The company's announcement of its "highly successful" commercial-scale field trial has pleased the market.
Companies: Benchmark Holdings Plc
Benchmark (LON: BMK) has announced today the success of its first trial of Ectosan, a sea lice treatment for Salmon bred for consumption.
The update said the "highly successful" commercial-scale field trial is a "breakthrough development" for the Group and the Salmon industry alike, delivering a solution to one of the industry's biggest challenges.
Ectosan showed a 100% success rate against sea lice in the trial and has no environmental impact due to its use in conjunction with CleanTreat, the company's purification system. This removes any trace of the medicine from treatment water before it is discharged into the ocean, "underpinning its potential for commercial deployment across wider applications."
Shares in BMK jumped 6% with news of the successful trial of a product which could generate an estimated "£40-50m".
Benchmark is well on the way to providing the industry its first sea lice treatment which is not only effective, but also environmentally friendly and welfare friendly.
According to the update, sea lice infestation resulted in a "5% contraction in the production of salmon in Norway, equivalent to 70,000 tons" - a $500m financial impact on the industry.
Malcolm Pye, CEO of Benchmark commented:
"Given its significance to the industry and interest expressed by our customers, we expect to see substantial demand for the treatment and look forward to providing the treatment more widely upon regulatory approval."
BMK trades at a forecast PE ratio of 39x, well above the industry median of 16x. Consensus forecasts the Group to see Revenues grow by 45% in the two years to 2018 and to swing from a Net Loss of £18m to a Net Profit of £22m in the same period.
