TIDMTSTL
RNS Number : 5112W
Tristel PLC
26 April 2021
Tristel plc
("Tristel" or the "Company")
Trading Update
Tristel plc (AIM: TSTL), the manufacturer of infection
prevention and contamination control products utilising proprietary
chlorine dioxide chemistry, provides the following trading
update.
As explained in our half-year report of February, second half
sales in all markets started very slowly because of the impact of
COVID-19 on patient examinations. In the UK, this trend has
continued through our third quarter to 31 March and shows little
sign of reversing meaningfully before year-end.
Whilst medical device disinfectant sales in the UK are
significantly impacted by activity levels in the NHS, surface
disinfectant product sales have continued to gain market share and
UK sales for this product range to end of third quarter were
GBP2.3m, 47% higher than in the same period last year.
Very encouragingly, at the end of the third quarter, sales of
our 13 overseas subsidiaries and to our international distributor
network have increased by 7% over the comparable period last
year.
Combining our medical device and hospital surface disinfectants
in both our home and overseas markets into a year-end outlook, we
now expect global sales to exceed GBP31m, which is comparable with
last year. This predicted outcome reflects a transient difficulty
in the UK, caused by the impact of COVID-19 on patient
examinations. We expect the situation to correct next year.
The departments and types of treatment that we focus upon are
experiencing many of the longest NHS waiting times. NHS sources
quoted recently in the Press(1) state the total numbers of people
waiting for examinations in ENT is circa 366,000; ophthalmology
494,000; urology 270,000; cardiology 194,000, and gynaecology
265,000. These departments account for most of our medical device
disinfectant product sales, and they also represent the highest
patient waiting numbers in UK hospitals outside of orthopaedics,
trauma, and general surgery. We understand that the NHS is making
available a GBP1.5bn(2) Elective Recovery Fund to accelerate the
restoration of services and treatment for as many people as
possible.
Looking out to next financial year, we expect demand conditions
in the UK to improve significantly. However, in these uncertain
times we believe that we must take a cautious approach. Whilst our
global revenues continue to diversify away from the UK, our home
market remains our largest exposure to one healthcare system. The
NHS 2021/22 priorities and operational planning guidance published
on 25 March 2021 states
"While [the vaccination programme] gives us cause for optimism,
we do not yet know what the pattern of COVID-19 transmission will
look like over the next 12 months and it is clear that the impact
of the last year will be felt throughout 2021/22 and beyond."
Whist this year has been challenging, we have a strong balance
sheet and have continued to build our team in preparation for
future expansion. Accordingly, our cost base has risen during the
year by approximately GBP0.8m, or 6%, excluding our investment in
our North American regulatory programme. Given the scale of the
opportunity in the United States, we have intensified our focus on
our FDA and EPA regulatory programme and by year-end will have
spent GBP750,000 in generating the scientific data required by the
agencies compared to GBP80,000 last year. We will provide a
detailed update with our year end results.
The consequence of sales being lower than anticipated in the
year to 30 June 2021, at a gross profit margin of 80%, and a cost
base that has increased, is that pre-tax profit (before share-based
payments) is now expected to be not less than GBP5m.
Balance sheet and dividends
Our cash position of GBP8m gives us security and stability. The
interim dividend of GBP1.2m (2.62 pence per share) will be
disbursed at the end of April as detailed in the half year
report.
The expectation for the final dividend is 3.93 pence, giving a
total of 6.55p for the year. The Board commits to make a final
dividend payment at this level irrespective of the level of
year-end profit.
Outlook
We remain very confident that sales and profits growth will
resume next year and the investments that we have made in people,
systems and new market registrations will lay the foundation stones
for strong growth in the years ahead.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Notes
(1)
https://www.thetimes.co.uk/article/covid-pushes-nhs-treatment-waiting-list-to-4-7-million-vh762fj79
(2) 2021/22 priorities and operational planning guidance 25
March 2021. Publication approval reference: PAR468
For further information please contact:
Tristel plc Tel: 01638 721 500
Paul Swinney, Chief Executive
Officer
Liz Dixon, Finance Director
Walbrook PR Ltd Tel: 020 7933 8780 or tristel@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07854 391 303
finnCap Tel: 020 7220 0500
Geoff Nash / Giles Rolls, Corporate
Finance
Alice Lane, ECM
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END
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