GuruFocus - Release Date: December 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Benchmark Holdings PLC (BHCCF) has concluded a strategic review and signed an agreement to sell its genetics business to Novo Holdings, which is expected to strengthen the company's financial position.
- The sale of the genetics business will allow Benchmark Holdings PLC (BHCCF) to pay down expensive debt and return significant capital to shareholders.
- The company has managed to reduce operating costs by 15% throughout the year, demonstrating effective cost management.
- Advanced Nutrition showed resilience with a 5% growth in constant exchange rate despite challenging market conditions in the shrimp industry.
- The health business has been restructured to be less capital-intensive, positioning it to be profitable and cash positive going forward.
- Benchmark Holdings PLC (BHCCF) experienced a 7% reduction in total group revenue in constant exchange rate compared to the previous financial year.
- The health business saw a 41% decline in revenues due to restructuring and exiting certain platforms, impacting overall financial performance.
- The company reported an operating loss for the year, partly due to impairments totaling 15.3 million.
- Gross profit in the nutrition business fell by 11% due to lower quality artemia inventory, affecting margins.
- The company faced market headwinds in significant parts of its business, particularly in the shrimp market, impacting sales and profitability.
A: Unidentified_2: The objective is to be a deleveraged business with flexible debt facilities to support normal business operations. While specific long-term leverage targets haven't been set, the focus is on maintaining a strong balance sheet. For margins, the nutrition business will aim to return to previously guided targets, and efforts will be made to reduce corporate cost margin drag.
Q: Was it always the priority to dispose of the genetics business as part of the strategic review?
A: Unidentified_1: The process was open-ended, and offers were received for all business areas and the group as a whole. The decision to dispose of the genetics business was made as it was deemed the best solution to develop further value from the remaining business areas.
Q: What are Benchmark Holdings' priorities moving forward after the transaction?
A: Unidentified_1: The focus will be on maintaining momentum in the development of the two remaining business areas, closing the transaction, and streamlining the organization to fit the new setup. This includes completing the transition service agreement with NOVO and achieving a streamlined structure by Q3 of the financial year.
Q: Post-transaction, what will be the species distribution for the group?
A: Unidentified_1: The group will have less focus on salmon, which was a significant part of the genetics business. The primary focus will be on shrimp and a wide range of marine fish, with the backbone being sea bass in the Mediterranean.
Q: Can you indicate a range for the expected dividend payout to shareholders?
A: Unidentified_2: While an exact number cannot be provided at this time, the intention is to return significant capital to shareholders. The magnitude can be estimated based on the gross proceeds from the transaction and the plan to repay debt.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.