TIDMTSTL
RNS Number : 3868C
Tristel PLC
19 October 2020
Tristel plc
("Tristel", the "Company" or the "Group")
Final Results
Results for the year ended 30 June 2020
Tristel plc (AIM: TSTL), the manufacturer of infection
prevention and contamination control products, announces its
audited results for the year ended 30 June 2020. The Group has
delivered a solid performance, achieving both growth in revenue and
pre-tax profit, coupled with high cash generation.
Financial Highlights
-- Turnover up 21% to GBP31.7m (2019: GBP26.2m)
-- Overseas sales up 32% to GBP19m (2019: GBP14.4m),
representing 60% of total sales (2019: 55%)
-- Gross margin increased to 80% from 79% in 2019
-- Pre-tax profit before share-based payments up 27% to GBP7.1m
(2019: GBP5.6m). Unadjusted GBP6.6m (2019: GBP4.7m)
-- Pre-tax margin before share-based payments increased to 22%
(2019: 21%). Unadjusted 21% (2019: 18%)
-- EPS before share-based payments up 11% to 12.35p (2019:
11.08p). Unadjusted up 25% to 11.38p (2019: 9.14p)
-- Dividend per share for the full year increased by 12% to
6.18p (2019: 5.54p)
-- Strong operating cashflow of GBP7m (2019: GBP5.5m)
-- Net cash of GBP6.2m (2019: GBP4.2m)
Operational Highlights
-- Successful integration of Tristel Italia srl, acquired for
GBP0.6m in July 2019
-- Additional 23,000 sq. ft. warehouse and office building
completed and occupied
-- Progress towards North American market entry, with continuing
data generation for FDA submission, a supplemental submission made
to the EPA to improve label claims for two products already
approved, and first submission made to Canada Health
-- Regulatory approval received in India for Tristel Duo for
Ultrasound. The Company is in late stage negotiations with GE
Healthcare India and Genworks Health, a Wipro GE investee company,
for the two companies to distribute Duo and other approved Tristel
products throughout the country. National distribution agreement
signed with GE Healthcare Russia for ultrasound market
Paul Swinney, Chief Executive of Tristel plc, said: "We
delivered another very sound performance in a year turned on its
head by COVID-19, the impact of which was a reduction of GBP0.5m in
medical device decontamination sales and an increase of GBP2m in
hospital surface disinfectant sales.
"During the first quarter of the current financial year we have
experienced a gradual recovery in demand for our medical device
products in all our markets as hospitals resume levels of non-COVID
care. Since February, we have acquired a significant number of
hospital customers for our surface disinfectant products. We expect
this build-up of our hospital surface disinfection business to
continue throughout this and future years. It is a key strategic
focus of the Company
"All our twelve overseas subsidiaries had record years. Together
with the contribution of our 35 international distributors, 60% of
global revenue was generated outside of the United Kingdom - the
highest level ever. Our Malaysian subsidiary started trading in
July and we will commence sales in India this year. We have made
our first submission for regulatory approval to Health Canada, and
we are progressing well with our FDA submission. International
expansion will continue to be a key growth driver for the
Group.
"We must recognise that further lockdowns, whether in the UK or
in any of our other major markets, might temporarily interrupt our
Group's forward momentum, but our business model has shown its
resilience during the past nine months, and we remain optimistic
for the year's trading outlook."
For further information:
Tristel plc
Paul Swinney, Chief Executive Tel: 01638 721 500
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 Tel: 020 7600 1658
Geoff Nash/ Giles Rolls (Corporate
Finance)
Alice Lane (ECM)
Chairman's Statement
The Group continued to develop strongly during the year to 30
June 2020. Sales grew to GBP31.7m from GBP26.2m in 2019, an
increase of 21%. The proportion of our revenue generated in
overseas markets continued to increase and reached 60% in the year
(2019: 55%). Overseas sales grew by 32% whilst UK sales grew by 7%.
This difference in the pace of growth, across our various markets,
reflects the higher market penetration in the United Kingdom than
so far achieved in overseas markets.
In last year's Annual Report, we described our future direction
as a Group that will continue to concentrate on our proprietary
chlorine dioxide technology, broadening its application to the
cleaning and disinfection of environmental surfaces in hospitals,
alongside our core activity which is the use of our chemistry for
the high-level disinfection of medical devices.
The final four months of our financial year were impacted
significantly by COVID-19. During this period, we experienced two
powerful countervailing forces: 1) a decline in the use of our
medical device decontamination products as hospitals worldwide
postponed all but the most critical patient appointments to free up
resources to deal with COVID-19 related cases, and 2) a surge in
purchasing and use of our hospital environmental surface
disinfection products. The decision to develop a broad surface
disinfection product range for hospitals and our preparations to
launch it during the 2021 financial year, which were well under way
when COVID-19 was declared a pandemic, enabled us to balance the
decline in revenues in the core part of business with an increase
in revenues in our new initiative.
During the March to June period, when the impact of COVID-19 was
at its greatest, global sales were GBP11.8m compared to GBP9.1m in
the same period last financial year, an increase of 30%. Medical
device decontamination product sales accounted for 74% of global
sales in this period, whilst sales of hospital surface disinfection
products accounted for 15%. Tristel estimates that COVID-19
resulted in a reduction of GBP0.5m in medical device
decontamination product sales and an increase in sales of hospital
surface disinfection products of GBP2m above the underlying
trend.
As can be seen, Tristel was able to navigate its way through the
early COVID-19 crisis by mitigating the fall in demand for its
primary product portfolio by a rapid increase in supply of its
hospital surface disinfection products. The Group has invested
heavily over the past three years to create a product portfolio for
hospital surface disinfection and has given the portfolio a
different brand name, the Cache Collection. Whilst anchored upon
Tristel's proprietary chlorine dioxide chemistry, Cache
incorporates other cleaning and disinfection chemistries widely
used in hospitals. The key theme of the Cache proposition is a
powerful environmental and ecological message. In the run up to
March, the Group had been building its inventory of Cache product
components in preparation for a full-scale launch towards the end
of this year. Tristel was thereby able to take advantage of
unprecedented buying by hospitals of all types of disinfectant
products in several geographical markets where the Group had
already obtained necessary regulatory approvals. These markets were
principally the United Kingdom, Belgium, the Netherlands, France,
Hong Kong, and China. The COVID-19 experience has validated the
Cache proposition and accelerated the rate of customer acquisition
beyond the Company's pre-pandemic business plan.
COVID-19 has provided an extreme stress test of the Group's
manufacturing capability and supply chain management, and it has
performed very well in both regards. The Group was able to meet all
demand for products, particularly its surface disinfectant
products, at a time when many suppliers to hospital systems
worldwide were unable to satisfy the sudden surge in demand.
The Group's subsidiaries in the UK, Belgium, the Netherlands,
France, Germany, Switzerland, Italy, Russia, Hong Kong, China,
Australia and New Zealand all achieved record sales levels.
Stand-out performances were delivered by France where sales tripled
to reach GBP1.8m, and China where sales more than doubled to nearly
GBP0.5m. Tristel Malaysia was incorporated in February 2020 and
started operation on 1 July 2020 with a team of three who had
previously worked for Tristel's distributor in the country.
Pre-tax profit before share-based payments (referred to as
adjusted) was GBP7.1m compared to GBP5.6m last year, an increase of
27%; the unadjusted pre-tax profit of GBP6.6m compared to GBP4.7m
last year, an increase of 40%. Our adjusted pre-tax profit margin,
which is a key measure of our performance, was 22% (2019: 21%). The
unadjusted pre-tax profit margin increased to 21% from 18% in 2019.
Adjusted earnings per share (EPS), was 12.35 pence, up from 11.08
pence last year (see note 6). Basic EPS was 11.38 pence, a 25%
increase from last year, after a share-based payment charge of
GBP0.435m (2019: GBP0.852m). This charge is a non-cash item.
The Group has continued to be highly cash generative and on 30
June 2020 the cash balance was GBP6.2m (2019: GBP4.2m). During the
year, the Group spent GBP0.6m to acquire 80% of Tristel Italia Srl
from its local management. In line with the Company's ordinary
dividend policy, the Board is recommending that the final dividend
is 3.84 pence (2019: 3.50 pence), an increase of 10%. Including the
interim dividend of 2.34 pence (2019: 2.04 pence), and the proposed
final dividend, the total dividend for the year will be 6.18 pence
(2019: 5.54 pence), an increase of 12%.
We continued to invest for future growth. During the year we
spent GBP0.4m on product development and testing (2019: GBP0.4m)
and GBP0.1m on intellectual property protection (2019: GBP0.2m).
Both these expenditures are held in intangible assets. We invested
GBP0.5m (2019: GBP0.7m) in regulatory and product enhancement
programmes where we have recognised this cost as an expense.
Included in this cost is an amount of GBP0.08m (2019: GBP0.5m)
relating to our initiative to enter the United States market which
commenced in 2014. The cumulative investment in this regulatory
project and in the establishment of a commercial structure within
the country now totals GBP1.78m.
Whilst no revenues have yet been generated from the United
States, significant progress has been made to build a commercial
platform from which to enter the market. During the year we
continued to generate data required for a submission which we
intend to make to the Food and Drug Administration (FDA) to obtain
pre-market approval for our foam-based Duo product as a high-level
disinfectant for medical devices. We have already received
approvals from the Environmental Protection Agency (EPA) for Duo.
We have entered into a partnership with Parker Laboratories based
in New Jersey which puts in place both manufacturing capability and
a national distribution network. We do not yet have employees in
the United States but have established a subsidiary.
I succeeded Paul Barnes as Chairman at last December's Annual
General Meeting. To further develop our Board of Directors we
appointed Isabel Napper as an independent Non-Executive Director in
May and I expect us to further develop the diversity, experience
and abilities of our Board this year.
My first six months as Chairman have been marked by an
unprecedented event - the worldwide viral pandemic COVID-19. I
believe that the Group has successfully navigated its way through a
turbulent final four months of the year in which hospitals
worldwide have had to deal with patients of this infectious
disease.
We will undoubtedly live through the current year with COVID-19
still present and affecting our business. I am greatly encouraged
that our business model has proven to be resilient to these
powerful external forces and believe that our strategic focus will
sustain our continued progress.
Dr Bruno Holthof
Chairman
16 October 2020
Chief Executive's Report
Overview
Group revenue was up 21%, adjusted pre-tax profit was up 27%
(pre-tax profit up 40%) and adjusted EPS was up 11% (basic EPS up
25%). We ended the year with cash of GBP6.2m. The Group is
debt-free.
In October 2019, we set a new financial plan for the three years
to 30 June 2022. The three key financial targets of the plan were:
i) sales growth in the range of 10% to 15% per annum as an annual
average over the three years; ii) the achievement in each year of
an EBITDA margin (excluding share-based payment charges) of at
least 25%, (both targets became Key Performance Indicators (KPIs)
of the Group), and iii) to increase profit before tax (excluding
share-based payments) year-on-year, independently of the other two
KPI's.
The above KPI's were exceeded and PBT before share-based
payments increased by 27%.
For the past nine years we have presented our business
activities by segmenting them into three brand portfolios
addressing three markets. These are infection prevention in
hospitals under the brand name Tristel; infection prevention in
animal healthcare under the brand name Anistel, and contamination
control in critical environments under the brand name Crystel. This
year, we break from this tradition and report upon three different
revenue segments being: a) medical device decontamination in
hospitals; b) environmental surface disinfection in hospitals, and
c) other revenues. The latter derive from our animal healthcare
product range and contamination control product range and a
miscellaneous group of other applications and users of our
products. During the year, revenues by portfolio brand were GBP29.3
(2019: GBP24.2m) for Tristel, GBP1.0m (2019: GBP0.8m) for Anistel,
and GBP1.4m (2019: GBP1.2m) for Crystel.
The new segmental reporting reflects our strategic direction
which is to focus on our proprietary chlorine dioxide technology,
broadening its application to the cleaning and disinfection of
environmental surfaces in hospitals, alongside our core activity
which is the use of our chemistry for the high-level disinfection
of medical devices. We have developed a distinctly different brand
for our hospital environmental surface products. The brand name is
Cache. There are Tristel branded surface disinfection products that
will migrate over during the current financial year to the Cache
brand. Our strategic intention is to develop the Tristel and Cache
brands and product portfolios with a significant degree of
independence from each other, but both being anchored upon our
chlorine dioxide technology platform and using the same sales force
in all countries.
During the year, the revenue split across the three segments
was:
Financial year GBPm Brand 2018-19 2019-20
Medical device decontamination
in hospitals Tristel 20.80 23.50
Environmental surface disinfection
in hospitals Cache 2.60 4.90
Crystel, Anistel
Other - non-core & Miscellaneous 2.80 3.30
Group 26.20 31.70
Our strategic emphasis on environmental surface disinfection
chimes well with the likely aftermath and legacy of COVID-19 which
will be that hospitals worldwide will enhance their cleaning and
disinfection practices. The rapid increase in surface disinfection
product sales during the last four months of the year supported our
thesis that achieving a better balance between our two key revenue
contributors will produce a more resilient business model.
The proportion of our revenue generated in overseas markets
continued to increase and reached 60% in the year (2019: 55%). This
is a well-established trend and we expect it to continue. Our
overseas rate of sales growth has been consistently higher than the
UK rate of sales growth and we expect this to continue. During the
year overseas sales grew by 32% whilst UK sales grew by 7%. The
history over the past five years is shown in the table below.
Financial year 2015-16 2016-17 2017-18 2018-19 2019-20
Revenue split %
United Kingdom 61% 53% 49% 45% 40%
Overseas 39% 47% 51% 55% 60%
Annual revenue
growth %
United Kingdom 5% 3% 2% 9% 7%
Overseas 22% 43% 19% 26% 32%
We are heavily exposed to the global healthcare system and in
the current social and economic environment, dominated by a global
pandemic, our geographical diversity is a strategic strength. We
have seen countries emerge from lockdown and their health systems
resume out-patient and elective procedures at differing times. We
can expect countries to re-enter lockdown in an unsynchronised way
too.
In July, we acquired 80% of the share capital of Tristel Italia
Srl, bringing this company under our complete ownership and
control. We now have fourteen subsidiaries selling directly into
the hospital marketplace in the United Kingdom, Belgium, the
Netherlands, France, Italy, Germany, Switzerland, Poland, Russia,
Hong Kong, China, Malaysia, Australia, and New Zealand. We have
subsidiaries in the United States, Japan, India and Ireland which
are not yet active in terms of selling.
All active subsidiaries achieved record sales levels during the
year. Stand-out performances were delivered by France where sales
tripled to reach GBP1.8m, and China where sales more than doubled
to nearly GBP0.5m. Tristel Malaysia was incorporated in February
2020 and started operation on 1 July 2020 with a team of three who
had previously worked for Tristel's distributor in the country.
At 30 June 2020, the Group-wide average headcount was 164 (2019:
142). Of these employees, 106 are located in the United Kingdom
(2019: 92); 33 are located in Europe (2019: 32); and 25 are located
in the Asia and Pacific region (2019: 19). All manufacturing takes
place in the United Kingdom, apart from the sub-contracted
manufacture in New Zealand of components for the Stella medical
device reprocessing system and their assembly by our operation in
Tauranga, North Island.
Our business: What our marketplace looks like
Our entire business is focussed on preventing the transmission
of microbes from one object or person to another. We pursue this
purpose because microbes can be a source of infection to humans and
animals. They can cause illness or death and place a heavy cost on
individuals and society. We achieve our purpose by applying a very
powerful disinfectant - chlorine dioxide - to the target
environmental surface or medical instrument. We are unique
worldwide in using chlorine dioxide as a high-performance
disinfectant. We are also one of a very few companies worldwide
that can legitimately claim to be exclusively an infection
prevention business.
Our mission is most relevant to hospitals where the risks of
infection to individuals are highest.
A hospital is a vast, multi-faceted organisation. We are not
only unique in providing chlorine dioxide as a high-performance
disinfectant within hospitals, but we are also unique in our focus
upon specific clinical departments within them. We target clinical
departments that carry out diagnostic procedures with small
heat-sensitive medical instruments. These include: the nasendoscope
used in Ear, Nose and Throat departments; the laryngoscope blade
used in emergency medicine; tonometers used in ophthalmology, and
ultrasound probes used in both women and men's health. In these
departments, we are the only simple to implement, affordable,
high-performance disinfection method available. Consequently, in
geographical markets in which we have been present for some time,
we hold a truly significant market share.
Infection prevention is a basic requirement for the safe and
effective provision of healthcare. This is true in all hospitals in
all countries. Our primary focus is on the acute hospital, but the
trend is for medical device procedures to take place outside of the
hospital, and the pool of opportunity for the sale of our products
can be expected to expand substantially over the long term.
The cleaning and disinfection of environmental surfaces in
hospitals is ubiquitous. We expect the legacy of COVID-19 to be
that hospitals will be more rigorous in their selection of the best
performing and most scientifically validated disinfectant products,
which will benefit our Company, and that the frequency of cleaning
and disinfection practice will increase. The two influences will
result in greater expenditure by hospitals on environmental
disinfection. We believe that macro trends impacting our Cache
initiative are generally positive.
How We Service Our Market
Over 98% of our revenues are of repeat consumable products that
perform a vital function in hospitals. Their use is for the most
part non-discretionary. Our products are typically small packaged
goods, requiring no after sales service, other than comprehensive
training. Capital sales, service and maintenance do not feature,
therefore, in a significant way in our revenue model.
We sell our products directly to end-users in those markets in
which we have established a subsidiary, and through distributors in
markets where we have no corporate presence.
Our revenues - by sales channel
GBPm 2019-20 2018-19 Year on year Percentage
change change
Hospital medical device
decontamination:
UK & Europe direct 16.77 14.12 2.65 19%
APAC region direct 4.61 4.14 0.47 11%
Worldwide distributors 2.12 2.51 (0.39) (16)%
23.50 20.77 2.73
Hospital environmental
surface disinfection:
UK & Europe direct 3.89 2.28 1.61 71%
APAC region direct 0.23 0.12 0.11 92%
Worldwide distributors 0.76 0.21 0.55 262%
4.88 2.61 2.27
Other revenues - direct
& worldwide distributors 3.30 2.79 0.51 18%
Group 31.68 26.17 5.51 21%
Our revenues - by technology
The majority of our sales are of chlorine dioxide (CI02) based
products; but we do formulate, manufacture and sell products
utilising other disinfectant chemistries. These include quaternary
ammonium compounds, peracetic acid and alcohol. In 2020, GBP4.4m of
our sales were of non-chlorine dioxide chemistries representing 14%
of the total (2019: GBP3.7m representing 14%). As our chlorine
dioxide product sales increase at a faster pace than non-chlorine
dioxide product sales, and as we continue to find ways to persuade
customers to switch to chlorine dioxide as a superior disinfection
technology, we expect this percentage to continue to reduce in
significance.
Our Strategic Assets
We consider the assets that enable the Group to achieve its
strategic goals to be:
-- Our chlorine dioxide chemistry, about which there are three
critically important elements:
1. The formulation is proprietary;
2. We remain the only company using chlorine dioxide for the
decontamination of medical instruments in the world, which gives us
a genuine point of difference from all other infection prevention
companies;
3. The length of time that we have enjoyed this position has
allowed us to collate a significant body of knowledge, including
published scientific data, the testimony of almost two decades of
safe use, a significant global footprint of regulatory approvals
and a library of proven compatibility with hundreds of medical
instruments, all of which would take a newcomer significant time
and cost to match.
-- Intellectual property protection - at 30 June 2020, we held
265 patents granted in 37 countries providing legal protection for
our products;
-- Our people - who hold an unrivalled body of knowledge
relating both to infection prevention and to chlorine dioxide,
allowing us to quickly and efficiently create and bring to market
innovative and market ready products.
Our proprietary chlorine dioxide chemistry
The competitive advantage that we hold is that we are the only
company worldwide using chlorine dioxide to disinfect medical
instruments.
With this same chemistry, we have also established a bridgehead
in hospital surface disinfection, the veterinary market, and the
contamination control market.
The focus of our research and development is our chlorine
dioxide technology, searching for continuous improvements in
increased microbial efficacy, a reduction in hazards, and greater
efficiency in manufacture. In parallel, we invest heavily in the
creation of packaging and delivery forms that enhance and simplify
the user experience.
Our regulatory programme succeeded in attaining 25 approvals for
20 products in eight countries during the year.
Our intellectual property protection
In its broadest sense, our intellectual property relates to:
1. Patents, trademarks and registered designs;
2. The scientific validation of our chemistry and our products
that has entered the public domain via 29 peer-reviewed and
published papers;
3. 19 guidelines have been published by professional clinical
bodies, infection prevention bodies, and national healthcare
institutions that reference the use of chlorine dioxide in a format
that is recognisable as Tristel;
4. The certification by medical device manufacturers that our
chemistry is compatible with their products. We enjoy official
compatibility with the instrumentation of 55 medical device
manufacturers, with respect to 1,845 of their individual
models.
Our people
At Tristel the basic qualities we seek in our staff are
integrity, inquisitiveness and humility. In our management team, we
also look for excellent decision making and execution ability and a
"know no boundaries" approach. We believe that these qualities can
make the highest possible performance achievable. We view our
colleagues as a key strategic asset of the business.
Delivering on our key strategic financial goal
Our key strategic financial goal is to deliver long term
sustainable growth. The two key performance measures that we target
are:
-- Consistent revenue growth - during the past five years,
revenue has grown from GBP17.1m to GBP31.7m - an increase of 85%.
The compound annual growth rate in revenue since the Group went
public in 2005 has been 17%. During the year we set a new
three-year target to grow revenues in the range of 10% to 15% on
average each year to 30 June 2022. We surpassed the target in the
year.
-- Maintaining the profitability of the Group - The new
three-year target is to achieve a minimum EBITDA margin (before
share-based payments) of 25%. During the year the adjusted EBITDA
margin was 31%.
-- A third goal is to increase profit before tax (before
share-based payments) each year.
The corollary to achieving these targets is that we have been
highly cash generative given the operational cash requirements of
the business. The Board's policy with respect to dividends is that
if it considers that there are no earnings enhancing opportunities
to invest excess cash, a special dividend for shareholders will be
considered along with other distribution options.
The Board's pursuit of these financial objectives is grounded in
the belief that consistent and sustainable increases in earnings
and dividends will, over time, result in share price growth.
Progress in North America
In 2014, we explained to our shareholders that we had embarked
upon a United States regulatory approvals programme. To date we
have focussed upon our chlorine dioxide foam-based product Duo.
We have received approval for Duo from the EPA as an
intermediate level disinfectant.
We are preparing a submission to the FDA for Duo as a high-level
disinfectant. The intended use patterns will be for intra-cavity
ultrasound probes, nasendoscopes, and lastly certain ophthalmic
devices. If successful, this will position us in three of the
clinical areas in which we are most successful in other
geographical markets.
We have appointed Parker Laboratories as our contract
manufacturer for supply to each of these targeted clinical areas.
We have granted Parker marketing rights for Duo's use in ultrasound
where they are the market leader in the United States for
ultrasound conductive gels. In the ultrasound segment, the
contractual arrangement is royalty-based.
Focus
We have set objectives which are visible to everyone inside the
Group, and we make them equally visible to all other
stakeholders.
We look forward to meeting these objectives and continuing the
progress of the Group. We look to the future with confidence as
Tristel continues to grow and expand its geographical reach.
Paul Swinney
Chief Executive Officer
16 October 2020
Consolidated Income Statement for the Year Ended 30 June
2020
2020 2019
Note GBP 000 GBP 000
Revenue 31,678 26,169
Cost of sales (6,431) (5,504)
-------- --------
Gross profit 25,247 20,665
Share based payments (435) (852)
Depreciation, amortisation and impairments (2,558) (1,537)
Administrative expenses, excluding share
based payments, depreciation, amortisation
and impairment (15,449) (13,579)
-------- --------
Operating profit 6,805 4,697
-------- --------
Finance income 1 5
Finance costs (167) (1)
-------- --------
Net finance (cost)/income (166) 4
Share of profit of equity accounted investees - 45
-------- --------
Profit before tax 6,639 4,746
Income tax expense 4 (1,539) (715)
-------- --------
Profit for the year 5,100 4,031
======== ========
Profit attributable to :
Owners of the company 5,100 4,031
======== ========
Earnings per share from total and continuing
operations attributable to equity holders
of the parent
2020 2019
Basic - pence 11.38 9.14
Diluted - pence 10.88 8.86
The above results were derived from continuing operations.
Earnings before interest, tax, depreciation and amortisation for
the year ended 30 June 2020 were GBP9,363,000 (2019
GBP6,279,000).
Consolidated Statement of Comprehensive Income for the Year
Ended 30 June 2020
2020 2019
GBP 000 GBP 000
Profit for the year 5,100 4,031
Items that may be reclassified subsequently
to profit or loss
Foreign currency translation gains 314 149
-------- --------
Total comprehensive income for the year 5,414 4,180
======== ========
Total comprehensive income attributable to:
Owners of the company 5,414 4,180
======== ========
(Registration number: 04728199)
Consolidated Statement of Financial Position as at 30 June
2020
30 June 30 June
2020 2019
Note GBP 000 GBP 000
Assets
Non-current assets
Property, plant and equipment 8,080 1,466
Goodwill 5,626 5,150
Intangible assets 7,624 7,593
Investments 807 807
Investments accounted for using the equity
method - 65
Deferred tax assets 1,544 709
-------- --------
23,681 15,790
-------- --------
Current assets
Inventories 4,619 2,957
Trade and other receivables 6,422 5,370
Cash and cash equivalents 6,212 4,170
-------- --------
17,253 12,497
-------- --------
Total assets 40,934 28,287
======== ========
Equity and liabilities
Equity
Share capital 7 453 446
Share premium 12,634 11,427
Foreign currency translation reserve 397 83
Merger reserve 2,205 2,205
Retained earnings 12,767 9,191
-------- --------
Equity attributable to owners of the company 28,456 23,352
Non-controlling interests 7 7
-------- --------
Total equity 28,463 23,359
-------- --------
Non-current liabilities
Other non-current financial liabilities 5,185 -
Deferred tax liabilities 615 550
-------- --------
5,800 550
-------- --------
Current liabilities
Trade and other payables 4,672 3,539
Income tax liability 1,182 839
Other current financial liabilities 817 -
-------- --------
6,671 4,378
-------- --------
Total liabilities 12,471 4,928
-------- --------
Total equity and liabilities 40,934 28,287
======== ========
(Registration number: 04728199)
Consolidated Statement of Financial Position as at 30 June 2020
(continued)
Approved by the Board on 16 October 2020 and signed on its
behalf by:
Elizabeth Dixon
Finance Director
Consolidated Statement of Changes in Equity for the Year Ended
30 June 2020
Foreign Non-
Share Share currency Merger Retained controlling
capital premium translation reserve earnings Total interests Total equity
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 July 2019 446 11,427 83 2,205 9,191 23,352 7 23,359
Change in
accounting
policy - - - - (242) (242) - (242)
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
At 1 July 2019
(As restated) 446 11,427 83 2,205 8,949 23,110 7 23,117
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
Profit for the
year - - - - 5,100 5,100 - 5,100
Exchange
difference
on
translation
of foreign
operations - - 314 - - 314 - 314
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
Total
comprehensive
income - - 314 - 5,100 5,414 - 5,414
Dividends - - - - (2,621) (2,621) - (2,621)
New share
capital
subscribed 7 1,207 - - - 1,214 - 1,214
Deferred tax
through
equity - - - - 904 904 - 904
Share based
payment
transactions - - - - 435 435 - 435
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
At 30 June
2020 453 12,634 397 2,205 12,767 28,456 7 28,463
============ ============ =========== =========== =========== ======== =========== ============
Consolidated Statement of Changes in Equity for the Year Ended
30 June 2020 (continued)
Foreign Non-
Share Share currency Merger Retained controlling
capital premium translation reserve earnings Total interests Total equity
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 July 2018 432 11,058 (66) 478 6,518 18,420 7 18,427
Profit for the
year - - - - 4,031 4,031 - 4,031
Exchange
difference
on
translation
of foreign
operations - - 149 - - 149 - 149
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
Total
comprehensive
income - - 149 - 4,031 4,180 - 4,180
Dividends - - - - (2,210) (2,210) - (2,210)
New share
capital
subscribed 14 369 - 1,727 - 2,110 - 2,110
Share based
payment
transactions - - - - 852 852 - 852
------------ ------------ ----------- ----------- ----------- -------- ----------- ------------
At 30 June
2019 446 11,427 83 2,205 9,191 23,352 7 23,359
============ ============ =========== =========== =========== ======== =========== ============
Consolidated Statement of Cash Flows for the Year Ended 30 June
2020
2020 2019
Cash flows from operating activities GBP'000 GBP'000
Profit before tax 6,639 4,746
Adjustments to cash flows from non-cash
items
Depreciation of leased assets 692 -
Depreciation of plant, property & equipment 598 584
Amortisation of intangible assets 1,201 886
Impairment of intangible assets 67 67
Share based payments - IFRS 2 435 852
Gain on fair value of investment MobileODT - (98)
Gain on fair value of investment Tristel
Italia (111) -
Loss on disposal of property, plant and
equipment 54 21
Lease interest 165
Unrealised loss in foreign exchange 8 72
Loss on disposal of intangible asset - 12
Finance income (1) (5)
------- -------
9,747 7,137
Working capital adjustments
Increase in inventories (1,655) (415)
Increase in trade and other receivables (805) (414)
Increase in trade and other payables 1,007 49
Lease Interest paid (165) -
Corporation tax paid (1,140) (871)
------- -------
Net cash flow from operating activities 6,989 5,486
------- -------
Cash flows from investing activities
Interest received 1 5
Purchase of intangible assets (610) (669)
Purchase of investment in Italia/Ecomed (595) (4,706)
Purchase of investment in MobileODT - (120)
Purchase of property plant and equipment (1,770) (678)
------- -------
Net cash used in investing activities (2,974) (6,168)
------- -------
Cash flows from financing activities
Payment of lease liabilities (614) -
Share issues 1,214 383
Dividends paid (2,621) (2,210)
------- -------
Net cash used in financing activities (2,021) (1,827)
------- -------
Net (decrease)/increase in cash and cash
equivalents 1,994 (2,509)
Cash and cash equivalents at the beginning
of the year 4,170 6,661
Exchange differences on cash and cash
equivalents 48 18
------- -------
Consolidated Statement of Cash Flows for the Year Ended 30 June
2020 (continued)
Cash and cash equivalents at the end
of the year 6,212 4,170
===== =====
Net Debt - liabilities from financing activities and other
assets
Leases Cash Total
GBP'000 GBP'000 GBP'000
Net debt as at 1 July 2018 - 6,661 6,661
Cashflows - (2,509) (2,509)
Acquisition - operating lease - - -
incentives
Foreign exchange adjustments - 18 18
------- ------- -------
Net debt at 30 June 2019 - 4,170 4,170
Recognised on adoption of
IFRS 16 4,367 - 4,367
------- ------- -------
4,367 4,170 8,537
------- ------- -------
Cash movement - 1,994 1,994
Payment of lease liabilities (779) - (779)
Lease interest 165 - 165
Acquisition - leases 3,161 - 3,161
Disposals - leases (914) - (914)
Foreign exchange adjustments 2 48 50
------- ------- -------
Net debt as at 30 June 2020 6,002 6,212 12,214
------- ------- -------
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).
Tristel plc, the Group's ultimate parent company, is a limited
liability company incorporated and domiciled in the United
Kingdom.
Basis of consolidation
The Group financial statements consolidate those of the Company
and all of its subsidiary undertakings drawn up to 30 June 2020.
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.
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.
Audit exemption
The following subsidiaries are exempt from the requirements of
the UK Companies Act 2006 relating to the audit of individual
accounts by virtue of s479A of the Act :
-- Tristel International Limited - Registered number
07874262
-- Scorcher Idea Limited - Registered number 04602679
1 Accounting policies (continued)
Changes in accounting policy
EU adopted IFRSs not yet applied
As of 30 June 2020, the following Standards and Interpretations
are in issue but not yet effective and have not been adopted early
by the Group:
-- IFRS 3 - Definition of a Business (effective 1 January
2020)
-- IAS 1 and 8 - Definition of Material (effective 1 January
2020)
-- IFRS 9, IAS 39 and IFRS 7 - Interest rate benchmark reform
(effective 1 January 2020)
-- IFRS 17 Insurance contracts (effective 1 January 2021)
-- IAS 1 - Classification of liabilities as current or
non-current (effective 1 January 2022)
The Directors anticipate that the adoption of IFRS 17 in future
periods will have no material effect on the financial statements of
the Group.
There are no other standards that are not yet effective and that
would be expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable future
transactions.
With the exception of IFRS 16, none of the standards,
interpretations and amendments effective for the first time from 1
July 2019 have had a material effect on the financial
statements.
IFRS 16
IFRS 16 - Leases was issued in January 2016 and was adopted by
the Group effective 1 July 2019. The standard provides a single
lease accounting model, requiring lessees to recognise assets and
liabilities for all operating leases unless the term is 12 months
or less or the leased asset is of a low value. As at the reporting
date, the group had recognised right of use assets of GBP3.9m on 1
July 2019 and lease liabilities of GBP4.4m (after adjustments for
prepayments and lease incentives recognised as at 30 June 2019).
The modified retrospective transition approach has been applied
with the right of use assets being measured as if IFRS 16 had
always been applied using the transition discount rate,
subsequently an adjustment to equity of GBP0.2m was recognised as
at 1 July 2019. Comparative results have not required
restatement.
2 Publication non-statutory accounts
The financial information set out above does not constitute the
company's statutory accounts for the years ended 30 June 2020 or
2019, but is derived from those accounts. Statutory accounts for
2019 have been delivered to the registrar of companies, and those
for 2020 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor 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 16 October 2020.
3 Segmental Analysis
Management considers the Company'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 Company's operating segments are
identified initially from the information which is reported to the
chief operating decision maker.
The first segment concerns the manufacture and sale of medical
device decontamination products which are used primarily for
infection control in hospitals. This segment generates
approximately 74% of Company revenues (2019: 79%).
The second segment which constitutes 15% (2019: 10%) of the
business activity, relates to the manufacture and sale of hospital
environmental surface disinfection products.
The third segment addresses the pharmaceutical and personal care
product manufacturing industries, veterinary and animal welfare
sectors and has generated 11% (2019: 11%) of the Company'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.
The Company's centrally incurred administrative expenses and
operating income, and assets and liabilities, cannot be allocated
to individual segments.
3 Segmental Analysis (continued)
Hospital Hospital Other revenue Total 2020
medical device environmental
decontamination surface disinfection
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external
customers 23,497 4,882 3,299 31,678
Cost of material 4,499 1,132 800 6,431
Segment gross
profit 18,998 3,750 2,499 25,247
Gross margin 81% 77% 76% 80%
Centrally incurred income and expenses
not attributable to individual segments:
Depreciation and amortisation of non-financial
assets 2,558
Other administrative expenses 15,449
Share-based payments 435
Segment operating profit 6,805
Segment operating profit can be reconciled
to Group profit before tax as follows:
Finance income/(expense) (166)
Results from equity accounted associate -
Total profit before tax 6,639
3 Segmental Analysis (continued)
Hospital Hospital Other revenues Total 2019
medical device environmental
decontamination surface disinfection
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external
customers 20,767 2,613 2,789 26,169
Cost of material 4,000 804 700 5,504
Segment gross
profit 16,767 1,809 2,089 20,665
Gross margin 81% 69% 75% 79%
Centrally incurred income and expenses
not attributable to individual segments:
Depreciation and amortisation of non-financial
assets 1,537
Other administrative expenses 13,579
Share based payments 852
Segment operating profit 4,697
Segment operating profit can be reconciled
to Group profit before tax as follows:
Finance income 4
Results from equity accounted associate 45
Total profit before tax 4,746
3 Segmental Analysis (continued)
The Group's revenues from external customers are divided into
the following geographical areas:
Hospital medical Hospital environmental Other revenues Total 2020
device decontamination surface disinfection
GBP'000 GBP'000 GBP'000 GBP'000
UK & Europe
direct 16,768 3,891 2,528 23,187
APAC region
direct 4,613 231 374 5,218
Worldwide
distributors 2,116 760 397 3,273
Total Revenues 23,497 4,882 3,299 31,678
Hospital medical Hospital environmental Other revenues Total 2019
device decontamination surface disinfection
GBP'000 GBP'000 GBP'000 GBP'000
UK & Europe
direct 14,121 2,283 2,087 18,491
APAC region
direct 4,141 122 274 4,537
Worldwide
distributors 2,505 208 428 3,141
Total Revenues 20,767 2,613 2,789 26,169
Revenues from external customers in the Company'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.
Hospital medical device decontamination revenues were derived
from a large number of customers, but include GBP6.487m from a
single customer which makes up 22% of this segment's revenue (2019:
GBP6.595m, being 28%). Other revenues were derived from a number of
customers, with the largest customer accountable for GBP0.160m,
which represents 19% of revenue for that segment (2019: GBP0.139m,
17% from a single customer).
During the year 20.5% of the Group's total revenues were earned
from a single customer (2019: 25.2%).
4 Income tax
Tax charged in the income statement
2020 2019
GBP'000 GBP'000
Current taxation
Overseas tax 1,223 798
UK corporation tax 265 221
UK corporation tax adjustment to prior periods (5) (16)
------- -------
1,483 1,003
Deferred tax
Arising from origination and reversal of temporary
differences (152) (322)
UK deferred tax adjustment to prior periods 286 (20)
Tax rate effect (78) 54
------- -------
Tax expense in the income statement 1,539 715
======= =======
4 Income tax (continued)
The tax on profit before tax for the year is lower than the
standard rate of corporation tax in the UK (2019 - lower than the
standard rate of corporation tax in the UK) of 19% (2019 -
19%).
The differences are reconciled below:
2020 2019
GBP 000 GBP 000
Profit before tax 6,639 4,746
======== ==================
Corporation tax at standard rate 1,261 902
Adjustment in respect of prior years 281 (36)
Income not taxable (21) (18)
Expenses not deductible for tax purposes 23 68
(Decrease) from effect of patent box (134) (190)
Increase (decrease) from effect of foreign tax
rates 342 225
Tax rate differences (118) (85)
Enhanced relief on qualifying scientific research
expenditure (95) (151)
-------- ------------------
Total tax charge 1,539 715
======== ==================
5 Dividends
Amounts recognised as distributions to
equity holders in the year:
2020 2019
GBP000 GBP000
Ordinary shares of 1p each
Final dividend for the year ended 30
June 2019 of 3.50p (2018: 2.98p) per
share 1,562 1,303
Interim dividend for the year ended 30
June 2020 of 2.34p (2019: 2.04p) per
share 1,059 907
-------- -------
2,621 2,210
======== =======
Proposed final dividend for the year
ended 30 June 2020 of 3.84p (2019: 3.50p)
per share 1,737 1,560
Company
Dividend received from subsidiaries (3,759) (2,793)
======== =======
The proposed final dividend is subject to approval by
shareholders at the forthcoming Annual General Meeting and has not
been included as a liability in the financial statements.
6 Earnings per share
The calculations of earnings per share
are based on the following profits and
number of shares:
2020 2019
GBP000 GBP000
Retained profit for the financial year
attributable to equity holders of the
parent 5,100 4,031
--------- ---------
Shares Shares
'000 '000
Number Number
Weighted average number of ordinary shares
for the purpose of basic earnings per
share 44,831 44,086
Share options 2,033 1,399
--------- ---------
46,864 45,485
========= =========
Earnings per ordinary share
Basic 11.38p 9.14p
Diluted 10.88p 8.86p
A total of 130,000 options of ordinary shares were anti-dilutive
at 30 June 2020 (320,000 at 30 June 2019). Contingent options in
the prior year would be dilutive but are excluded. The Group also
presents an adjusted basic earnings per share figure which excludes
the share-based payments charge:
2020 2019
GBP'000 GBP'000
Retained profit for the financial year
attributable to equity holders of the
parent 5,100 4,031
------- -------
Adjustments:
Share based payments 435 852
------- -------
Net adjustments 435 852
Adjusted earnings 5,535 4,883
======= =======
Adjusted basic earnings per ordinary
share 12.35p 11.08p
======= =======
7 Share capital
Allotted, called up and fully paid shares
2020 2019
No. 000 GBP' 000 No. 000 GBP' 000
Ordinary of GBP0.01 each 45,297 452.97 44,563 445.63
Number GBP'000
30 June 2019 44,563,323 446
Issued during the year 733,210 7
---------- -------
30 June 2020 45,296,533 453
========== =======
733,210 ordinary shares of 1 pence each, related to the exercise
of 733,210 share options issued during the year (2019: 661,415).
The weighted average exercise price was 107.56 pence (2019:
81.84p).
8 Annual report
Printed copies of the annual report and financial statements,
along with the notice of AGM, will be sent to shareholders prior to
the Company's Annual General Meeting taking place on 15 December
2020 in Snailwell, Newmarket.
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END
FR FLFEEISLRLII
(END) Dow Jones Newswires
October 19, 2020 02:00 ET (06:00 GMT)
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