TRISTEL plc
("Tristel", the "Company" or
the "Group")
Half-year
Report
Unaudited Interim Results for
the six months ended 31 December 2023
Tristel plc (AIM: TSTL), the
manufacturer of infection prevention products utilising proprietary
chlorine dioxide technology, announces its interim results for the
six months to 31 December 2023, exceeding internal growth targets
by delivering 20% revenue growth and 44% growth in pre-tax profits.
The Company also announces a doubling of its interim dividend
payment.
The Company's core business is the
sale to hospitals of its proprietary chlorine dioxide chemistry
used for the decontamination of medical devices under the
Tristel brand, and for the
sporicidal disinfection of environmental surfaces under the
Cache
brand.
Financial highlights
· Revenue up 20% to a record £20.9m (2022: £17.5m)
· Overseas sales up 13% to £12.7m (2022: £11.2m)
· Reported EBITDA up 21% to £4.7m (2022: £3.9m)
· Adjusted* EBITDA up 18% to £5.4m (2022: £4.6m)
· Reported profit before tax up 44% to £3.4m (2022:
£2.4m)
· Adjusted* profit before tax up 34% to £4.1m (2022:
£3.1m)
· Reported EPS up 104% to 6.50p (2022: 3.19p)
· Adjusted* EPS of 8.68p up 87% (2022: 4.65p)
· Doubling of interim dividend to 5.24p per share (2022:
2.62p)
· No
debt and cash of £10.8m (2022: £8.4m)
*Adjusted for share-based payments of £0.7m (2022:
£0.7m)
Operational highlights
· First
manufacture and launch of Tristel ULT into the United States
ultrasound market
· Approval of Tristel ULT by Health Canada post-period
end
·
UK & EU Medical
Device Regulation reviews of Cache Tank and Capsule successfully
concluded and positive recommendation for UKCA and MDR
certification made post-period end
Commenting on the interim results, Paul Swinney, Chief
Executive of Tristel, said:
"We are delighted to report a
record performance on all levels, alongside first sales into the
North American market. Total revenue increased by 20% on last year,
exceeding our internal revenue growth target.
"Adjusted profit before tax increased by 34% to £4.1m, and we
have doubled our interim dividend, putting the Company on track for
a record earnings year.
"Looking forward, we expect to make our second FDA submission,
a 510(k) for Tristel OPH, our ophthalmic device high level
disinfectant, in time for an approval by the end of
2024. Post period end, all reviews under both UK and EU Medical
Device Regulations for Tank and Capsule, the newest additions to
the Cache range, have been successfully concluded and a positive
recommendation for UKCA and MDR certification has been made.
This enables us to expand into the largely untapped sporicidal
surface disinfection market.
"This six-month period represents the highest sales and profit
performance that the Company has experienced in its thirty-year
history, including during the early COVID era when demand for our
products was unprecedented.
"I
am thrilled that the Company continues to thrive and grow, with a
pipeline of new product launches planned for the near
term."
CFO
video overview & investor presentations
Please find a link to a video
overview relating to the Company's interim results from the Group's
Chief Financial Officer, Liz Dixon here: https://stream.brrmedia.co.uk/broadcast/65d7330135af67d51a41bd95.
Paul Swinney, CEO, and Liz Dixon,
CFO, will present the Company's results via the Investor Meet
Company platform today at 11:30am GMT. The presentation will also
be available for playback after the event. Investors can sign up to Investor Meet Company for free and
add to meet Tristel plc via:
https://www.investormeetcompany.com/tristel-plc/register-investor
An in-person presentation will take
place today at 4:15pm for a 4:30pm start at 85 Gresham Street, London, EC2V
7NQ followed by refreshments. Please
register to attend by contacting Walbrook PR on 020 7933 8780 or
email tristel@walbrookpr.com.
For
further information please contact:
|
Tristel plc
|
Tel: 01638 721
500
|
|
Paul Swinney, Chief Executive
Officer
|
www.investors.tristel.com
|
|
Liz Dixon, Chief Financial
Officer
|
|
|
|
|
|
Walbrook PR Ltd
|
Tel: 020 7933 8780
or tristel@walbrookpr.com
|
|
Paul McManus
|
Mob: 07980
541 893
|
|
Charlotte
Edgar
|
Mob: 07884 664 686
|
|
|
|
|
Cavendish Capital Markets Ltd
|
Tel: 020 7220
0500
|
|
Geoff Nash / Charlie Beeson
(Corporate Finance)
|
|
|
Sunila de Silva (ECM)
|
|
|
|
|
About Tristel plc
Tristel plc is a global infection prevention company focussed on the manufacture and supply of products using its
unique proprietary chlorine dioxide (ClO2) chemistry.
The Company is a market leader in manual
decontamination of medical devices, supplying hospitals under the Tristel brand, and under the Cache
brand provides products for sporicidal surface
disinfection, in a format which is a sustainable alternative to
commonly used pre-wetted plastic wipes.
Tristel's head office and
manufacturing facility is located in Snailwell, near Cambridge, and
operates globally employing approximately 250 people across 14
subsidiaries selling into 40 countries.
The Company has been listed on the
London Stock Exchange's AIM market since 2005 (AIM:
TSTL).
For more information about Tristel's
product range please visit: https://tristel.com
Chairman's statement
Revenue
During the half revenue increased by
20%, reaching a record level of £20.9m.
Higher sales volume accounted for
£1.5m of the £3.4m revenue growth and price increases accounted for
the remaining £1.9m. This represents an average price increase of
12%, reflecting the global inflationary environment. In the UK the
increase has been higher because of supply agreements which require
fixed pricing extending into the future.
Tristel medical device sales grew by
25%, reaching £18.3m. In all counties in which we sell we continue
to build our market leadership position. We are also
benefiting from an increase in diagnostic procedure numbers as
hospitals worldwide continue to tackle backlogs caused by the
pandemic.
Post period end, we received
confirmation that all reviews under the
Medical Devices Regulation 2002 ("UK MDR") and the European Union
Medical Device Regulation 2017/745 ("EU
MDR") for approval of the Company's TANK ClO₂ Sporicidal
Disinfectant system have successfully
concluded and a positive recommendation for UKCA and MDR
certification has been made. This now allows us to accelerate our
sales activity throughout Europe. Cache sales were impacted by this
delayed approval, decreasing slightly from £1.8m to
£1.7m.
The Other revenue segment includes
carriage and third-party products which are complementary to the
Company's key strategic focus on infection prevention. Sales within
this category declined marginally in the
period.
Profits and margins
Our gross margin increased to 84% in
the half (2022: 81%), due to a combination of product mix and price
increases.
Sales, general and administrative
expenses were £11.9m (2022: £9.5m), a 27% increase. This cost
growth is due to a combination of inflationary increases and the
recruitment of an additional 27 staff into our sales, marketing and
distribution areas. We implemented pay increases during 2023 to
ensure our pay rates remain competitive and to secure staff
retention.
Reported Group profit before tax
increased by 44% to £3.4m (2022: £2.4m), and Group profit before
tax and share-based payments increased by 34% to £4.1m (2022:
£3.1m).
Earnings and Dividend
Reported earnings per share (EPS)
were 6.50p, an increase of 104% from 3.19p
last year.
EPS adjusted for share-based
payments of £0.7m (2022: £0.7m) was 8.68p (2022: 4.65p). The
increase in adjusted EPS relates in part to a lower tax rate of 10%
(2022: 37%). The effective tax rate on operational results is 20%,
however, the tax impact of the Group's share option plans decreased
the overall effective tax rate for the period to 10%.
The share-based payment charge of
£0.7m is derived from the Group's All-Staff share option scheme
which is based upon periodic share option grants to staff members
(£0.5m), and the Executive Management LTIP scheme (£0.2m). The
All-Staff scheme is valued via the Black-Scholes model; the
Executive Management scheme, which is linked to share price and
profit targets, is valued via the Monte Carlo method. The Board
believes that these share schemes help to retain staff and link
their interests to shareholders. The value of share-based payments
is significantly influenced by the volatility of the Company's
share price, a factor that is out of the Board's control. As
consequence, profit and earnings are reported on both an adjusted
basis, adding back share-based payments, alongside unadjusted, so
that the underlying profitability of the Company can be
understood.
The Board is recommending an interim
dividend of 5.24 pence (2022: 2.62 pence) to be paid on 12 April
2024. The associated ex-dividend date will be 21 March 2024 with a
record date of 22 March 2024.
North America
We now have clearance from both the
FDA and Health Canada to sell Tristel ULT, our high-level
disinfectant foam for use on endo-cavity ultrasound probes and skin
surface transducers. We also have approval from Health Canada for
Tristel OPH, our high-level disinfectant foam for use on ophthalmic
and optometry medical devices. We will make a 510(K) submission to
the FDA for this product during the summer of 2024 and expect
clearance by the end of 2024.
We have established a manufacturing
base for both products with our partner Parker Laboratories Inc.,
New Jersey, and will utilise Parker's national distribution network
for the US and Canadian ultrasound markets. We are selling Tristel
OPH through Innova Medical Inc., a specialist supplier of
ophthalmic instruments into the Canadian market. We will put in
place a distribution arrangement for the United States ophthalmic
market in the second half of the year.
Parker's manufacturing processes
have been validated by our quality team and production is now
underway. The product has been through beta testing at a number of
healthcare institutions in the United States, with very positive
feedback. Parker Laboratories plans an extensive marketing and
trade show programme throughout 2024 and is in the process of
expanding its salesforce in order to capitalise on the potential
that Tristel ULT represents. During the first ten weeks of activity
our revenue and royalty income from North America totalled £46k. We
are very encouraged by this positive start.
In the second half of the year, we
will procure office premises and recruit a small number of United
States based staff to support Parker's marketing and sales efforts
and establish a local regulatory capability.
CEO
succession
At the time of our AGM in December,
Paul Swinney, the Company's founder and CEO of 30 years, announced
his plans to retire in 2024 following a successful transition of
leadership. A competitive selection programme is currently
underway.
Outlook
With North America now an active
territory for us and further product approvals in the pipeline, the
business is in good shape. We continue to look forward to the
future positively.
Bruno Holthof
Chairman
26
February 2024
At financial year end (June 2023),
the Group reassessed its operating segments and considered that they should be based on geography rather
than by product category as previously was the
case. Group revenue lines are split into
fourteen geographic regions, which span the different Group
entities. In accordance with IFRS 8, aggregation criteria have been
applied to six operating segments where similar economic
characteristics are shared. The directors consider the operating
segments to have similar economic characteristics as they have
similar operating margins, and the nature of products sold, and
customers are similar. Management considers these operating regions
under six reportable segments. The geographic segments consider the
location of the sale and product type sold, which is split into
three subdivisions. The Company's operating segments are identified
initially from the information which is reported to the chief
operating decision maker which for Tristel is the CEO.
The first product division concerns
the manufacture and sale of medical device
decontamination products which are used primarily for infection
control in hospitals. These products generate approximately 87% of
Company revenues (2022: 84%).
The second division which
constitutes 8% (2022: 10%) of the business activity, relates to the
manufacture and sale of hospital environmental surface disinfection
products.
The third division addresses the
pharmaceutical and personal care product manufacturing industries,
veterinary and animal welfare sectors and has generated 5% (2022:
6%) of the Company's revenues this year. A number of the products
contained within this division were discontinued during the prior
year.
The operation is monitored and
measured on the basis of the key performance indicators of each
segment, these being revenue and profit before tax, and strategic
decisions are made on the basis of revenue and profit before tax
generating from each segment.
6
months ending 31 December 2023 (unaudited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total 2023
|
|
Profit Before
Tax
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
UK to UK and Overseas
distributors
|
|
8,483
|
|
1,251
|
|
528
|
|
10,262
|
|
2,957
|
|
Australia
|
|
1,762
|
|
7
|
|
130
|
|
1,899
|
|
85
|
|
Germany
|
|
2,673
|
|
27
|
|
43
|
|
2,743
|
|
123
|
|
Western Europe
|
|
2,707
|
|
114
|
|
148
|
|
2,969
|
|
133
|
|
Italy
|
|
721
|
|
1
|
|
1
|
|
723
|
|
33
|
|
Other ROW
|
|
1,956
|
|
242
|
|
149
|
|
2,347
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
18,302
|
|
1,642
|
|
999
|
|
20,943
|
|
3,437
|
6
months ending 31 December 2022 (unaudited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total
|
|
Profit Before
Tax
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
UK to UK and Overseas
distributors
|
|
5,673
|
|
1,287
|
|
527
|
|
7,487
|
|
1,940
|
|
Australia
|
|
1,671
|
|
12
|
|
70
|
|
1,753
|
|
79
|
|
Germany
|
|
2,375
|
|
22
|
|
46
|
|
2,443
|
|
109
|
|
Western Europe
|
|
2,501
|
|
130
|
|
179
|
|
2,810
|
|
126
|
|
Italy
|
|
681
|
|
3
|
|
-
|
|
684
|
|
31
|
|
Other ROW
|
|
1,798
|
|
328
|
|
160
|
|
2,286
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
14,699
|
|
1,782
|
|
982
|
|
17,463
|
|
2,388
|
Year ending 30 June 2023 (audited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total
|
|
Profit Before
Tax
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
UK to UK and Overseas
distributors
|
|
11,895
|
|
2,381
|
|
1,017
|
|
15,293
|
|
4,179
|
|
Australia
|
|
3,504
|
|
22
|
|
134
|
|
3,660
|
|
165
|
|
Germany
|
|
4,979
|
|
40
|
|
89
|
|
5,108
|
|
230
|
|
Western Europe
|
|
5,244
|
|
240
|
|
347
|
|
5,831
|
|
262
|
|
Italy
|
|
1,429
|
|
5
|
|
-
|
|
1,434
|
|
65
|
|
Other ROW
|
|
3,766
|
|
608
|
|
309
|
|
4,683
|
|
211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
30,817
|
|
3,296
|
|
1,896
|
|
36,009
|
|
5,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
months ending 31 December 2023 (unaudited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
From external customers
|
|
18,302
|
|
1,642
|
|
999
|
|
20,943
|
|
Cost of material
|
|
(2,358)
|
|
(641)
|
|
(402)
|
|
(3,401)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
15,944
|
|
1,001
|
|
596
|
|
17,542
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
87%
|
|
61%
|
|
60%
|
|
84%
|
|
|
|
|
|
Centrally incurred income and
expenses not attributable to individual segments:
|
|
|
|
Distribution costs
|
|
(274)
|
|
Depreciation and amortisation of
non-financial assets
|
|
(1,365)
|
|
Other administrative
expenses
|
|
(11,833)
|
|
Share-based payments
|
|
(691)
|
|
Other income
|
|
-
|
|
Operating profit
|
|
3,379
|
|
Operating profit can be reconciled
to Group profit before tax as follows:
|
|
|
|
Finance income
|
|
58
|
|
|
|
|
|
Total profit before tax
|
|
3,437
|
|
|
|
|
|
|
|
|
|
|
6
months ending 31 December 2022 (unaudited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
From external customers
|
|
14,699
|
|
1,782
|
|
982
|
|
17,463
|
|
Cost of material
|
|
(2,226)
|
|
(719)
|
|
(387)
|
|
(3,332)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
12,473
|
|
1,063
|
|
595
|
|
14,131
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
85%
|
|
60%
|
|
61%
|
|
81%
|
|
Centrally incurred income and
expenses not attributable to individual segments:
|
|
|
|
Distribution costs
|
|
(188)
|
|
Depreciation and amortisation of
non-financial assets
|
|
(1,431)
|
|
Other administrative
expenses
|
|
(9,353)
|
|
Share-based payments
|
|
(688)
|
|
Other income
|
|
13
|
|
Operating profit
|
|
2,484
|
|
Operating profit can be reconciled
to Group profit before tax as follows:
|
|
|
|
Finance costs (expense)
|
|
(96)
|
|
|
|
|
|
Total profit before tax
|
|
2,388
|
|
|
|
|
|
|
|
|
|
|
Year ending 30 June 2023 (audited)
|
|
|
Hospital medical device
decontamination
|
|
Hospital environmental
surface disinfection
|
|
Other
revenues
|
|
Total 2023
|
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
From external customers
|
|
30,817
|
|
3,296
|
|
1,896
|
|
36,009
|
|
Cost of material
|
|
(4,494)
|
|
(1,437)
|
|
(903)
|
|
(6,834)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
26,323
|
|
1,859
|
|
993
|
|
29,175
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
85%
|
|
56%
|
|
52%
|
|
81%
|
|
Centrally incurred income and
expenses not attributable to individual segments:
|
|
|
|
Distribution costs
|
|
(323)
|
|
Depreciation and amortisation of
non-financial assets
|
|
(2,618)
|
|
Other administrative
expenses
|
|
(19,896)
|
|
Share-based payments
|
|
(1,061)
|
|
Other income
|
|
4
|
|
Operating profit
|
|
5,281
|
|
Operating profit can be reconciled
to Group profit before tax as follows:
|
|
|
|
Finance (expense)
|
|
(169)
|
|
|
|
|
|
Total profit before tax
|
|
5,112
|
|
|
|
|
|
|
|
|
|
|