Benchmark Holdings results only part of the story, Beaufort Securities says
London-based brokerage, Beaufort Securities, has placed a “speculative-buy” rating on the shares of UK-based fish-fitness firm, Benchmark Holdings, saying its price target for the stock is now 80 pence, an increase of 16 percent over its previous recommendation.
Benchmark on Tuesday reported its full-year adjusted EBITDA for 2017 had increased by nine percent to GBP 10 million. Although revenues were up 28 percent to GBP 140 million, company net debt had also increased, and net profit had slipped.
“Importantly, BMK operates in high growth, high margin markets, with a target EBITDA margin of 25 percent by 2021 (over seven percent for full-year 2017),” a Beaufort note to investors said.
“Barriers to entry are high and BMK has strong IP protection for its technologies,” the note continued, saying the company operated in an industry of high margins and high growth.
While Beaufort’s equity research pointed to the company’s spread across genetics, nutrition and animal health, it also suggested “management may be spread thinly over the business fields”. An analyst chart, however, suggested the company was valued “at the top of its peers”.
