TIDMTSTL
RNS Number : 8785B
Tristel PLC
12 October 2015
12 October 2015
TRISTEL plc
("Tristel", "the Company" or "the Group")
Final Results
Audited Results for the year ended 30 June 2015
Tristel plc (AIM: TSTL), the manufacturer of infection
prevention and contamination control products, announces its
audited results for the year ended 30 June 2015 ahead of
expectations.
Tristel's lead technology is a proprietary chlorine dioxide
formulation and the Company addresses three distinct markets:
-- The Human Healthcare market (hospital infection prevention -
via the Tristel brand)
-- The Contamination Control market (control of contamination in
critical environments - via the Crystel brand)
-- The Animal Healthcare market (veterinary practice infection
prevention - via the Anistel brand)
Financial Highlights
-- Turnover up 14% to GBP15.3m (2014: GBP13.5m).
-- Overseas sales up 21% to GBP5.5m (2014: GBP4.5m),
representing 36% of total sales.
-- EBITDA up 25% to GBP3.4m (2014: GBP2.7m).
-- Pre-tax profit up 44% to GBP2.6m (2014: GBP1.8m).
-- Basic earnings per share up 67% to 5.44p (2014: 3.25p).
-- Dividend per share for the full year increased to 5.72p
(2014: 1.62p), including a special dividend of 3p per share.
-- Net cash of GBP4.0m at year end (2014: GBP2.7m). Company
remains debt free.
Operational Highlights
-- 2.6m instrument decontamination procedures carried out
worldwide using Tristel Wipes (2014: 2.2m).
-- First sales in Latin America.
-- United States regulatory submissions underway.
Paul Swinney, Chief Executive of Tristel plc, said:
"Tristel performed strongly during the year, growing its
presence in the out-patients area of the hospital which we target
with our high performance chlorine dioxide disinfectants. This
performance was achieved both in the UK and overseas, with overseas
sales now contributing 36% of the Group total. We are pursuing
regulatory approvals for a wide selection of Tristel products in
over ten countries to continue the international expansion of our
business, and the outlook for the Group remains very promising"
The annual report and financial statements will be available on
the Company's website www.tristel.com later today.
For further information:
Tristel plc Tel: 01638 721 500
Paul Swinney, Chief Executive
Liz Dixon, Finance Director
Walbrook PR Ltd Tel: 020 7933 8780 or tristel@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
FinnCap
Geoff Nash / Giles Rolls Tel: 020 7600 1658
(Corporate Finance)
Stephen Norcross (Corporate
Broking)
Chairman's Statement
During 2015 Tristel made very satisfying progress towards the
objectives of our medium term financial plan and our goal of
becoming a global brand in infection and contamination control.
Turnover increased by 14% to GBP15.3m and our pre-tax margin rose
to 17% from 14% last year. Our international activities contributed
GBP5.5m to global turnover, representing 36% compared to 34% in
2014.
Our organisation and its employees
We have recently adopted a new marketing message for our
chlorine dioxide technology: "Better, Safer, Faster, Smarter" -
attributes that truly reflect our Tristel products. Our
organisation has to operate this way also, and I can confidently
report to our shareholders that the Company is in good shape, with
motivated and focused employees who are running a tight ship. We
have the appropriate skills and resources to continue our progress
and achieve our plans, which are straightforward and have been
clearly broadcast: to achieve revenue of GBP20m in the financial
year ending 30 June 2017; to maintain a pre-tax margin of at least
15% whilst investing in new markets and new products to sustain
high growth beyond 2017, and to create a global brand with our
chlorine dioxide technology. We are progressing well towards these
objectives and the Board is most appreciative of our employees who
have contributed so greatly this year.
Delivering to our shareholders
A key attribute of our business has been, and I believe will
continue to be, its ability to turn profit into cash. Post-tax
profit of GBP2.2m during the year translated into cash holdings at
30 June 2015 of GBP4.0m, up GBP1.3m from GBP2.7m at 30 June 2014,
after the payment of dividends during the year of GBP0.75m.
As I stated in February 2015 at the time of our interim results,
my philosophy is that our business should return to shareholders
cash when it is not required for future earnings enhancing
investment. In June 2015 we announced a special dividend of 3 pence
per share, distributing approximately GBP1.2m to shareholders in
August 2015. Going forward we will maintain our normal dividend
policy of two times cover, at least until our current four year
plan, initiated in 2014 and ending in 2017, is completed. The
policy will then be reviewed, and in the intervening two year
period we will adhere to our philosophy of returning cash to our
shareholders as circumstances allow.
For the year ended 30 June 2015 basic earnings per share were
5.44 pence (2014: 3.25 pence), an increase of 67%. In line with the
dividend policy stated above, the Board is recommending that the
final dividend is 2.135 pence (2014: 1.26 pence), an increase of
69%. Including the interim dividend of 0.585 pence (2014: 0.36
pence), the special dividend of 3 pence paid in August 2015, and
the final dividend, the total dividend for the year will be 5.72
pence (2014: 1.62 pence). If approved, the final dividend will be
paid on 18 December 2015 to shareholders on the register at 20
November 2015. The corresponding ex-dividend date is 19 November
2015.
Our Board
I am pleased to welcome David Orr to our Board as a
Non-Executive Director. His career spans the British Army, the City
and managing businesses in the packaging industry. He brings to our
Board very relevant experience of manufacturing in a tough business
environment.
Tristel as a public Company: a retrospective view of the first
ten years
We joined the AIM market on 5 June 2005. The flotation price was
37 pence per share. Revenue in our first year as a public Company
was GBP3.0m. During the past ten years we have achieved compound
annual growth in sales of 18%. Pre-tax profits have increased from
GBP0.1m to GBP2.55m.
Over the decade we have had to reinvent our product range
entirely, having focused 10 years ago on only one area of the
hospital - gastro-enterology - which went into decline a few years
after the Company went public. We have had to find new application
areas for our chlorine dioxide technology and create new products
to meet the needs of these application areas. We now focus upon the
out-patient clinic and have created significant strongholds in the
areas of ear, nose and throat (ENT), cardiology, ultrasound, GI
physiology, ophthalmology and urology. The products that we have
created for the out-patient clinic include chlorine dioxide wipes
and foams and over the past ten years their sales have grown at a
compound annual rate of 46%. Worldwide sales into the out-patient
market were GBP9.32m during the year representing 61% of all sales.
We have also applied our chlorine dioxide chemistry to surface
disinfection and since the first products for this purpose were
launched in 2007 their sales have grown at an annual compound rate
of 63%. Worldwide sales of surface disinfectants were GBP1.46m
during the year representing 10% of all sales.
We have established a significant geographical footprint and
sell through our own direct operations in the United Kingdom,
Germany, Switzerland, Austria, Russia, China, Hong Kong and New
Zealand and through 36 national distributors. In aggregate our
products are currently being supplied to 38 countries.
During the past decade we have returned GBP5.9m to our
shareholders as dividend. Between flotation and 30 June 2015 the
Tristel share price has increased by 173%. In comparison, during
this period the AIM All Share Index has declined by 22%.
Outlook
The value of this retrospective is not so much to judge the
achievements of the past, but more to provide us with an analytical
framework to assess what we can achieve over the next decade.
The overriding lesson that our management team and I have learnt
from our involvement in infection control, which now spans more
than twenty years, is how managers in hospitals, in all countries,
are slow to adopt a new technology, even when it is so far superior
to what is being used. Overcoming this inertia is Tristel's daily
challenge. One might think that products that are more effective in
killing the broadest range of micro-organisms, that are safer for
the user, that work more quickly so making the provision of
healthcare more efficient, and are easier and less costly to deploy
and maintain, would achieve rapid acceptance. But the pace of
adoption, although frustrating, is at least predictable and
consistent, as our top line CAGR of 18% over a decade testifies
to.
The corollary of having to fight the pace of change in
healthcare to gain (albeit slowly) dominance in clinical areas like
ENT is that we are equally difficult to dislodge by rival products
or a new technology. This characteristic of our business, combined
with the fact that over 95% of our revenues are of repeat
consumable products that perform a vital function in hospitals, has
always encouraged me to view the Tristel business model as very
resilient.
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As we continue to extend our geographical footprint, and as the
enterprises of our distributors (many of which are today almost
exclusively focused on the Tristel product range) develop further
and expand, it is conceivable that the pace of our growth could
accelerate. Furthermore, we have embarked upon our United States
regulatory approvals project and we have a more exciting pipeline
of new product innovations than I have ever witnessed in our
corporate history. For now, however, I am comfortable with our
stated growth objectives.
Finally, and as I said in my interim statement in February 2015,
we have the people, experience of our industry, and physical
resources to make further progress this year and into the
foreseeable future.
Francisco Soler
Chairman
9 October 2015
Chief Executive's report
Tristel is a manufacturer and supplier of infection prevention
and contamination control products that are based upon its
proprietary chlorine dioxide chemistry.
Towards a global brand
With three distinctively branded portfolios - Tristel for human
health, Crystel for contamination control, and Anistel for animal
health - we are one of only a small number of companies that has an
exclusive focus on infection prevention and that has a significant
international presence. Our international sales of GBP5.5m
represented 36% of Group turnover in the year, compared to 34% in
2014 and 7% five years ago.
Becoming a global brand in infection prevention is a key
strategic objective for Tristel. Via our direct operations and
distributors, our products are represented in 38 countries.
However, our products have still to tap into such significant
geographical markets as the United States and Canada; the great
majority of South America; India; much of Central Europe; the
African continent with the exception of a very small presence in
South Africa; and much of South East Asia.
Continued international expansion is, therefore, going to be a
major driving force for our future growth.
Obtaining regulatory approval to sell our products is the
initial step in entering any overseas market. The regulatory
project is sometimes undertaken in conjunction with a distributor,
and sometimes on our own, and if we take the latter approach we
determine the route to market whilst the regulatory approval is
progressing. We have a regulatory approval programme underway in
the United States and we are committed to establish a presence in
most countries within the Central and South American region by
2017.
Group overseas sales 2008 to 2015
FY Sales GBP
2007-8 378,000
2008-9 450,000
2009-10 610,000
2010-11 932,000
2011-12 2,148,000
2012-13 3,403,000
2013-14 4,531,000
2014-15 5,501,000
CAGR 47%
Overseas sales by brand portfolio
Sales GBP 2014-15 % total 2013-14 % total Yr-on-Yr
Increase
Human Healthcare 4,857,000 88% 4,079,000 90% 19%
Contamination
Control 387,000 7% 240,000 5% 61%
Animal Healthcare 257,000 5% 212,000 5% 21%
Group overseas
sales 5,501,000 100% 4,531,000 100% 21%
The business model employed in the majority of countries in
which we sell products is to use a national distribution partner.
During the year we sold through 36 national distributors. It is
very rare for a national distributor to start its relationship with
Tristel by gaining approval for, and selling, all our Group
products and typically adds in products as its business grows. This
is a source of future organic growth for the Group that is in
addition to revenue growth resulting from the appointment of new
distributors in new markets.
During the year the Group had direct operations in the United
Kingdom, Germany, Switzerland, Austria, Russia, China, Hong Kong
and New Zealand. Within these countries our national sales teams
not only serve customers directly but also manage distributors and
dealers.
Overseas sales by business model
Sales GBP 2014-15 % total 2013-14 % total Yr-on-Yr
Increase
Sales by overseas direct
operations 3,171,000 58% 2,642,000 58% 20%
Sales to overseas distributors 2,330,000 42% 1,889,000 42% 23%
Group overseas sales 5,501,000 100% 4,531,000 100% 21%
Broadly based growth
When Tristel joined the AIM market in June 2005 all its
customers were hospitals and the great majority were located in the
United Kingdom. Since becoming a publicly traded company, and
whilst maintaining its focus on infection control, Tristel has
taken its core competencies and its proprietary chlorine dioxide
chemistry into two additional markets. In 2011 we expanded into the
sterile-packed disinfectants market serving clean rooms in
hospitals and industry (contamination control of critical
environments) and in 2012 we entered the animal healthcare market
focusing primarily on infection prevention in veterinary
practices.
Group sales by portfolio
Sales GBP Yr-on-Yr
2014-15 % total 2013-14 % total increase
Human healthcare 13,089,000 85% 11,518,000 85% 14%
Contamination
control 1,374,000 9% 1,190,000 9% 15%
Animal healthcare 871,000 6% 762,000 6% 14%
Group sales 15,334,000 100% 13,470,000 100% 14%
Human healthcare, or the hospital marketplace, is the most
important component of our business and we expect this to continue
to be the case. Our Contamination control business, which exposes
us to industry in addition to healthcare, is now in its fifth year
of development. Our animal healthcare infection control business is
in its fourth year of development.
High growth in niche markets
Group-wide revenues have grown at a compound annual rate of 18%
over the past decade. This rate of growth has been achieved even in
the face of the loss of over GBP2m of revenues that were generated
from the gastro-enterology area of the UK hospital market which was
our original focus.
Sales 2005 - 2015
FY Sales GBP
2004-5 3,009,000
2005-6 3,746,000
2006-7 5,148,000
2007-8 5,961,000
2008-9 6,847,000
2009-10 8,764,000
2010-11 9,287,000
2011-12 10,939,000
2012-13 10,558,000
2013-14 13,470,000
2014-15 15,334,000
CAGR 18%
In the hospital market we focus today upon two distinct areas of
infection prevention: instrument decontamination in the out-patient
area, and disinfection of critical surfaces. Sales growth within
both of these areas has far exceeded the group-wide CAGR of
18%.
Decontamination of instruments used in the out-patient area
We have moved instrument disinfection revenues away from
gastro-enterology to the out-patient areas of the hospital. We have
achieved this rapid re-positioning of our product portfolio by
innovating with our chlorine dioxide chemistry to create
disinfectant products that are ideally suited to the small medical
instruments used in ENT; cardiology; ultrasound; urology; GI
physiology and ophthalmology.
In these clinical areas there is a constant stream of patients
requiring diagnostic and minor therapeutic procedures for which
clinicians use small instruments that are relatively simple to
decontaminate. We have targeted these niches because they are not
addressed by our competitors. Globally, revenues from these
products have grown at a CAGR of 46% between 2004-5 and
2014-15.
Instrument disinfectant sales in the out-patient area
FY Sales GBP
2004-5 207,000
2005-6 442,000
2006-7 647,000
2007-8 1,178,000
2008-9 1,698,000
2009-10 2,073,000
2010-11 2,552,000
2011-12 4,366,000
2012-13 5,087,000
2013-14 7,329,000
2014-15 9,328,000
CAGR 46%
Disinfection of critical surfaces in hospitals
Tristel's proprietary chlorine dioxide chemistry has two
defining features: first, it kills bacterial spores very quickly;
second, it is safe to use. As a consequence, Tristel's surface
disinfectants provide the most effective stratagem to control
Clostridium difficile, one of the most problematic pathogens in
hospitals. Globally, revenues of our surface disinfectants have
grown at a CAGR of 63% between 2006-7 (when they were first
introduced) and 2014-15.
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Chlorine dioxide surface disinfectant sales
Sales GBP Human health Contamination Group total
control
& Animal
health
FY
2006-7 30,000 - 30,000
2007-8 230,000 - 230,000
2008-9 434,000 - 434,000
2009-10 598,000 - 598,000
2010-11 867,000 - 867,000
2011-12 1,055,000 54,000 1,109,000
2012-13 784,000 54,000 838,000
2013-14 1,229,000 75,000 1,304,000
2014-15 1,363,000 101,000 1,464,000
CAGR 63%
Group Results and Finance
Revenue increased by 14% to GBP15,334,000 (2014:
GBP13,470,000).
Excluding amortisation of intangibles, share-based payments,
interest and results from associates, operating profits increased
by 31% to GBP3,023,000 (2014: GBP2,300,000). Profit before tax for
the year was GBP2,552,000 (2014: GBP1,823,000). The resulting basic
earnings per share were 5.44 pence (2014: 3.25 pence).
Capital investments in the development of new products, patents,
regulatory approvals and computer software resulted in additions to
intangible assets of GBP567,000 (2014: GBP479,000). Purchases of
plant, equipment, improvements to property, fixtures and fittings
and motor vehicles totalled GBP496,000 (2014: GBP677,000).
The level of profit during the year has resulted in cash
balances increasing to GBP4,045,000 as at 30 June 2015 from
GBP2,664,000 at 30 June 2014.
Paul Swinney
Chief Executive
9 October 2015
Tristel plc
Consolidated Income Statement
For the year ended 30 June 2015
---------------------------------
Note Year ended Year ended
30 June 30 June
2015 2014
GBP'000 GBP'000
Revenue 3 15,334 13,470
Cost of sales 3 (4,673) (4,066)
----------- -----------
Gross profit 10,661 9,404
Administrative expenses:
Share-based payments 3 (35) (15)
Depreciation and amortisation 3 (844) (885)
Other 3 (7,241) (6,685)
-------------------------------- ----- ----------- -----------
Total administrative
expenses (8,120) (7,585)
Operating profit 2,541 1,819
Finance income 12 6
Finance costs (9) (10)
Results from equity
accounted associate 8 8
Profit before tax 2,552 1,823
Taxation 4 (337) (551)
----------- -----------
Profit after tax 2,215 1,272
=========== ===========
Attributable to:
Non-controlling interests - (26)
Equity holders of
parent 2,215 1,298
2,215 1,272
=========== ===========
Earnings per share
from total and continuing
operations attributable
to equity holders
of the parent
Basic - pence 6 5.44 3.25
Diluted - pence 6 5.23 3.25
=========== ===========
All amounts relate to continuing operations.
Tristel plc
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2015
------------------------------------------------
Year ended Year ended
30 June 30 June
2015 2014
GBP'000 GBP'000
Profit for the period 2,215 1,272
Other comprehensive
income:
Items that will not be reclassified
subsequently to profit and loss
Exchange differences on
translation of foreign
operations, related to
non-controlling interests - 15
Items that will be reclassified
subsequently to profit and loss
Exchange differences on
translation of foreign
operations (57) 34
----------- -----------
Other comprehensive
income for the period (57) 49
Total comprehensive
income for the period 2,158 1,321
===========
Attributable to:
Non controlling interests - (11)
Equity holders of the
parent 2,158 1,332
2,158 1,321
=========== ===========
Tristel plc
Consolidated Statement of Changes in Equity
For the year ended 30 June 2015
---------------------------------------------
Share Share Merger Foreign Retained Total Non- Total
earnings attributable controlling equity
to owners interests
of the
parent
capital premium reserve exchange
account reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
30 June 2013 400 9,151 478 (127) 1,126 11,028 (151) 10,877
Transactions with
owners
Dividends paid - - - - (272) (272) - (272)
Shares Issued 2 133 - - - 135 - 135
Share-based
payments -
IFRS 2 - - - - 15 15 - 15
Total transactions
with owners 2 133 - - (257) (122) - (122)
Profit for
the year ended
30 June 2014 - - - - 1,298 1,298 (26) 1,272
Other comprehensive
income:- Exchange
differences
on translation
of foreign
operations - - - 34 - 34 15 49
-------- -------- -------- --------- ---------- -------------- ------------- --------
Total comprehensive
income - - - 34 1,298 1,332 (11) 1,321
-------- -------- -------- --------- ---------- -------------- ------------- --------
30 June 2014 402 9,284 478 (93) 2,167 12,238 (162) 12,076
-------- -------- -------- --------- ---------- -------------- ------------- --------
Transactions with
owners
Dividends paid - - - - (752) (752) - (752)
Shares Issued 12 636 - - - 648 - 648
Adjustment
for change
of controlling
interest 3 (172) (169) 169 -
Share-based
payments -
IFRS 2 - - - - 35 35 - 35
Total transactions
with owners 12 636 - 3 (889) (238) 169 (69)
Profit for
the year ended
30 June 2015 - - - - 2,215 2,215 - 2,215
Other comprehensive
income:- Exchange
differences
on translation of
foreign
operations - - - (57) - (57) - (57)
Total comprehensive
income - - - (57) 2,215 2,158 - 2,158
-------- -------- -------- --------- ---------- -------------- ------------- --------
30 June 2015 414 9,920 478 (147) 3,493 14,158 7 14,165
======== ======== ======== ========= ========== ============== ============= ========
Tristel plc
Consolidated Balance Sheet
As at 30 June 2015
----------------------------
2015 2014
Note GBP'000 GBP'000
Non-current assets
Goodwill 667 667
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Intangible assets 5,631 5,637
Property, plant and
equipment 1,347 1,277
Deferred tax 68 83
-------- --------
7,713 7,664
-------- --------
Current assets
Inventories 2,061 2,063
Trade and other receivables 3,194 2,690
Cash and cash equivalents 4,045 2,664
-------- --------
9,300 7,417
-------- --------
Total assets 17,013 15,081
======== ========
Capital and reserves
Share capital 7 414 402
Share premium account 9,920 9,284
Merger reserve 478 478
Foreign exchange reserve (147) (93)
Retained earnings 3,493 2,167
-------- --------
Equity attributable
to owners of the parent 14,158 12,238
-------- --------
Non-controlling interests 7 (162)
-------- --------
Total equity 14,165 12,076
-------- --------
Current liabilities
Trade and other payables 2,434 2,538
Interest bearing loans
and borrowings - 42
Current tax 247 213
-------- --------
2,681 2,793
-------- --------
Non-current liabilities
Interest bearing loans
and borrowings - 8
Deferred tax 167 204
Total liabilities 2,848 3,005
-------- --------
Total equity and liabilities 17,013 15,081
======== ========
Tristel plc
Consolidated Cash Flow Statement
For the year ended 30 June 2015
-----------------------------------
2015 2014
Note GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from
operating activities i 2,936 3,250
Corporation tax (paid)
/ received (324) 21
-------- --------
2,612 3,271
-------- --------
Cash flows used in
investing activities
Interest received 12 6
Purchase of intangible
assets (567) (479)
Purchases of property,
plant and equipment (496) (677)
Proceeds from sale
of property, plant
and equipment 18 72
Net cash used in investing
activities (1,033) (1,078)
-------- --------
Cash flows from financing
activities
Loans repaid (52) (66)
Interest paid (9) (10)
Share issues 648 135
Dividends paid (752) (272)
-------- --------
Net cash used in financing
activities (165) (213)
-------- --------
Net increase in cash
and cash equivalents 1,414 1,980
Cash and cash equivalents
at the beginning of
the period ii 2,664 627
Exchange differences
on cash and cash equivalents (33) 57
-------- --------
Cash and cash equivalents
at the end of the period ii 4,045 2,664
======== ========
Tristel plc
Notes to the Consolidated Cash Flow Statement
For the year ended 30 June 2015
-----------------------------------------------
i. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED
FROM OPERATIONS
2015 2014
GBP'000 GBP'000
Profit before tax 2,552 1,823
Depreciation of plant,
property & equipment 397 416
Amortisation of intangible
assets 447 469
Results from associates (8) (8)
Share-based payments
- IFRS2 35 15
Profit on disposal of property,
plant and equipment (3) (12)
Loss on disposal of
intangible asset 125 5
Finance costs 9 10
Finance income (12) (6)
3,542 2,726
Decrease/(increase)
in inventories 2 (195)
Increase in trade and
other receivables (504) (136)
(Decrease)/increase
in trade and other payables (104) 855
Cash generated from
operations 2,936 3,250
========== =========
ii. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow statement in respect of
cash and cash equivalents are in respect of these balance sheet
amounts.
30 June 30 June
2015 2014
Year ended 30 June GBP'000 GBP'000
2015
Cash and cash equivalents 4,045 2,664
4,045 2,664
======================= =======================
30 June 30 June
2014 2013
Year ended 30 June GBP'000 GBP'000
2014
Cash and cash equivalents 2,664 627
2,664 627
======================= =======================
1. ACCOUNTING POLICIES
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU).
Changes in accounting policies
The Group on 1 July 2014 adopted:
IFRS 10 - Consolidated financial statements
IFRS 12 - Disclosure of interests in other entities
IAS 27 - Separate financial statements
This resulted in the Group changing its accounting policy for
the basis of consolidation and definition of control, but has had
no further impact on the 2015 financial statements.
Basis of consolidation
The Group financial statements consolidate those of the Company
and all of its subsidiary undertakings drawn up to 30 June 2015.
Subsidiaries are entities over which the Group has rights or is
exposed to variable returns from its involvement with the investee
and has the power to affect those returns by controlling the
financial and operating policies so as to obtain benefits from its
activities. The Group obtains and exercises control through voting
rights.
Unrealised gains on transactions between the Group and its
subsidiaries are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the
asset transferred. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the acquisition
method. The acquisition method involves the recognition at fair
value of all identifiable assets and liabilities, including
contingent liabilities of the subsidiary, at the acquisition date,
regardless of whether or not they were recorded in the financial
statements of the subsidiary prior to acquisition. These fair
values are also used as the basis for subsequent measurement in
accordance with the Group accounting policies. Goodwill is stated
after separating out identifiable intangible assets. Goodwill
represents the excess of the aggregate of the consideration
transferred and the amount of non-controlling interest over the
fair value of the Group's share of the identifiable net assets of
the acquired subsidiary at the date of acquisition.
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Non-controlling interests, presented as part of equity,
represent a proportion of a subsidiary's profit or loss and net
assets that is not held by the Group. The Group attributes total
comprehensive income or loss of subsidiaries between the assets of
the parent and the non-controlling interests based on their
respective ownership interests
There was a change in controlling interest in the period related
to the Group's ownership of Tristel Asia and Tristel Medical
Equipment Co Ltd, the step acquisition makes both entities wholly
owned. There was an immaterial amount of consideration arising upon
acquisition. The difference between the non-controlling interest
and the fair value of the consideration paid is recognised directly
in equity attributable to the parent.
EU adopted IFRSs not yet applied
As of 30 June 2015, the following Standards and Interpretations
are in issue but not yet effective and have not been adopted early
by the Group:
-- IFRS 9 Financial Instruments (IASB effective date 1 January 2018)
-- IFRS 15 Revenue from Contracts with Customers (effective 1 January 2017)
-- Clarification of Acceptable Methods of Depreciation and
Amortisation - Amendments to IAS 16 and IAS 38 (IASB effective date
1 January 2016)
-- Annual Improvements to IFRSs 2010-2012 Cycle (EU effective 1 February 2015)
-- Annual Improvements to IFRSs 2011-2013 Cycle (EU effective 1 February 2015)
-- Annual Improvements to IFRSs 2012-2014 Cycle (effective 1 January 2016)
-- Amendments to IAS 27: Equity Method in Separate Financial
Statements (effective 1 January 2016)
-- Disclosure Initiative: Amendments to IAS 1 Presentation of
Financial statements (effective 1 January 2016)
The Directors anticipate that the adoption of these standards
and interpretations in future periods will have no material effect
on the financial statements of the Group.
2. PUBLICATION NON-STATUTORY ACCOUNTS
The financial information set out in this Audited Preliminary
Announcement does not constitute the Group's statutory accounts for
the years ended 30 June 2015 or 2014, as defined in Section 435 of
the Companies Act 2006, but is derived from those accounts.
Statutory accounts for the year ended 30 June 2014 have been
delivered to the Registrar of Companies, and those for 2015 will be
delivered in due course. The auditors Grant Thornton UK LLP have
reported on those accounts; their reports were (1) unqualified,
(ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The Board of Tristel plc approved the release of this audited
Preliminary Announcement on 9 October 2015.
3. SEGMENTAL ANLAYSIS
Management considers the Group's revenue lines to be split into
three operating segments, which span the different Group entities.
The operating segments consider the nature of the product sold, the
nature of production, the class of customer and the method of
distribution. The Group's operating segments are identified from
the information which is reported to the chief operating decision
maker.
The first segment concerns the manufacture, development and sale
of infection control and hygiene products which includes products
that incorporate the Company's chlorine dioxide chemistry, and are
used primarily for infection control in hospitals ("Human
Healthcare"). This segment generated approximately 85% (2014: 85%)
of Group revenues.
The second segment, which constitutes 5.6% (2014: 5.6%) of the
business activity, relates to manufacture and sale of disinfection
and cleaning products, into veterinary and animal welfare sectors
("Animal healthcare"). During prior years all sales for this
segment were made to a distributor who supplied the end user.
The third segment addresses the pharmaceutical and personal care
product manufacturing industries ("Contamination control") and has
generated 9.4% (2014: 9%) of the Group's revenues this year.
The operation is monitored and measured on the basis of the key
performance indicators of each segment, these being revenue and
gross profit, and strategic decisions are made on the basis of
revenue and gross profit generating from each segment.
Human Animal Contamination Group Human Animal Contamination Group
Healthcare Healthcare Control 2015 Healthcare healthcare Control 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
from
external
customers 13,089 871 1,374 15,334 11,518 762 1,190 13,470
--------------
Segment
revenues 13,089 871 1,374 15,334 11,518 762 1,190 13,470
Cost of
material 3,663 314 696 4,673 3,216 255 595 4,066
Gross
Profit 9,426 557 678 10,661 8,302 507 595 9,404
=========== =========== ============== ======== =========== =========== ============== ========
Gross
Profit % 72% 64% 49% 70% 72% 67% 50% 70%
Centrally incurred income and expenses not attributable to individual
segments:
Share based payments (35) (15)
Depreciation and amortisation of
non-financial assets (844) (885)
Other administrative
expenses (7,241) (6,685)
Segment operating
profit/(loss) 2,541 1,819
======== ========
Segment operating profit can be reconciled to Group
profit before tax as follows:
Segment operating profit/(loss) 2,541 1,819
Finance income 12 6
Finance costs (9) (10)
Results from equity accounted associate 8 8
Group profit/(loss) before tax 2,552 1,823
======== ========
The Group's revenues from external customers are divided into
the following geographical areas:-
Human Animal Contamination Group Human Animal Contamination Group
Healthcare Healthcare Control 2015 Healthcare healthcare Control 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
United
Kingdom 8,232 614 987 9,833 7,439 550 950 8,939
Rest
of the
World 4,857 257 387 5,501 4,079 212 240 4,531
----------- ----------- -------------- --------- ----------- ----------- -------------- ---------
Group
revenues 13,089 871 1,374 15,334 11,518 762 1,190 13,470
=========== =========== ============== ========= =========== =========== ============== =========
Revenues from external customers in the Group's domicile -
"United Kingdom", as well as its other major markets, "Rest of the
World" - have been identified on the basis of internal management
reporting systems, which are also used for VAT purposes.
Human healthcare revenues were derived from a large number of
customers, including GBP4.081m from a single customer which makes
up 31% of this segment's revenue (2014: GBP3.499m being 30%).
Animal healthcare revenues were derived from a number of customers,
with the largest customer accountable for GBP0.309m, which
represents 35% of revenue for that segment (2014: GBP0.209m 27%
from a single customer).
During the year 26.6% of the Group's total revenues were earned
from a single customer (2014: 26%).
The Group's non-current assets are divided into the following
geographical areas and by segment:-
2015 2014 2015 2014
Geography GBP'000 GBP'000 Segment GBP'000 GBP'000
United Kingdom 7,544 7,455 Human Healthcare 4,863 4,706
Rest of the World 101 126 Animal Healthcare 2,510 2,510
Contamination Control 272 365
Non-current assets 7,645 7,581 7,645 7,581
======== ======== ======== ========
4. TAXATION
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