Tristel Regulatory News (TSTL)

19 Feb 2007 07:01

Tristel PLC19 February 2007 TRISTEL plc INTERIM RESULTS Tristel plc ("Tristel"), the infection and contamination control business, todayannounces its interim results for the 26 weeks ended 31 December 2006. Results highlights • Turnover up 44% to £2.57m (2005: £1.79m) • Gross profit up 48% to £1.44m (2005: £0.97m) with the gross margin increasing to 56% from 54.4% • Operating profit up 31.5% to £0.403m (2005: £0.307m) • Pre-tax profit up 23.4% to £0.404m (2005: £0.327m) • Interim dividend of 0.35p net per share, a 27% increase • Basic EPS 1.19p (2005: 1.03p), a 15.5% increase • Balance sheet: Total net assets of £2.115m (31.12.2005: £1.745m) • Transfer of manufacture of all group products to a new production facility being established in Newmarket Commenting on current trading Paul Swinney, Chief Executive of Tristel, said: "Our core business of supplying instrument sterilants (in solution and wipeform) to United Kingdom hospitals is steady, with much of the increase in firsthalf turnover being contributed by Tristel Technologies, the company that weacquired in June 2006. The integration of Tristel Technologies is complete andthe company is making good progress in expanding its activities of legionellacontrol in hospitals and contamination control in the food growing andprocessing industries. Export sales continued to grow during the period. In acquiring Tristel Technologies we have manufactured products for the firsttime in our corporate history. With this experience, and in order to gaintighter control over our expanding intellectual property portfolio, we havetaken the important strategic decision to assume the manufacture of TristelSolutions' products from our contract manufacturer. The acquisition of thesemanufacturing rights will increase gross margins and earnings once our newproduction facility is fully operational, which we anticipate will be in May2007." For further information, please contact: Tristel plc Parkgreen Communications LtdPaul Swinney, Chief Executive Paul McManusPaul Barnes, Finance Director Ben KnowlesTel: 01638 721 500 Tel: 020 7479 7933 Mob: 07980 541 893http://www.tristel.com paul.mcmanus@parkgreenmedia.com Chairman's Statement We have made good progress during the first half of the 2006/2007 financialyear. Our core healthcare business, Tristel Solutions, achieved an underlyingincrease in turnover of 9.2% to £1.951m, with export sales continuing to grow.Tristel Technologies, the legionella and contamination control business that weacquired in June 2006, achieved sales in the first half of £0.621m. Gross margins on the Group's products increased to 56% from 54.4%, reflectingour greater purchasing power as we sell higher volumes of recently introducedproducts, such as the ENT wipes system. We can look forward to furtherimprovements in gross margin as we commence the in-house manufacture of allgroup products. When we acquired Tristel Technologies we became a manufacturer of chemicalsolutions for the first time in our corporate history. The blending andbottling of Tristel Solutions' sterilant products has always been outsourced. Inorder to give us greater protection over our intellectual property we have takenthe decision to establish a manufacturing facility in Newmarket. The productionactivities in Bolton will be re-located to Newmarket and we are assuming themanufacture of the sterilant products from our prime contract manufacturer. Thetransfer of the manufacturing know-how and termination of the manufacturingagreement will cost £600,000. When the transfer is finally completed, Mr TomAllsworth, owner of the Company's contract manufacturer, has agreed to subscribefor 606,060 ordinary shares of the Company at an issue price of 49.5p, theaverage daily share price over the period 2nd January 2007 to 14th February2007. Taking on the manufacture of all group products will result in a significantincrease in gross margins once the production facility has become fullyoperational in May. We expect the transaction to have a neutral impact onearnings in the current financial year and to enhance earnings in the 2007/2008financial year. New products that have been launched in the first half - a range for generalhospital surfaces and a suite of products that are bespoke for ultrasounddepartments in hospitals - are expected to contribute to the group's continuedsales growth in the second half. ClearKlens Bi-Spore, the co-branded productthat Johnson Diversey has launched for the pharmaceutical clean room market, isproceeding satisfactorily through various validation studies with majorpharmaceutical manufacturers. The growth in first half turnover has not fed through to a commensurate increasein operating profits. This is due to a 56% increase in administrative costs, inlarge part reflecting the addition of personnel required for manufacture andsupporting administrative activities. At the pre-tax level, profits increased by 23.4% to £404,269. Pre-tax profitsof £327,481 in the corresponding first half of 2005/2006 had benefited from netinterest income of £20,863 (first half 2006/2007: £1,170), reflecting cashbalances arising from our flotation in June 2005. This cash was used topurchase Tristel Technologies in June 2006. Dividend We are declaring an interim dividend of 0.35p per share, an increase of 27% overthe interim dividend declared last year, and in line with our progressivedividend policy. The dividend will be paid on 6 April 2007 to shareholders onthe register at the close of business on 2 March 2007. Current trading Both of our operating subsidiaries, Tristel Solutions and Tristel Technologies,sell consumable products to a widespread customer base, located primarily atpresent in the United Kingdom. Tristel Solutions' focus is predominantly thehospital sector, whilst Tristel Technologies serves a broader range of sectors. We have yet to determine whether the Group will encounter a temporary downturnin National Health Service spending as was experienced towards the end of lastyear's NHS budgetary cycle. However, the Group's portfolio is better balancedthan a year ago, in particular due to the acquisition of Tristel Technologiesand its successful integration, and we would hope to be better insulated fromsuch conditions if they materialise. We have a healthy pipeline of new, innovative products. Amongst these, we havegreat hopes for the Tristel sterilising tray which should be launched later thisfinancial year. We acquired the technology rights to the tray design in August2006 and have made a significant investment in developing it over the past ninemonths. The tray could re-define the way in which endoscopic instruments aredecontaminated in many overseas markets. In summary, the first half result is very pleasing and we look forward to asuccessful second half of the year. Francisco A. Soler Chairman 19th February 2007 GROUP PROFIT & LOSS ACCOUNTFor the 6 months ended 31 December 2006 6 months ended 31/12 6 months ended 31/ /06 12/05 (unaudited) (unaudited) Note £ £ Turnover 2,572,723 1,787,447Cost of sales 1,132,405 814,080 Gross profit 1,440,318 973,367Administrative costs 1,037,219 666,749Other operating income - - Operating profit 403,099 306,618 403,099 306,618Interest receivable and similar 3,204 20,863incomeInterest payable and similar charges (2,034) - Profit on ordinary activities before 404,269 327,481taxationTaxation 2 (121,281) ( 81,870) Profit on ordinary activities after 282,988 245,611taxationDividends (172,817) ( 65,551) Retained profit for the period 110,171 180,060 Earnings per share 4Basic 1.19p 1.03pDiluted 1.19p 1.03p The group has no recognised gains or losses other than as shown above. GROUP BALANCE SHEETAs at 31 December 2006 As at 31/12/06 As at 31/12/05 (unaudited) (unaudited) Note £ £Fixed assetsIntangible fixed assets 821,591 852,971Goodwill 506,194 -Tangible fixed assets 625,342 123,769 1,953,127 976,740 Current assetsStocks 449,434 329,248Debtors 1,045,900 604,623Cash at bank and in hand 87,026 860,168 1,582,360 1,794,039Creditors: Amounts falling due within one year 1,293,778 929,423 Net current assets 288,582 864,616 Total assets less current liabilities 2,241,709 1,841,356Provisions for liabilities and charges (125,846) ( 96,456) Net assets 2,115,863 1,744,900 Capital and reservesCalled up share capital 5 238,368 238,368Share premium account 5 1,455,980 1,455,980Merger reserve 5 478,526 478,526Profit and loss account 5 (57,011) ( 427,974)Equity shareholders' funds 2,115,863 1,744,900 GROUP CASH FLOW STATEMENTFor the 6 months ended 31 December 2006 6 months ended 6 months 31/12/06 ended 31/12/05 (unaudited) (unaudited) Note £ £Net cash inflow/(outflow) from 1 484,885 (62,210)operating activitiesInterest paid (2,034) - Net cash from operating activities 482,851 (62,210) Cash flows from investing activitiesPurchase of intangible fixed assets (17,010) (80,236)Purchase of tangible fixed assets (148,199) (49,359)Sale of tangible fixed assets - 3,000Acquisition of subsidiary 23,070 -Interest received 3,204 20,863 Net cash from investing activities (138,935) (105,732) Cash flows from financing acitivitiesDirectors' loans repaid - (5,980)Equity dividends paid (172,817) (119,184) Net cash from financing activities (172,817) (125,164) Increase/(decrease) in cash and cash 171,099 (293,106)equivalents Cash and cash equivalents at (84,073) 1,153,274beginning of period Cash and cash equivalents at end of 2 87,026 860,168period NOTES TO THE GROUP CASH FLOW STATEMENTFor the 6 months ended 31 December 2006 6 months 6 months ended 31/12/06 ended 31/12/05 (unaudited) (unaudited) £ £1. Reconciliation of operating profit to net cash inflow/(outflow) from operating activitiesOperating profit 403,099 306,618Depreciation charges 94,525 75,737Loss on disposal of fixed assets - 273Increase in stocks (54,241) (118,693)Increase in debtors (114,594) (58,134)Increase/(decrease) in creditors 156,096 (268,011) Net cash inflow/(outflow) from operating 484,885 (62,210)activities 2. Cash and cash equivalents At 31/12/06 At 31/12/05 £ £Net cash:Cash at bank and in hand 87,026 860,168 Total 87,026 860,168 NOTES TO THE INTERIM REPORTFor the 6 months ended 31 December 2006 1. Basis of preparation The accounts of the Group for the 6 months ended 31 December 2006, which areunaudited, were approved by the Board on 15 February 2007. They have beenprepared in accordance with the accounting policies set out in the Annual Reportand Accounts for the year ended 30 June 2006. The results contained in this statement do not constitute statutory accounts asdefined in Section 240 of the Companies Act 1985. The financial information forthe full preceding year is based on the statutory accounts for the year ended 30June 2006. Those accounts, upon which the auditors, Hedges Chandler, issued anunqualified audit opinion, have been delivered to the Registrar of Companies. The comparative unaudited 31 December 2005 results included herein have not beenre-stated to reflect changes in the accounting policies set out in the AnnualReport and Accounts for the year ended 30 June 2006. 2. Taxation Taxation for the 6 months ended 31 December 2006 is provided at 30% on profit onordinary activities (31 December 2005 - 25%), being the anticipated rate oftaxation for the period. 3. Reconciliation of movements in shareholders' funds 6 months ended 6 months 31/12/06 ended 31/12/05 (unaudited) (unaudited) £ £Profit/(loss) for the financial period 282,988 245,611Dividends (172,817) (65,551) 110,171 180,060 Net additions to shareholders' funds 110,171 180,060Opening shareholders' funds 2,005,692 1,564,840 Closing shareholders' funds 2,115,863 1,744,900 Equity interests 2,115,863 1,744,900 4. Earnings per share 6 months ended 6 months ended 31/12/06 31/12/05 (unaudited) (audited) £ £ Profit for the financial period after taxation 282,988 245,611 Weighted average number of ordinary shares 23,836,820 23,836,820for basic earnings per share Weighted average number of ordinary shares 23,836,820 23,836,820for diluted earnings per share This information is provided by RNS The company news service from the London Stock Exchange