Audited Results for the year ended 30 June 2017
Tristel plc (AIM: TSTL), the manufacturer of infection prevention and contamination control products, announces its audited results for the year ended 30 June 2017.
Tristel's lead technology is a proprietary chlorine dioxide formulation and the Company addresses three distinct markets:
The Human Healthcare market (hospital infection prevention - via the Tristel brand)
The Contamination Control market (control of contamination in critical environments - via the Crystel brand)
The Animal Healthcare market (veterinary practice infection prevention - via the Anistel brand)
Financial Highlights Turnover up 19% to £20.3m (2016: £17.1m)
Overseas sales up 43% to £9.6m (2016: £6.7m), representing 47% of total sales (2016: 39%)
EBITDA before share-based payments up 26% to £5.4m (2016: £4.3m). Unadjusted £5.3m (2016: £3.7m)
Pre-tax profit before share-based payments up 24% to £4.1m (2016: £3.3m). Unadjusted £4m (2016: £2.6m)
EPS 8.06p, up 61% (2016: 5.01p)
Standard dividend per share for the full year increased by 21% to 4.03p (2016: 3.33p)
Net cash of £5.1m at year end (2016: £5.7m). Company remains debt free
Operational HighlightsSuccessful acquisition of Australian distributor's business
First North American regulatory submission made
France's Produit Hygiene Base accepts Duo for Ultrasound and Ophthalmology onto its list of approved disinfectant products
Investment, alongside OrbiMed Advisors, in MobileODT
Our investment in MobileODT involves us for the first time in an emerging healthcare market - point-of-care diagnostic devices connected to smart phones that require high-level disinfection. We believe this represents a significant future opportunity for Tristel."
The annual report and financial statements will be available on the Company's website www.tristel.com later today.
For further information:Tristel plc | Tel: 01638 721 500 |
Paul Swinney, Chief Executive 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 | |
Geoff Nash / Giles Rolls (Corporate Finance) | Tel: 020 7600 1658 |
Tristel continued to make good progress during the year to 30 June 2017. Sales grew to £20.3m from £17.1m in 2016, an increase of 19%. The pace of sales growth was faster than the 12% achieved last year, and above our 10-15% target. Once again, overseas sales grew faster at 43% than domestic sales at 3%, which is no surprise given the high levels of market penetration we enjoy in the United Kingdom. Overseas sales represented 47% of worldwide sales compared to 39% last year. The acquisition of our Australian distributor's business in August 2016 accounted for 39% of overall sales growth, and favourable currency rates 21%.
Underlying sales growth was 7%.
Pre-tax profit before share-based payments was £4.1m compared to £3.3m last year, an increase of 24%. Earnings per share (EPS) were 8.06 pence, up from 5.01 pence last year, an increase of 61%.
In August 2015, and again in August 2016, a special dividend of 3 pence was paid, reflecting profits performance and build-up of surplus cash. The Company has continued to be very cash generative and on 30 June 2017 the cash balance was £5.1m (£5.7m). The Board is not declaring a third consecutive special dividend at this time. In line with the Company's ordinary dividend policy, the Board is recommending that the final dividend is 2.63 pence (2016: 2.19 pence), an increase of 20%. Including the interim dividend of 1.4 pence (2016: 1.14 pence), and the proposed final dividend, the total dividend for the year will be 4.03 pence (2016:
pence excluding the special dividend), a rise of 21%. If approved, the final dividend will be paid on 15 December 2017 to shareholders on the register at 17 November 2017. The corresponding ex-dividend date is 16 November 2017.
During the year, we accelerated our investment in future growth opportunities. We spent £1.1m to acquire our Australian distributor's business, and invested £0.6m to take a 3.27% stake in the Israeli company, MobileODT. Additionally, we spent £0.1m on product development and testing (2016: £0.17m) and £0.22m (£2016: 0.12m) on patenting to protect our intellectual property. We invested £0.54m (2016: £0.34m) in regulatory approval programmes in 19 countries and recognised this cost as an expense in the year; included in this investment was an amount of £0.5m (2016: £0.13m) relating to the United States market. Our project to enter the United States commenced two years ago, and we have succeeded in making our first regulatory submission - an application to the United States Environmental Protection Agency (EPA) for our chlorine dioxide foam-based product. We intend to make further submissions to both the EPA and the Food and Drug Administration (FDA) in the years ahead.
Our people are the key element to our success. I would like to acknowledge this on behalf of our Board and thank all our employees for their contribution throughout the year.
Our core strategic objective continues to be to achieve consistent and sustainable growth of the business and the value of our shareholders' investment in the Company. Our target is to grow revenue within a range of 10% to 15% as an annual average over the three years to June 2019 whilst maintaining a minimum pre-tax margin of 17.5%. If we achieve these two key objectives we will have created the conditions for consistent and sustainable growth in earnings and dividends. Our core objective is grounded in the belief that, over time, share price growth will follow EPS growth and the cash returns we achieve for our shareholders.
These are exciting times for Tristel as we enter the North American market and bring the highest standards of medical device decontamination to the developing world: both new opportunities, but both consistent with our focus of the past twenty years.
My Board colleagues and I look forward to Tristel's future with continued confidence.
Francisco Soler Chairman
Chief Executive's Report Current year - OverviewWe are pleased to report that during the year Group revenue increased by 19%, adjusted pre-tax profit increased by 24% and we achieved a pre-tax profit margin of 20%. We ended the year with cash of £5.1m. The Company remains debt-free.
In our 2014 financial year, when revenue was £13.5m, we set a revenue target of £20m to be achieved in the financial year ending 30 June 2017 - an increase of almost 50% in sales over a three-year period - and we are pleased to report that this target has been achieved. In October 2016, we laid out our plans for the three years to 30 June 2019. The current objectives are sales growth in the range of 10% to 15% per annum as an annual average over the three years, which is a key performance indicator (KPI) of the Company. We also set an objective of achieving a pre-tax profit margin of at least 17.5% - our second KPI. We can report that both these targets have been met in 2017, the first year of the current three-year plan.
We are proposing a final dividend of 2.63 pence per share (2016: 2.19 pence), making 4.03 pence (2016: 3.33 pence) in total for the year, up 21%.
Some of the key events that took place during the year, were:
In August 2016, we acquired our Australian distributor's business for £1.1m. The new subsidiary generated incremental profit before tax during the year of £0.824m;
Also in August 2016, we paid a special dividend of 3 pence;
We made a strategic investment in June 2017 of £0.6m (US$0.75m) in the Israeli company, MobileODT ("MODT"). MODT is a business that combines smartphone technology with hand-held medical devices to make diagnostics available at point- of-care.
Our entire business is focussed on preventing the transmission of microbes from one object or person to another. We pursue this purpose because some 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 surface or medical instrument.
We are unique worldwide in using chlorine dioxide as a high-performance disinfectant for medical instruments. And we are 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, especially acute hospitals, where the risks of infection to individuals are highest. In the human healthcare market, we brand our products Tristel. The risk of cross infection is also relevant to veterinary practices, or animal hospitals, and in the animal healthcare market we brand our products Anistel. Finally, the control of microbial contamination is very relevant in critical manufacturing environments, for example cleanrooms, and in this market our products are branded Crystel.
An acute 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 men and women'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 truly dominant market positions.
Chief Executive's Report - continuedThe investment that we made in MODT involves us in a new market for our chlorine dioxide high-level disinfectants - healthcare in the lesser-resourced areas of the world - and, in terms of population, a far larger marketplace.
There are 5.8 billion people worldwide who have no access to healthcare that we would consider adequate, yet a great number of this population has access to a mobile phone. In low resource settings, whether on the African continent or in rural America, medical care is provided by nurses, trained to a general level of medical knowledge. Smartphones, combined with devices that can illuminate a part of the body and take a picture, or carry out an ultrasound scan, enable community nurses to examine the patient and transmit images for consultation that can be provided remotely. In time, artificial intelligence will provide diagnosis. This is a new frontier in medicine that is developing rapidly.
During our twenty-year experience in infection prevention, we have observed that disinfection is often an afterthought in medical device innovation. Our high-level disinfectants, dispensed in portable, easy-to-use formats of foam, wipes and sprays, are the only way in which these new frontier devices can be disinfected safely in a community clinic in a remote area to the same level that would be demanded in a sophisticated Western European hospital.
MODT is involved in this exciting development in healthcare, and has had the foresight to acknowledge the importance of disinfection. With its focus on women's health, a key area for Tristel, we are making this investment to cement our relationship. MODT plans next to make its technology platform available in Ear, Nose and Throat medicine (ENT), another stronghold for our Company. We believe our participation in the ownership of MODT will not only benefit Tristel strategically, but will also produce an attractive return for our own shareholders in time.
How We Service Our MarketOver 95% 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 repeat training. capital sales, service and maintenance revenues 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 direct operational presence, and through distributors in markets where we have no presence.