at Nordea.

Analysts forecast this year’s Chilean salmon production to fall about 20-25 per cent, with output remaining flat or showing a slight rebound in 2017. The Chilean supply declines come at a time when Norwegian output is also expected to fall due to a lice and disease outbreak last year. As a result, global supplies in 2016 are predicted to decline by 5-10 per cent.

The country’s fish farming sector, which is already struggling with high debt, is expected to face losses of between $500m and $1bn. Some leading companies have been insured against losses caused by the algae outbreak, but others, such as AquaChile had not been covered.

With production costs at about $4 a pound, current prices just above $5 mean that many producers will manage to be profitable, while in 2015 prices were just slightly above or lower than $4.

Nevertheless, with most Chilean salmon companies struggling with debt, and banks unwilling to lend further, high prices are unlikely to attract substantial efforts to restore production.

“In the past, you would have seen the industry prepare to rebuild production with more eggs and more fry and more smolt. At least for now, there are no signs the industry is ready to return,” says Mr Giskeødegård.

This in many ways is positive for an industry which has been trying to deal with overcapacity. “What Chile doesn’t need now is another cycle of boom and bust,” he adds.

Salmon farming in Chile started in the late 1970s and took off in the 1990s, but rapid growth and lax oversight led to frequent parasite and disease problems. The industry is known for its higher use of antibiotics than Norway, and has been trying to tackle this with the use of vaccines.

The biggest disease outbreak was in 2008, when a virus destroyed two-thirds of production through 2009 and 2010. However, the sector staged a recovery, with a surge in production eventually resulting in the recent oversupply.

“We don’t expect a big recovery in Chile,” says Gorjan Nikolik, analyst at Rabobank. Prices will not be as high as they are now, but companies are expected to try to restore fish health to stabilise production, he adds.

Although the algae crisis has not been man-made, it has renewed calls from some industry executives and analysts for more stringent regulation on salmon farming in Chile.

Marine Harvest, for example, compares the current situation in Chile to that of Norway in the 1980s. For more sustainable and stable production, the overall level of annual production for the industry as a whole should be set, with fewer operating licences, and a reduction in the number of farm locations and an increase in the distance between farms.

The Chilean government is discussing ways to cap the number of licences, says Mr Giskeødegård. However, some executives are doubtful whether the country’s lawmakers will be willing to take a strong stand in setting more stringent rules.

Mr Nikolik agrees that Chile’s regulation governing the salmon industry is not as advanced as in Norway. “In Chile, there are farms, where the water is too shallow or the flow-through of water isn’t strong enough. They are where they shouldn’t even be.”

[simon gordon] 09/5/2016 09:18

Pretty bearish article in the FT last Thursday on the state of the salmon industry in Chile.

Could have a knock on to BMK.

[simon gordon] 21/4/2016 09:56

On the 10th March Chile allowed the importation of Icelandic salmon eggs again.

Looks like the bottom might be in.

[simon gordon] 23/3/2016 16:36

PUG,

Like you say, must be a big overhang and that is likely causing the weakness. Actual story is shaping up pretty well. I'm not sure how you value it but if the overhang is eventually cleared the share could pop hard like it's done in the past.

[pugugly] 10/3/2016 16:47

simon gordon:> imo Think of a figure and then halve it. Heavily loss making and integration of new merger not yet proven. Share price in free fall and probably big overhang from vendors - Do you have any knowledge of whether there is a "lock-in" period ?

Also salmon in Chile I hear are suffering from disease (source from memory Bloomberg) PLUS of course my concerns (expressed above) as to whether this had been boosted too much by th e"Woodford effect" and is now suffering withdrawal symptoms.

Very much on the side for the moment until profitability considered (by me) as likely in the foreseeable future.

[simon gordon] 10/3/2016 13:54

How low can this go? No chart support levels as in uncharted territory.

[pugugly] 19/2/2016 09:18

Just come back and seen Exbrokers comment re Woodford - I am having worries about him as he seems to be having too many short terms declimers - eg: RM2 and HALO to name but two but cannot at the moment remember the others but from memory there are at least 3 or 4 others - I am sure some on this board will have a better memory than me.

[hannahh] 03/2/2016 09:09

Just a reminder that we will be hosting a webinar with the management of Benchmark today at 11.45am. In order to listen in please register at:

The presentation will last around 25mins with q&a following.

Thanks,
The Equity Development team

[hutch_pod] 02/2/2016 13:56

I did note they seemed to beat ED's estimates. Will be good to see the latest 2016 forecasts with the benefit of INVE, and perhaps recovery of the Animal Health division..

[bsharman3] 02/2/2016 13:41

any thoughts on the statement today? The market wasn't impressed..

[simon gordon] 25/1/2016 08:00

Exbroker,

Thanks for the heads up on that. Can't make it myself, hopefully ED will produce a fresh note to coincide with the presentation.

Cheers!