Tristel Regulatory News (TSTL)

RNS Number : 2007I

Tristel PLC

08 March 2010

 

 

 

 

TRISTEL plc

 

UNAUDITED INTERIM RESULTS

 

Tristel plc ("Tristel" or the "Group"), the infection and contamination control business, announces its interim results for the 26 week period ended 31 December 2009.

 

Results highlights

 

·; Revenue up 28.0% to £4.027m (2008: £3.146m)

·; Gross profit up 24.1% to £2.540m (2008: £2.047m)

·; Gross margin 63.1% (2008: 65.1%)

·; Pre-tax profit up 39.9% to £0.656m (2008: £0.469m) 

·; Basic EPS 1.59p (2008: 1.23p), a 29.3% increase

·; Interim dividend of 0.425p net per share (2008: 0.405p), a 5% increase

·; Net assets of £7.867m (2008: £4.354m)

·; Strong operational cashflow: net cash £0.843m at 31 December 2009 (2008: £0.011m overdraft)

 

Operational highlights

 

·; Successful integration of the manufacture of the Medichem product portfolio, boosting Group turnover and increasing utilisation of our manufacturing plant

·; Increasing take up of Tristel surfaces range by UK hospitals aided by their inclusion in the National Patient Safety Agency's "Revised Healthcare Cleaning Manual"

·; Overseas sales increased by 20% on previous period. Significant expansion opportunities overseas.

·; Fund raising to satisfy institutional demand completed on 26 November 2009, raising £2m

·; Funds deployed to accelerate registration programmes for Tristel products in key overseas markets

·; Group is debt free

 

Commenting on current trading, Paul Swinney, Chief Executive of Tristel, said:

 

"The first half has seen yet another strong performance from the Group. Integrating the manufacture of the Medichem portfolio of disinfectants, which we acquired on 3 July, has been challenging, but successful and has made a significant contribution to top line growth. Our Tristel products have continued to win new hospital customers in the United Kingdom and overseas, with overseas sales increasing by 20% on the comparable period last year.

 

"Reflecting our continuing progress we are pleased to announce the payment of an interim dividend of 0.425p, a 5% increase on last year."

 

For further information, please contact:

Tristel PLC
Paul Swinney, Chief Executive	Tel: 01638 721 500
Walbrook PR Ltd	Tel: 020 7933 8787
Paul McManus	Mob: 07980 541 893
	paul.mcmanus@walbrookpr.com
FinnCap
Geoff Nash/Rhydian Bankes (Corporate Finance)	Tel: 020 7600 1658
Simon Starr (Corporate Broking)

 

 

Chairman's Statement

The first half has seen a very strong performance from the Group. Manufacture of the Medichem portfolio of disinfectant products, which was acquired on 3 July 2009, has been successfully integrated into our Newmarket facility. The Medichem product range contributed £0.594m to the increase in the Group's first half turnover. By December 2009 we had taken over the blending and packing of approximately 65% of the portfolio by value and the remainder will be manufactured in house during the second half. Because of the phased transition of manufacture from the previous supplier, some of the gross margin from this activity has yet to be captured and we anticipate an improvement in margins in the second half. 

 

Turnover in the Tristel portfolio of chlorine dioxide based disinfectants increased by 9.1%. We continue to make excellent progress in securing new hospital users of our surface disinfection products. In almost all cases we are replacing chlorine (hypochlorite) based products, chlorine being the chemistry most widely used by hospitals for general surfaces. Take up of our products has been greatly aided by our inclusion in the National Patient Safety Agency's "Revised Healthcare Cleaning Manual" published in June 2009. The Manual acknowledges Tristel as one of the new technologies benefitting hospitals for terminal cleans and during infection outbreaks. 

 

Turnover generated by overseas distributors and subsidiaries increased to £0.184m in the first half, a 20% increase on the comparable period last year. We aim to continue this growth and are pressing ahead with the registration of Tristel products in many important markets, including Russia and China. We deployed part of the proceeds of the £2m share issue concluded in November 2009 to accelerate this process.

 

Overheads have been successfully controlled during the period with a 19.1% increase in overheads trailing revenue growth. 

 

Pre-tax profits increased by 39.9% and Basic EPS by 29.3%

 

Dividend

 

We are declaring an interim dividend of 0.425p, an increase of 5%. The dividend will be paid on 31 March 2010 to shareholders on the register at the close of business on 19 March 2010.

 

Current trading

 

Infection control continues to be a key issue within the National Health Service. It is equally a top priority in all the overseas markets in which we operate. Our Tristel products are innovative, have a well proven safety record and are amongst the highest performing biocides. As a consequence, we believe that our core activity of hospital infection control will be resilient to the financial constraints being imposed on hospitals. 

 

Through acquisition and organic growth the Group has become larger, more diversified in the areas within healthcare in which our technology and products are used, has gained exposure to animal healthcare through the Medichem portfolio and is more effectively using its manufacturing capability. We are well placed to continue our unbroken record of revenue and profits growth and look forward to a successful second half of the year.

 

Francisco A. Soler

Chairman 8 March 2010

 

 

	Note	6 months ended	6 months ended	Year ended
		31-Dec-09	31-Dec-08	30-Jun-09
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Revenue		4,027	3,146	6,847
Cost of sales		(1,487)	(1,099)	(2,402)
Gross profit		2,540	2,047	4,445
Other income		10	10	20
Administrative expenses - share based payments (IFRS2)		(12)	(20)	(14)
Administrative expenses - depreciation and amortisation		(242)	(193)	(402)
Administrative expenses - other		(1,640)	(1,377)	(2,766)
Total administrative expenses		(1,894)	(1,590)	(3,182)
Operating profit		656	467	1,283
Finance income		2	6	9
Finance costs		(2)	(4)	(7)
Net finance income		-	2	2
Profit before taxation		656	469	1,285
Taxation		(184)	(137)	(366)
Profit for the period		472	332	919
Attributable to:
Equity holders of the parent		480	332	919
Minority interests		(8)	-	-
		472	332	919
Profit per share from continuing operations
attributable to equity holders of the parent	3
Basic (pence)		1.59p	1.23p	3.42p
Diluted (pence)		1.52p	1.19p	3.31p

 

All amounts relate to continuing operations.

 

		6 months ended	6 months ended	Year ended
		31-Dec-09	31-Dec-08	30-Jun-09
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Profit for the period		472	332	919
Other comprehensive income
Exchange differences on translating foreign operations		(10)	-	-
Other comprehensive income, net of tax		(10)	-	-
Total comprehensive income for the period		462	332	919
Attributable to:
Equity holders of the parent		470	332	919
Minority interests		(8)	-	-
		462	332	919

 

 

 

	Share		Share		Merger		Retained earnings		Total		Minority interests		Total equity
	capital		premium		reserve
			account
	£'000		£'000		£'000		£'000
									£'000		£'000		£'000
01-Jul-08	269		2,663		478		905		4,315		-		4,315
Profit for the period ended 31 December 2008							332		332		-		332
Dividends paid							(313)		(313)		-		(313)
Share based payments - IFRS 2							20		20		-		20
31-Dec-08	269		2,663		478		944		4,354		-		4,354
Profit for the period ended 30 June 2009							587		587		-		587
Dividends paid							(109)		(109)		-		(109)
Share based payments - IFRS 2							(6)		(6)		-		(6)
Shares issued	-		-				-		-		-		-
30-Jun-09	269		2,663		478		1,416		4,826		-		4,826
Profit for the period ended 31 December 2009							480		480		(8)		472
Dividends paid							(383)		(383)		-		(383)
Share based payments - IFRS 2							12		12		-		12
Shares issued	62		2,888				-		2,950		-		2,950
Exchange differences on translating foreign operations							(10)		(10)		-		(10)
31-Dec-09	331		5,551		478		1,515		7,875		(8)		7,867

	Note	6 months ended	6 months ended	Year ended
		31-Dec-09	31-Dec-08	30-Jun-09
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Non-current assets
Goodwill		779	779	779
Intangible assets	5	5,004	2,107	2,317
Property, plant and equipment		1,091	848	980
Investments		93	17	37
Deferred tax		87	33	31
		7,054	3,784	4,144
Current assets
Inventories		998	874	801
Trade and other receivables		2,076	1,342	1,611
Cash and cash equivalents		843	-	18
		3,917	2,216	2,430
Total assets		10,971	6,000	6,574
Capital and reserves attributable to the company's equity holders
Called up share capital		331	269	269
Share premium account		5,551	2,663	2,663
Merger reserve		478	478	478
Retained earnings		1,515	944	1,416
Equity attributable to equity holders of parent		7,875	4,354	4,826
Minority interest		(8)	-	-
Total Equity		7,867	4,354	4,826
Current liabilities
Trade and other payables		1,137	1,046	963
Bank overdraft		-	11	356
Interest bearing loans and borrowings		29	48	51
Current tax liabilities		615	510	375
Total current liabilities		1,781	1,615	1,745
Non-current liabilities
Interest bearing loans and borrowings		-	31	3
Deferred consideration		1,323	-	-
Total non-current liabilities		1,323	31	3
Total liabilities		3,104	1,646	1,748
Total equity and liabilities		10,971	6,000	6,574

 

 

	Note	6 months ended	6 months ended	Year ended
		31-Dec-09	31-Dec-08	30-Jun-09
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Cash flows from operating activities
Cash generated from operating activities	4	1,735	558	1,236
Interest paid		(2)	(4)	(7)
Corporation tax paid		-	-	(281)
		1,733	554	948
Cash flows from Investing activities
Interest received		2	6	9
Purchases of intangible assets		(2,776)	(186)	(482)
Purchases of property, plant and equipment		(274)	(126)	(404)
Acquisition of investments		(56)	-	(20)
Proceeds on sale of property, plant and equipment		10	4	4
Net cash (used in) investing activities		(3,094)	(302)	(893)
Cash flows from Financing activities
Loans repaid		(25)	(26)	(47)
Share issues		2,950	-	-
Equity dividends paid		(383)	(313)	(422)
Net cash from financing activities		2,542	(339)	(469)
Increase/(decrease) in cash and cash equivalents		1,181	(87)	(414)
Cash and cash equivalents at the beginning of the period		(338)	76	76
Cash and cash equivalents at the end of the period		843	(11)	(338)

 

1. PRINCIPal ACCOUNTING POLICIES

Basis of Preparation

For the year ending 30 June 2009, the Group prepared consolidated financial statements under International Financial Reporting Standards ('IFRS') as adopted by the European Commission. These will be those International Accounting Standards, International Financial Reporting Standards and related interpretations (SIC-IFRIC interpretations), subsequent amendments to those standards and related interpretations, future standards and related interpretations issued or adopted by the IASB that have been endorsed by the European Commission. This process is ongoing and the Commission has yet to endorse certain standards issued by the IASB.

These condensed consolidated interim financial statements have been prepared under the historical cost convention. They are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and which are, or are expected to be, effective at 30 June 2010. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2009. These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2009. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

Accounting Policies

The interim report is unaudited and has been prepared on the basis of IFRS accounting policies.

The accounting policies adopted in the preparation of this unaudited interim financial report are the same as the most recent annual financial statements being those for the year ended 30 June 2009 other than in respect of a new accounting policy for deferred consideration. The group adopted IFRS 8, Operating Segments, early by including them in the financial statements for the year ended 30 June 2009.

Segments

The Group adopted IFRS 8 with effect from its 30 June 2009 and reports its entire activities as one business. Accordingly, the Directors consider currently there to be only one reportable segment, being the development, manufacture and supply of products which utilise the group's chlorine dioxide technologies.

Deferred Contingent Consideration on Purchase of Intangibles

Where a liability arising from an intangible asset acquisition is contingent on future events, if it is considered that further consideration is probable and its fair value can be measured reliably, the probable contingent payment is included in the cost of the acquisition of the Intangible at the acquisition date, to be flexed, where appropriate against the final deferred payment.

2. Publication of non-statutory accounts

The financial information for the six months ended 31 December 2009 and 31 December 2008 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006.

The financial information relating to the year ended 30 June 2009 does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. This information is based on the Group's statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards ("IFRS") and received an unqualified audit report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These financial statements have been filed with the Registrar of Companies.

3. EARNINGS PER SHARE

The calculation of earnings per share is based on the following profits and number of shares:

 

	6 months ended 31 December 2009				6 months ended 31 December 2008				Year ended 30 June 2009
	(unaudited)				(unaudited)				(audited)
		Number	Pence			Number	Pence			Number	Pence
	Profit	of shares	per share		Profit	of shares	per share		Profit	of shares	per share
	£'000	'000			£'000	'000			£'000	'000
Adjusted earnings per share*	765	30,193	2.53		564	26,883	2.1		1,460	26,883	5.43
Reconciliation to reported earnings (net of tax at 28%):
amortisation of other intangibles	-89	-	-		-75	-	-		-161	-	-
share based payments (IFRS 2)	-12	-	-		-20	-	-		-14	-	-
corporation tax provision	-184	-	-		-137	-	-		-366	-	-
Basic earnings per share	480	30,193	1.59		332	26,883	1.23		919	26,883	3.42
Diluted earnings per share	480	31,554	1.52		332	27,963	1.19		919	27,781	3.31

 

* Adjusted earnings per share, excluding non-cash share based payments and amortisation of other intangibles, have been included as the Directors consider that this figure provides a more useful measure of the ongoing business, as it is a more accurate reflection of cash utilisation.

 

 

4. RECONCILIATION OF operating PROFIT to net cash outflow from operating activities

		6 months ended	6 months ended	Year ended
		31-Dec-09	31-Dec-08	30-Jun-09
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Profit before taxation		656	469	1,285
Adjustments for:
Depreciation and impairment		153	122	241
Amortisation - other intangibles		89	75	161
Share based payments expense (IFRS2)		12	20	14
(Profit)/Loss on disposal of property plant and equipment		3	(4)	23
Government grants		(10)	(10)	(20)
Finance costs		2	4	7
Effect of foreign exchange rates		(13)	-	-
Finance income		(2)	(6)	(9)
Operating cash flows before movement in working capital		890	670	1,702
Increase in inventories		(197)	(236)	(163)
(Decrease)/Increase in trade and other receivables		(465)	25	(244)
Increase/(Decrease) in trade and other payables		1,507	99	(59)
Cash generated from operating activities		1,735	558	1,236

 

5. PURCHASE OF INTANGIBLES IN THE PERIOD

On 3rd July 2009 the Group acquired the intellectual property and manufacturing rights to a portfolio of infection control products manufactured by Medichem International (Manufacturing) Limited, a private company incorporated in England and Wales ("Medichem"). The total cost of the intangibles included in these Interim Financial Statements amounts to £2.48M of which deferred contingent consideration amounts to not less than £1.15 million but subject to a maximum of £1.4 million, payable over 5 years, calculated as a percentage of sales of Medichem products. 

Monies totalling £1.08 million were paid during the period.

Management have included the maximum amount payable of £2.48M in these Interim Financial Statements, based on current performance and expectation and consider this amount to be the fair value of the purchase.

During the period to 31 December 2009, under the terms of the supply agreement between the Group and Medichem, in which Mr Tom Allsworth, (a shareholder in Tristel), is a director and shareholder, monies totalling £317,000 were payable (31 December 2008 £102).

In addition under the terms of a deed of assignment between the Group and Mr Tom Allsworth, monies totalling £17,000 (31 December 2008 £nil) were payable during the period.

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