Tristel (LSE:TSTL) — Preliminary results

0:00 Good morning, and welcome to the TRISTEL PLC preliminary results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated at the right corner of your screen to simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company will review all questions submitted today and publish responses as best as appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you up to Liz Dixon, CFO. Good morning.

0:29 Good morning, and hello, everybody. Welcome to TRISTEL's preliminary results presentation. So these are our June 23 results. I'm joined in the room by Paul Sweeney, our c CEO, and also Heidi Allard, our chief financial controller. And they will both join for questions later on, but I'll just lead us through the presentation. So for those of you who don't know the business, TRISTEL is an infection prevention company. We focus entirely upon the hospital, and we have a unique proposition, which is our chlorine dioxide, proprietary formulation, which we use to decontaminate both medical devices and disinfect surfaces.

1:16 We have a very simple product. We're very focused upon the hospital, and this is a global opportunity which we are addressing. Our products can be used for multiple applications around the hospital. The TRISTEL branded product range focuses upon medical devices. And within the hospital, there are numerous departments that our products are used within. And we list on this slide the medical devices that are appropriate for decontamination by chlorine dioxide. These medical devices have the unique properties of being heat sensitive and made of plastics and polymers, which means they can't be sterilized.

2:10 But the the type of pathogens that cause risk to patients mean that they must be disinfected to the highest possible level between use. The departments that we address are those which in which invasive ultrasound probes are used. So the probes that go into the various orifices of the body, transvaginal ultrasound probes, transrectal, and also skin surface ultrasound probes. And these probes account for the largest proportion of our medical device revenues. We also use our chemistry to decontaminate echocardio probes, which are used within cardiology departments within hospitals, ENT, nasoscopes, and various other pieces of of medical equipment that contain cameras or electronics or plastics that are listed here that make up the the remainder of our medical device revenues.

3:11 We are currently the global market leader in manual high level decontamination or disinfection of medical devices. So our products are applied by hand. They come in the form of a wipe or a foam, and and and we compete in this market with machines, pieces of equipment into which you can place these medical devices for disinfection. But our products are unique in the fact that they are the chemistry is applied by hand. And why do we do that? Well, we do it because chlorine dioxide is such a safe molecule. It can be handled. It can be used within the breathing zone, whereas the types of chemistries used in other in in machines are noxious, and so they need to be contained within a box to protect the the nurse or the physician who is carrying out the decontamination process.

4:10 But as a consequence, our products are mobile. They, they can be carried around the hospital. We don't have to take the medical device into a room where a box or a washing machine or a a cabinet is located in order to disinfect it or decontaminate it. Our products can be used anywhere. It can be used in the field, can be used in a department, can be used in an ambulance. And as a consequence, they are extremely flexible and provide

4:41 a real alternative, a true competitive edge against fixed install fixed installations of machinery. The chemical chlorine dioxide is also very suitable for the disinfection of medical surfaces. And we list here some of the areas, the surfaces within a hospital where dangerous pathogens can lurk. They are high touch surfaces and and where you have immune compromised patients or basically anyone who's sick within a hospital, then you want to make sure that they don't acquire an infection whilst in the hospital from one of these surfaces. So mattresses, IV poles, trolleys, commodes, and so on, these are the areas that our products are used to disinfect.

5:31 This is a much smaller element of our revenue, but it's a it has the potential to rival our medical device decontamination products in terms of value over time. So the financial year that we're reporting upon is the year to 06/30/2023. We achieved a 16% growth in turnover up to 36,000,000, and that's after in our comparable period, we had a number of products which we discontinued. So looking at continuing products, we achieved 22% growth from, compared to the prior year. Overseas sales grew by 17% up to 23,500,000, and we address our overseas markets via 14 wholly owned subsidiaries and some thirty five third party distributors that many of whom we've been working for with for for over a decade.

6:32 Our gross margin was relatively steady, increased very slightly up to 81%. We achieved an adjusted EBITDA margin of 25% and adjusted pretax profit of 6,200,000 compared to 4,500,000 the year before. And we adjust for share based payments each year. We have a an all staff share option scheme, which we we we issue shares to all of our staff to to gain a company ethos aligned to shareholders. But as a consequence, we do have a a large share based payment charge each each year, but we add it back so that the shareholders can see the underlying performance of the business.

7:24 EPS grew by 39% in the period up to 10.67 per share, and our dividend for the full year is up by 10% to 10.5p per share. And that's an increase of 10% on our prior year that included a special dividend of 3p. So what we've sought to do this year is achieve growth upon the the larger than normal dividend of the prior year, but we've also restated our dividend policy whereby we will be increasing the dividend by a a minimum of 5% per annum going forward. Our net cash during the at the end of the financial year was 9,500,000, and that included funds on deposit.

8:16 And as an indication of how things are going in the current financial year, cash is now up to £12,000,000 today.

8:28 Moving on to operational highlights. The, the key event during the year we're reporting upon was the achievement of clearance to sell our high level disinfecting foam for ultrasound devices by the FDA into The US market. It's a program that we've been working on for quite a few years and has cost us in the region of £3,000,000 to achieve. Or finally, on the, I think, the June 8, we received clearance from the FDA to sell. We are now in the launch phase of the product, and and we're partnering partnering with a company called Parker Laboratories who manufacture ultrasonic gels, which will be used in in the same same procedures as our disinfecting foam will be used.

9:23 And Parker will manufacture our, TRISTEL PLC within their manufacturing facility in New New Jersey, and they will ship the product out to customers via their existing distribution channels. And we can report in this set of numbers that we have now started to sell, or Parker has started to sell TRISTEL PLC through distributors into The US market. So it's a a very exciting time for the business. We also achieved in the in the period regulatory approval for our ophthalmic high level disinfecting foam. And and we've also recorded first sales of that product within the quarter just ended.

10:13 So our North American program is well underway now. The majority of our UK and European regulatory approvals for cash are expected to be secured in the current financial year. So here, we're talking principally about CE marking and UKCA marking. It's been a little frustrating for us trying to obtain approval via our notified body, BSI, but we know that the technical files are under review, and we're receiving questions from BSI. And so we're we're confident that come June 30 this year, we will have clearance to sell all of our tank and capsule surface disinfecting products throughout The UK and Europe. And we are also working upon further approvals in in other regulatory authorities such as the TGA in Australia and and so on.

11:17 And we have a continuing investment in new product innovations. I'll touch on those as we go through the presentation. But one of the features of TRISTEL is that we are an innovator. We the chlorine dioxide chemistry that we work with requires innovation because it comes as as two chemicals which need to be brought together at the point and place of use. And as a consequence, we need to have delivery systems. We need to have formulations, and we need to have electronic devices and and apps which can monitor and track and trace the process as as the process as the decontamination event is taking place. And we innovate and we develop all of these technologies in house.

12:03 During the period, we increased our headcount by 10%, and that was in areas such as sales and marketing, but also within regulatory and product development. So the key areas of business growth is where we invest continually.

12:23 Over our ten year over the last ten years of our of our business, the we can show here that our compound growth rate sat at around the 13% mark. And, you will see within the graph that we had two years of no growth caused by the closure of outpatient diagnostic departments within hospitals, the areas that we focus upon. Well, these are now open again, and and as as a consequence, our growth trajectory is back on track. We sold 4,900,000 more of products during the year just ended than we did the prior year, and we just give a little breakdown there of where that came from. We gained £700,000 as a consequence of currency fluctuations.

13:12 £2,800,000 of that growth came from volume and £1,400,000 from pricing. So we do have pricing power, and the the the increase in pricing that is applicable in this period was 4.5%.

13:32 So looking at our sales by geography, then, you can see that, our 14 distributors, they're spread completely around the world, and we saw strong growth across the piece. All areas of the company, grew in accordance with our corporate and and above our corporate growth, targets and hurdles of 10 to 15%. And we can see in in, Australasia, Hong Kong, China, Malaysia, Singapore, APAC, as we bring them together in our financial statements, APAC was £7,400,000 of revenue. Within Europe, those three areas totaled £13,300,000 of revenue, and they and Europe now exceeds our home market of The UK, which is £12,500,000.

14:28 So we have a very well balanced geographical picture of of revenue and all areas growing at a good healthy rate. With respect to sales channels, we sell direct from our own subsidiaries, and and then we also have a number of distributors in place in our two segments of medical devices and surfaces. You'll see that cash is much, much, much smaller than medical devices at 3%. But and with 3% growth in the period was very much slower. But attaining regulatory regulatory approvals is the key to igniting progress in that area. And as I say, we're hoping that our cash approvals will come through during this current financial year.

15:26 Our worldwide distributors contain three areas that they're all performing particularly well, and they include Ireland, Korea, and Chile. So we have, again, good regulatory, good good geographical spread in terms of our our growth areas.

15:48 We detail on the next slide some tailwinds and headwinds, those that are positive. So our tailwinds include an increase in diagnostic procedures globally. So, we can see, an increase year on year of the number of diagnostic diagnostic procedures that are carried out. These this comes from factors such as a aging populations needing increased health care provision and increasing diagnostic pro procedures due to new technologies, so new medical devices that are available to diagnose. And, also, health screening is becoming more and more available to throughout the world and more common for us all to to to participate in.

16:35 All of these things push up the number of procedures that take place each year, which benefits us Every single diagnostic procedure that happens results in the use of a device, and those devices need to be decontaminated between use. Hospitals are selecting more appropriate surface disinfection products, and and they they're better informed. Our infection prevention colleagues within hospitals are increasingly better informed about what is an appropriate product to use. And subjects such as or areas such as

17:12 resistance to to disinfectants will feed into a our sales teams being able to offer TRISTEL a product, which can help those infection prevention teams get a better outcome at the end of their decontamination process. There is, of course, unprecedented concern around the use of pre wetted plastic wipes in health care, and our cash product range feeds into that need by providing a break between the use of the the the wipe and and the chemistry. So we provide chemistry. The cop the hospital can choose. It's it's whichever type of wipe it would like to use, and that could be paper. It can be a a laundable cloth, micro, forget the word, microfiber microfiber cloth, which means that the use of plastic can be drastically reduced within hospitals.

18:16 We do have insulation from inflation because of our very high gross margins, and we have very low energy costs within the business, within our manufacturing processes, which gives us some protection from energy cost increases. And we do have pricing power. Indeed, we increased our prices. We do increase our prices annually, and we align those to the global inflation rates. There in terms of headwinds, then as we found with our cash product approvals, under resourced regulators will slow us down, and that's just a feature of, the market in which we operate. And, of course, hospital staff shortages, COVID waves, any future COVID waves, our existing COVID waves, and also any industrial action, which is a feature, I think, principally of The United Kingdom, they will disrupt diagnostic services and as a consequence, our revenue growth trajectory.

19:23 So we we have focused upon geographic growth within the business, but we also are bringing a number of new products to market so that we can expand the product range and and add some security to the products that we already sell. And the key areas of that we're focusing upon on this slide are digital products. So three t is an app platform. It is it provides to the user traceability. It it demonstrates that the product has been used appropriately. It had provides in use training for the for the clinician, and it records all steps of the decontamination process. So we provide assurance to health care institutions that their medical devices have been decontaminated between uses.

20:17 And then as we move on to the next product in development, which is our AI program, Here, we can demonstrate that the product was provided the chemical has been provided at the right concentration, that the the device was fully covered, and that the contact time of the chemical on the device has been adhered to. And by providing all of these assurances, we demonstrate to the user in the same way that a machine might demonstrate that all elements of the process have been performed adequately and and to the right level.

21:06 We're also developing a range of products which can provide further assurance by applying color to a medical device and and demonstrate that the user by removing that color or by the by the chemistry neutralizing that color that that the key steps have also been performed. So in every part of our product development program, we are offering assurance to the end user that the process has been completely performed and and and totally enacted in accordance with its with the requirements. During the financial year, we put in place 62 patent applications.

21:51 So we do provide patent protection as far as we possibly can. Six of those applications went to grant, and we invested £900,000 in product development and £300,000 with respect to patent protections. And then looking at the North America, again, looking back at product strategy in North America, then here we can see the various products which we are taking through or have taken through the regulatory process and are now taken to market. They are all our foam based products. So within each of these images that you'll see a a foam based product, it's we we call it Duo.

22:38 In The US, we've got, TRISTEL Alt, which is a a Duo product, which is now on sale. Then we have TRISTEL duo, which is an EPA, a a mid to low level disinfectant, which is also on sale. This is for ultrasound equipment. The first one is for the probe, so the part of the medical device which enters the body. Second one is for the rest of the of the probe, rest of the device. They're both on sale now in The US, and and we have orders being shipped as we speak. Within Canada, we have the same product, but this time is being used upon ophthalmic devices to high level disinfect. And that's in Canada, we are regulated by Health Canada, the regulatory authority in the country. That product is on sale.

23:27 And then DUO ALT, which is principally the same product as TRISTEL ALT, certainly within the within the ket the bottled chemistry is exactly the same, and the use pattern is the same as TRISTEL ALT. But this time in Canada, it requires a separate registration, and we have submitted that dossier into Health Canada. And we expect approval from there in before the end of June twenty twenty four. Moving on beyond that point, then within The US, we will take our de novo application that was applicable for TRISTEL Alt, and we will use it as a predicate for five ten k applications for TRISTEL OPH and TRISTEL ORL, which will cover ophthalmic devices and E and Os and throat devices. So as we have in the rest of the world, broadening our use within a hospital through the various departments that that carry out diagnostic procedures.

24:29 And in in Canada, we will also make a submission of Duo ORL, which is our inosensitope device. So the nasal endoscope predominantly a high level disinfectant.

24:47 So operationally, within the within North America, we can report now that we are manufacturing products. We've gone through our process, our process validation, ensuring that manufacturing is to the right standard, it's repeatable, and and that Parker are able able to produce the product in accordance with the FDA specification, which we've completed. So we now know that Parker are are and were the appropriate partner for manufacturing our TRISTEL PLC, and they are now making product inventories available. And indeed, it has now been shipped and invoiced within The US. So we are on on track with our operational timelines.

25:39 And the next steps for us will be for the for Parker to work with the their distribution partners and also hospital procurement departments to to list the product on the internal platforms, ordering platforms so that customers can order the product smoothly and, and easily. And then in the meantime, both we and Parker have been exhibiting the product. We've been showing it, and we've attended a number of conferences, both infection prevention, but also ultrasound related conferences. And a few of those are, are shown on the slide here. So Association for Vascular Access, the, Infection Prevention Society within The United States, and the Society for Diagnostic and Medical Sonography.

26:33 So these are all very relevant to our product, and we are showing the product or Parker's showing the product at all of these events. And just as a quick reminder, our arrangement with Parker is that they will manufacture and sell. We will attain a 24% royalty on their sales value, And we anticipate that Parker will sell into their distributors at $2 a a unit, and the distributors will sell on to end users at 3 to $3.50 sorry, per per procedure. There's a procedure cost. So we attain 24% of the $2 per procedure.

27:24 And that will come into the TRISTEL financial statements as a royalty with a a 100% margin. So we set for ourselves internal financial targets or hurdles, and, the existing hurdles that are in place are to attain a 15%, growth rate, sales growth rate on average over a three year period, and to attain at least a 25% EBITDA margin. The these will be revisited in February this year. Why in February? Well, because by then, we should have some real traction occurring within The United States, and it'll enable us to make sure we're setting appropriate targets for ourselves in the coming three years.

28:17 So now just looking at dividends. I mentioned before we have changed our dividend policy. Well, we've moved to a progressive year on year dividend. We're increasing by a minimum of 5% per annum. We will link it to earnings, but, setting ourselves that hurdle of at least 5% growth year on year. In the year that we're we're reporting upon, then our final dividend will be 10 point sorry. Full year dividend will be 10.5p, and that means a final dividend of 7.88p payable on the December 22. We have put a slide in here in relation to ESG.

29:05 So during the financial year, we published our ESG strategy. We were assisted in that by a company called Simply Sustainable who helped us, create that strategy, and we have set ourselves a carbon zero target of 2030. And we, have defined the route by which we can achieve, carbon zero for our scope one and two emissions during that period of time. We are carbon profiling all of our key products so that we can make adjustments to packaging to bring in more recycled and more recyclable elements to the product and also reduce the packing generally so that we can improve the profile of of all of our output.

29:57 We have recruited or we're in the process of recruiting a sustainability officer into the business to help us with what is quite a considerable burden of administration in terms of of all of the admissions calculations and so on. And then outside of environmental concerns, but under the ESG banner, we carried out a board evaluation ex using external consultants, a company called New Role. They helped us with that process. We came up with a number of actions which have now been undertaken. And we continue with our standard staff well-being and support initiatives. We've built that out. We further support around key subject matters such as mental health, such as menopause, and so on. And, also, we continue to support a number of local community initiatives and local youth, sports teams and the like to bring ourselves closer to our local environment.

31:06 So as a summary and an outlook, then I we believe, I hope you also believe that this is a strong set of results on all levels. We are certainly very pleased with the with the performance of the business over the course of the last twelve months. The go global expansion will accelerate now with, with the Americas launch, but as you could see, it is happening already on all levels. So we are not a one trick pony. This company is not about North America solely. There's plenty going on in other parts of the globe. We have significant growth opportunities in both of our portfolios. The, the cash portfolio may not be as large as the medical device device portfolio at the moment, but we predict it will be in time. And the business, of course, is profitable, cash generative, debt free, and we now have a progressive dividend policy.

31:57 So we view it as having a a very exciting future ahead of us. Okay. I can pass over to questions. Perfect, Liz. Thank you very much for your presentation. What I'll do is I'll just bring your camera back up now. Ladies and gentlemen, please do continue to submit your questions by using the q and a tab, which is situated on the top right hand corner of your screen. But just while the company take a few moments to review these questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we received a number of questions throughout today's presentation. And Paul, if I could just hand over to you just to share the q and a, then I'll pick up from you at the end. Thanks very much. So we've got five questions so far, and we may get more coming through. But just one question from Peter who sent in a question regarding finance costs.

32:46 Given the company's cash generative and cash rich, why are there much larger finance costs than finance income? Yes. Okay. So our finance costs include IFRS 16 lease interest payments. And as many of you will know, that effectively moves the rental payments down the income statement to depreciation and interest paid. Predominantly, our our leases, our largest leases are our property leases and our motor fleet. So it it we do incur a significant amount of interest paid via IFRS 16 effectively accounting adjustments.

33:31 We commenced cash deposits during financial year '23, predominantly last quarter. So at the year end, we had I believe one had matured. We'd accrued around £10,000 of interest receivable. At the year end, we had 2,400,000 cash on deposit. We currently have 6,000,000. So we are anticipating an increase in our interest received for financial year '24. Okay. Thank you very much. So as a good reminder, yes, Heidi Yalla, chief financial controller is in the room as well as Paul Sweeney, chief executive. One of the other questions was about what other opportunities are there. Can you apply this to dental or maybe your products to dental or larger specialist surgical vet practices?

34:28 Well, the short answer is yes. We could apply the product to those in those markets. And indeed, with with respect to veterinary, then we have we have had product ranges which take the chemistry into vet surgeries. But one of the one of the conclusions withdrawn is that our business operates best when it's really focused. And it's difficult to take a sales team out of the hospital and put it into a vet's practice. It's difficult to take a sales team and and and take those individuals into dental surgeries or or even into the consumer market as another example. So we we try to be very focused upon the hospital. It's what we know.

35:17 It's where a high level disinfectant is most appropriate, and and it is actually necessity. In other markets, I don't think we can say that there's an absolute necessity for HLDs. So we focus upon areas where we believe we can get the largest returns without duplicating our sales teams or our regulatory efforts or so on. So focus is the keyword for us. You talked on slide 12 about how you're going to be marketing in The US, but one investor's asked, how do you expect to displace the incumbents in The US? Well, it's an interesting question because the incumbent, there is only one, is a device called TROPHON, which is a a cabinet into which the hospital will place the hospital user will place the ultrasound probe, and hydrogen peroxide gas is pumped in, to decontaminate the device.

36:21 And, and it hangs there in the box for five to ten minutes, and and then it's removed for for subsequent

36:30 use for on the patient. Many hospitals will prefer to use machines such as the Trophon machine manufactured by Nanosonics. And but many hospitals will prefer to have a more flexible solution such as TRISTEL's foam decontamin high level decontamination product. And and so there's place for both of us in that market. Because the only incumbent HLD is a machine, it means that there is a large portion of the market that is actually not compliant with the regulations. It's using a disinfectant chemical, but it's an inadequate chemical.

37:17 And so the provision of of of TRISTEL PLC into the market means that more people can become compliant with the requirements. So we are both filling a gap in the market where no product can currently be used. We're also sitting alongside the incumbent TROPHON machine. And in in and in many instances, as we do around the rest of the world where we compete with TROPHON, we will find that people that hospitals decide to switch from an automated process to a manual process because it provides more flexibility to them. So I think that we can exist alongside and and also alongside Tropon and also grow our revenue quite significantly.

38:05 We estimate that TROF1 currently holds around 40% of the appropriate decontamination processes available, so there's plenty of space for us to play in. Thank you. Question about m and a. Is m and a a possibility to consolidate your position in any particular geography? Well, we have acquired distributors over time. We have 26, I think, distributors in place at the moment, 26 countries in which we have arrangements with distributors. And much of our overseas growth has come from markets where we have acquired companies which focus almost exclusively upon infection prevention.

38:52 And and these companies were previously our distributors that we've acquired. So that has happened in Australia, in France, Belgium, Netherlands, Italy, Malaysia, Singapore. So, yes, m and a will always be a possibility for us. Indeed, during the financial year, we acquired our GCC distributor who has now bought that business in house. So we have there was always the potential. What we what we have not done so far, and I don't think we have plans at the well, I know we don't have plans at the moment, but I I think we would hesitate to do is is to acquire another technology because our chloride dioxide chemistry has provided the everything we need in terms of a high level disinfectant chemistry.

39:50 But who knows if there may not be another adjacent technology that might work with the business going forward. A question from Edward. The story of TRISTEL seems to have been slow adoption of a superior product. At what point do you think there'll be a tipping point where there's a rapid adoption of this superior product? What are the factors that could accelerate this adoption? Well, I think that well, I'm not entirely sure. I agree with slow adoption. We have had fairly fairly fairly high growth rates at times during our corporate history. Certainly, we've been slowed down over the course of the last couple of years as a consequence of COVID.

40:37 But in terms of rapid adoption, well, The United States helps us provide that most definitely. So I think that you could be seeing that over the course of the next three to five years. A question from Barry. Please tell us more about the competition for your cash product for surface cleansing in various geographical areas and what percentage of the market you really hope to achieve. Okay. So our cash product consists of legacy products, which are a a chlorine dioxide trigger spray, which we brand JET, and a chlorine dioxide burstable sachet, which brings the two parts of the chemistry together. They're diluted into five liters of of water, which can be used for mopping and is often used for damp dusting within a hospital.

41:26 They make up the £3,300,000 of cash revenues that exist at the moment. Our new product range, which is going through UKCA marking at the moment and also CE marking, is the range of products that we refer to as tank and shot. And that's the the picture. I think you can see a a capsule back on page two of the presentation. I'll just flip back. And here we take a here we go there. So the hand to the right is holding a a burstable capsule. Two parts of the chemistry are dropped into a tank of water, which is then decanted into small bottles where it can be used to to damp dust.

42:11 It can form a foam, or it can be trigger sprayed onto a surface as a liquid. And this product is then then up that the range, the cash range, can now be used to decontaminate, disinfect all surfaces within a hospital. So floors, walls, high touch areas as listed on the presentation, and and it can be used by domestic staff, but also nursing staff around close to the patients. Where do we think this product can take us? Well, the the, the use of a surface disinfectant within a hospital is it's is enormous.

42:56 Every surface within a hospital is, will be disinfected, will be, will be mopped or wiped. So we certainly believe that we can equal the revenue that we are achieving within our TRISTEL product range of of medical device decontamination products with our cash range. Thank you. I think this is more of a statement than a question, so it may look for a comment rather than an answer. I hope you're not spending too much on ESG, which is very fashionable, but perhaps not necessarily good for business. Well, that's a view. It's not held by all of our investors. Certainly, our institutional investors take a a polar opposite view.

43:45 And so we try to please everybody by engaging with the subject matter. I think we are we are very we do hold a view that we're doing something very important with our products, and we want to do that in the right way and by adopting good practice, by performing our role ethically and with a view to business practice, with a view to the way the board operates, and with a view to the impact we have upon our local communities and the environment, I think that's a that's a pretty sensible approach to business. We don't spend excessively on it. No. But we engage with it because it's an important subject matter. Thank you. On the finances, the footnotes disclose pretax profit from The UK as being 4,200,000.

44:41 Could the management outline why 80% of pretax profit is derived from The UK whilst the majority of revenue is actually owned overseas? That's because of our transfer pricing policy. So we have we do all of our manufacturing within The UK, and we ship all of our product out to our subsidiaries overseas. In order to achieve the best tax profile for the entire organization, we try to keep the profits within the right places. And as a consequence, we adopted a transfer pricing policy, which means that profitability in our overseas subsidiaries is set at around over 4.5% net margin.

45:28 And so the split that you see within the the segmental reporting reflects that policy. What is the patent position on the chemistry? Okay. So we do have a patent in place. It which relates to the creation of chlorine dioxide in a foam matrix, and that patent expires in 2026. There are numerous other patents which go beyond that date, which include creating chlorine dioxide with a wipe in situ. It's they spread it further to the app, the traceability system that we have in place.

46:17 And now with respect to cash, we have patents around the capsule and the delivery systems by which chlorine dioxide is formed. So we do have ongoing patent protection for for the chemistry and for the delivery systems. But patenting is not the only IP protection that we have. The chemistry itself is protected by a as trade secret within the formulation, something that only a handful of people have access to and something that has never been reverse engineered. We've worked with some large organizations, and and we're we're happy with the security of the product.

47:05 Then we also have a number of well, in the thousands medical device compatibility statements issued by instrument manufacturers, which provide another layer of protection and a number of published papers and studies that have been performed. All of which provide quite a significant wall around our IP that we feel comfortable keeps us protected. Couple more questions. Also, thank you to Simon for the statement who says keep up the good work on the ESG side. There's a question a follow-up question from a gentleman regarding cash. Mhmm. There is clear advantage in using your medical device product as against competition, but what's your secret source advantage when it comes to surface cleaning?

48:03 The performance of the chemistry. So it is an extremely powerful biocide. It kills all all pathogens of concern, and it kills them very, very quickly. And in and in the process of doing that, the chemistry itself is extremely safe. It's a skin safe chemistry, so you can dip your hand in a bucket of solution, and it won't harm you at all. You can use it within the breathing zone, and it won't harm you. So they're the key the key features of the product, which make it very suitable for surface disinfection. And, of course, we can deliver the chemistry at a at a price that the the incumbent low level disinfectant is charging out within the hospital. So it has some fantastic features. We are we're very hopeful for the cash range.

48:58 The last questions are regarding estimates for US sales and margins. I appreciate you've already talked about the 24% royalty and that being a 100% margin. Mhmm. But can you address the question of, you know, what's what's the company's estimates for USA sales? I appreciate you're limited in what as a company you could say, but perhaps if you could talk about the Cavendish forecast that are in the market. Yes. Absolutely. So Cavendish have put out a forecast and within which they show £500,000 of royalty for 2024, and they also have extended that out to 1,400,000 of royalty in 2025. So that is the the 24% of of Parker's revenue out to their customers. So we are expecting well, Cavendish are expect expecting quite quite fast uptake and quite a significant market for the product. Thank you. That's the end of the questions.

49:55 Okay. Thanks for your time. Perfect. Thank you very much. I think you've addressed all those questions from investors. And, course, the company will review all the questions submitted today, and we'll publish those responses on the investor meet company platform. But just before redirecting investors to provide you with their feedback, which is particularly important to the company, Liz, could I just ask you for a few closing comments? Yes. Thank you very much. Well, it's a great pleasure to present you all today, and I hope you'll be as pleased with the results as we are. We will have a next trading update. The next scheduled trading update is at AGM on the December 19, and I hope we see many of you there. Thank you very much. Perfect, Liz. Thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations?

50:43 This loan take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team with TRISTEL PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.