TIDMTSTL
RNS Number : 7686F
Tristel PLC
25 February 2015
TRISTEL plc
("Tristel" or the "Company")
Half Yearly Report
Unaudited Interim Results for the six months ended 31 December
2014
Tristel plc (AIM: TSTL), the manufacturer of infection
prevention, contamination control and hygiene products, announces
its interim results for the six months ended 31 December 2014.
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
-- Revenue up 15% to GBP7.4m (2013: GBP6.4m)
-- International sales up 26% to GBP2.4m (2013: GBP1.9m)
-- Pre-tax profit before share based payments up 57% to GBP1.1m (2013: GBP0.7m)
-- EBITDA up 25% to GBP1.5m (2013: GBP1.2m)
-- Basic EPS up 85% to 1.91p (2013: 1.03p)
-- Interim dividend of 0.585p per share (2013: 0.36p), an increase of 63%
-- Cash generative, with net cash at period end of GBP2.9m (2013: GBP1.5m)
Commenting on current trading, Paul Swinney, Chief Executive of
Tristel, said:
"Tristel has enjoyed another strong performance during the first
half. Encouragingly, this has come from all areas of the business,
both in the UK and overseas. Our operations in Germany, China and
Hong Kong, and Australasia, where we have our own people on the
ground, are developing particularly well.
"The balance sheet and cash flow are very sound and we are well
placed to continue the growth of our business."
Tristel plc www.tristel.com
Paul Swinney, Chief Executive Tel: 01638 721 500
Liz Dixon, Finance Director
finnCap
Geoff Nash / Charlotte Stranner, Tel: 020 7220 0500
Corporate Finance
Stephen Norcross, Corporate Broking
Walbrook PR Ltd Tel: 020 7933 8780 or tristel@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07854 391 303
Chairman's statement
This is our tenth year as a public company and I am delighted to
be back at the helm as Chairman, albeit on an interim basis.
The first half has been an excellent one for Tristel. The
business has now achieved record sales in each consecutive six
month period since December 2012. Encouragingly during the first
half the growth has come from all areas of the business, both in
the United Kingdom and overseas.
Investment for future growth
I have been with this business from the start and continue to be
its largest shareholder. I remain convinced, as I was when I first
encountered the investment opportunity some twenty years ago, that
Tristel's chlorine dioxide technology represents a global
opportunity. It addresses neglected areas of infection prevention
within our hospitals and it improves patient safety and the work
environment of hospital staff. Our vision is still to gain global
recognition for our technology as the outstanding biocide for the
decontamination of medical devices used in ambulatory care, and for
critical surfaces within hospitals.
It is important for our Board to make clear the central themes
of our strategy. They are to focus upon healthcare, to sell
consumable products that perform essential functions for users at
attractive margins whilst remaining a high growth business. If we
achieve all these things we will be a profitable business
generating superior net margins and return on capital exceeding
those of our peers.
We have re-calibrated one of our key strategic financial goals
to grow revenue by at least 50% over the next three years from the
base line of GBP13.5m achieved in 2013-14. We have previously
expressed this as a straight-line year-by-year goal. If we achieve
this level of revenue growth and maintain careful control of our
cost base, as we have during the past two years, our pre-tax margin
will exceed our strategic goal of 15%. But by maintaining the
target at 15% over the medium term it affords the Company the
flexibility to invest in new products and markets, including, when
we are ready for the challenge, North America, to secure long term
sustainable growth and achieve our objective of establishing a
global footprint for Tristel's technology.
Management is focussing on establishing a firm foundation for
the next phase of future growth. We are in the process of both
upscaling and upskilling our business.
Over the last 18 months we have invested GBP400,000 in creating
20,000 sq ft of new factory, office and warehouse space. The new
facility was completed by the end of September 2014 and officially
opened on 2October 2014. The investment programme for this
expansion is now complete. During the first half of this year we
have invested in the acquisition and implementation of a new
enterprise resource planning information system. The capital and
revenue investment will total GBP160,000 by the time it is
completed. The first implementation has successfully taken place in
our German operation and will have been rolled out across the Group
by the end of the financial year. The investment in this programme
will then be complete. Investment is also being made in our
business development teams in the United Kingdom and in our
overseas direct operations, recruiting the next generation of
highly qualified individuals to help our senior management team
drive the future development of the business.
Regulatory environment in Europe
The regulatory environment within Europe's biocides industry is
going through a period of significant change. The Biocidal Products
Regulation (BPR) is seeking to harmonise the European market for
biocidal active substances and products containing them. The
investment required by us over the next three to five years to meet
the new regulations will be substantial and will be charged against
our profits, but we are a well-resourced business, both in terms of
our balance sheet and our skill-base, and we can meet the upcoming
challenge. The same is probably not true of many of our smaller
competitors and as such there is a significant opportunity for
Tristel to gain market share over the coming years.
We are mid-stream in an extensive review of the Group's entire
product portfolio so that we can establish where our investment in
active substances is best placed. We do not formulate and
manufacture products using only our proprietary chlorine dioxide
chemistry and we have to evaluate where our involvement in other
biocidal (non-chlorine dioxide) actives will make future economic
sense. A rationalisation of our portfolio of chemistries may be the
result. The objective will be to minimise the investment required
to comply with regulations, whilst maintaining revenues via the
substitution of non-chlorine dioxide with chlorine dioxide
products. Our industry expects the BPR process to take many years
to complete. We will report upon progress at the time of our
preliminary results in October.
Results
Turnover has increased by 15% from the same period last year to
GBP7.4m (2013: GBP6.4m). EBITDA has increased by 25% to GBP1.5m
(2013: GBP1.2m) and profit before tax and share based payments has
increased 57% to GBP1.1m (2013: GBP0.7m). Our conversion of profit
to cash remained strong during the period and net cash increased
from GBP2.6m at 30 June 2014 to GBP2.9m at 31 December 2014, after
capital expenditure of GBP0.5m and payment of dividends amounting
to GBP0.5m.
Dividends
In October 2011, when we were in the midst of the re-shaping of
our product portfolio that was essential to survive the decline in
our legacy endoscopy business, we stated that our dividend policy
would be two times cover after profits returned to GBP1.5m, which
they now have. We also stated that the interim dividend would be
one-quarter of our expectation for the full year pay-out.
The cash generative nature of our business is clearly
demonstrated by these interim results and those of last year. My
philosophy is that the business should return to shareholders cash
which is not required for future earnings enhancing investment. For
now we will maintain our policy and we are declaring an interim
dividend of 0.585 pence, payable on 13 April 2015 to shareholders
on the register at 27 March 2015. The corresponding ex-dividend
date is 26 March 2015. This compares to the interim dividend of
0.36 pence last year, and represents an increase of 63%. We will
review both our policy and cash requirements of the business at the
time of our preliminary results in October.
Outlook
Tristel has a resilient business model based upon repeat use
consumable product sales. The business has a good geographical
spread which will only expand further as we establish
distributorships in more countries. We have a proprietary
technology that is supported by widespread patent protection with
nearly 100 patents granted (and many more pending) in countries
representing two-thirds of the world's population. We have a strong
balance sheet and remain both profitable and cash generative.
Finally, we have the people, experience of our industry and
physical resources to make further progress this year and into the
foreseeable future.
Francisco Soler
25 February 2015
CONDENSED CONSOLIDATED INCOME STATEMENT
Tristel (LSE:TSTL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tristel (LSE:TSTL)
Historical Stock Chart
From Apr 2023 to Apr 2024
