Tristel Regulatory News (TSTL)

3 Mar 2008 07:00

Tristel PLC03 March 2008 For immediate release3 March 2008 TRISTEL plc INTERIM RESULTS Tristel plc ("Tristel" or the "Group"), the infection and contamination controlbusiness, today announces its unaudited interim results for the 26 week periodended 31 December 2007. Results highlights • Turnover up 7.9% to £2.775m (2006: £2.573m) • Gross profit up 27.2% to £1.831m (2006: £1.440m) with the gross margin increasing to 66% from 56% • Operating profit (before share based payments - IFRS 2) up 18.1% to £0.476m (2006: £0.403m) • Interest expense £0.035m (2006: net interest income £0.001m) • Pre-tax profit (before share based payments - IFRS 2) up 9.2% to £0.441m (2006: £0.404m) • Basic EPS 1.22p (2006: 1.19p), a 2.5% increase • Interim dividend up 10% to 0.385p net per share • Balance sheet: Total net assets of £2.699m (31.12.2006: £2.115m) Commenting on current trading Paul Swinney, Chief Executive of Tristel, said: "The first half has seen another solid performance from Tristel. Sales growthwithin our core hospital business of 17.1% is an excellent achievement given thedifficulties recently reported by other suppliers to the NHS. New productintroductions are fuelling this growth. Given the relatively short time thatthese new products have been available, such as our high-level disinfectant forgeneral hospital surfaces which is effective against Clostridium difficile, wehave good reason to be confident about our prospects for the second half andbeyond. Localised difficulties within our contamination control business for the foodindustry have taken the shine off the overall Group result, but the level ofactivity has stabilised in recent months. We are pleased to announce a 10% increase in the interim dividend." For further information, please contact: Tristel plc 01638 721 500Paul Swinney, Chief ExecutivePaul Barnes, Finance Director Daniel Stewart 020 7776 6550Oliver Rigby Parkgreen Communications 020 7479 7933 or 07980 541 893Paul McManus paul.mcmanus@parkgreenmedia.com Chairman's Statement During the first half our healthcare subsidiary, Tristel Solutions, achieved avery encouraging increase in turnover of 17.1% to £2.284m. New Tristel productsthat have been introduced over the past twelve months have fuelled this growth.The products are targeted at general hospital surfaces, hospital laboratoriesand the Ear, Nose and Throat (ENT) and Ultrasound departments. With many ofthese new products only coming fully on stream in the first half period, we canlook forward to developing real momentum with them in the second half. Group turnover growth was restricted to 7.9% as a result of difficultiesencountered in our Tristel Technologies subsidiary, which we acquired in June2006. Its largest food processing customer reduced purchases of our chlorinedioxide wash products by £137,000 over the period, causing the subsidiary'sturnover to fall by 21% to £0.491m (2006: £0.621m). Sales levels have nowstabilised. The benefits to the Group of establishing in-house manufacturing continued toflow through with gross margins reaching 66%, 10 percentage points higher thanin the comparable period last year. Gross profit increased by 27.2% to £1.831m.To facilitate further expansion we have secured additional premises of 5,500sq. ft. adjacent to our existing facility and now have production, warehousingand office space totalling 22,000 sq. ft. The corollary of increasing the scale and size of the Group's business has beenan increase in overheads which, excluding depreciation and amortisation and theshare based payments charge - IFRS 2, rose 29.2% to £1.218m from £0.943m. Operating profits, after share based payments charges occasioned by IFRS 2 of£0.015m, rose by 14.4% to £0.461m (2006: £0.403m) and at the pre-tax level,profits after the share based payments charge, increased by 5.4% to £0.426m(2006: £0.404m), held back by finance expense of £35,000 (2006: net interestincome of £1,000). Dividend In line with our progressive dividend policy we are declaring an interimdividend of 0.385p per share, an increase of 10% over the interim dividenddeclared last year. The dividend will be paid on 9 April 2008 to shareholderson the register at the close of business on 14 March 2008. Current trading Our product development and marketing strategy of the past two years is bearingfruit with a continuous stream of new product introductions broadening andstrengthening the business. Whilst the first half downturn in the TristelTechnologies business is disappointing, sales have now stabilised and ouroutlook for the medium term is optimistic. We are very encouraged by theprogress that our hospital based business, Tristel Solutions, is making. Ourburstable sachet product is starting to gain real momentum in hospitals where itis gaining recognition as a more effective, safer and simpler product forcleaning and disinfecting floors and walls than the bleach type productscurrently used. Our overseas business development activities continue to make progress, withsales over the first seven months of the current financial year almost equallingthose achieved last year. We have new products to launch in the coming months, notably our sophisticatedtray branded "Stella" and our ENT scope washer branded "Shine". Stella has beendeveloped in New Zealand with a leading urologist and Shine in partnership witha German manufacturer of decontamination equipment. Both projects have takensignificant investments in tooling and start-up inventory. We look to forwardto these new products fuelling continued growth in the coming months. In summary, the first half result is very encouraging and we look forward to asuccessful second half of the year. Francisco A. SolerChairman 3 March 2008 CONDENSED CONSOLIDATED INCOME STATEMENTRESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000Revenue 2,775 2,573 5,148Cost of sales (944) (1,133) (1,943)Gross profit 1,831 1,440 3,205Other income 10 - 20Administrative expenses - share based payments (IFRS2) (15) (-) (30)Administrative expenses - depreciation and amortisation (147) (94) (206)Administrative expenses - other (1,218) (943) (1,859)Total administrative expenses (1,380) (1,037) (2,095)Operating profit before exceptional item 461 403 1,130Exceptional item - - (349)Operating profit 461 403 781Finance income - 3 7Finance costs (35) (2) (1)Net finance income (35) 1 6Profit before taxation 426 404 787Taxation (128) (121) (236)Profit for the period 298 283 551 Attributable to: 298 283 551 Equity holders of the parentProfit per share from continuing operationsBasic (pence) 4 1.22 1.19 2.30Diluted (pence) 1.20 1.17 2.26 All amounts relate to continuing operations. There are no recognised gains orlosses other than the losses shown above. CONDENSED STATEMENT OF RECOGNISED INCOME AND EXPENSEFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Profit for the period 298 283 551 Total recognised income and expense for the period 298 283 551Attributable to: 298 283 551 Equity holders of the parent All amounts relate to continuing operations. There are no recognised gains andlosses other than the profits shown above. CONDENSED CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2007 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000Non-current assetsGoodwill 774 774 774Intangible assets 1,565 554 1,495Property, plant and equipment 789 625 734 3,128 1,953 3,003Current assetsInventories 528 449 488Trade and other receivables 1,234 1,046 1,147Cash and cash equivalents 248 87 38 2,010 1,582 1,673Total assets 5,138 3,535 4,676 Capital and reserves attributable to the company's equity 5holdersCalled up share capital 244 238 244Share premium account 1,750 1,456 1,750Merger reserve 478 478 478Retained earnings 227 (57) 158Equity attributable to equity holders of parent 2,699 2,115 2,630 Current liabilitiesTrade and other payables 1,543 992 1,369Bank overdraft 269 - 165Interest bearing loans and borrowings 122 - 100Current tax liabilities 323 302 230Total current liabilities 2,257 1,294 1,864Non-current liabilitiesDeferred tax liabilities 182 126 182Total non-current liabilities 182 126 182Total liabilities 2,439 1,420 2,046Total equity and liabilities 5,138 3,535 4,676 The financial statements were approved by the Board of Directors on 3 March2008, and were signed on its behalf by: Paul Barnes FCCAFinance Director3 March 2008 CONDENSED CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 Note 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Cash flows from operating activitiesCash generated from operating activities 6 670 485 1,243Interest paid (35) (2) (1)Corporation tax paid (35) - (129)Net cash from operating activities 600 483 1,113Cash flows from Investing activitiesInterest received - 3 7Purchases of intangible assets (127) (17) (462)Purchases of property, plant and equipment (154) (148) (545)Proceeds on sale of property, plant and equipment 9 -Acquisition of subsidiary undertaking - 23 -Net cash (used in)/from investing activities (272) (139) (1,000)Financing activitiesEquity dividends paid (244) (173) (256)Net cash used in financing activities (244) (173) (256)Increase/(decrease) in cash and cash equivalents 84 171 (143)Cash and cash equivalents at the beginning of the period (227) (84) (84)Cash and cash equivalents at the end of the period (143) 87 (227) NOTES TO THE ACCOUNTSFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 1. PRINCIPAL ACCOUNTING POLICIES Basis of Preparation For the year ending 30 June 2007, the Group prepared consolidated financialstatements under International Financial Reporting Standards ('IFRS') as adoptedby the European Commission. These will be those International AccountingStandards, International Financial Reporting Standards and relatedinterpretations (SIC-IFRIC interpretations), subsequent amendments to thosestandards and related interpretations, future standards and relatedinterpretations issued or adopted by the IASB that have been endorsed by theEuropean Commission. This process is ongoing and the Commission has yet toendorse certain standards issued by the IASB. The interim financial report has been prepared using accounting policiesconsistent with IFRS and in accordance with IAS 34 'Interim Financial Reporting'and is the Group's second interim report under IFRS. Accounting Policies The interim report is unaudited and has been prepared on the basis of IFRSaccounting policies. The accounting policies adopted in the preparation of this unaudited interimfinancial report are the same as the most recent annual financial statementsbeing those for the year ended 30 June 2007. Segments For management purposes, the Group reports its entire activities as onebusiness. Accordingly, the Directors consider currently there to be only onereportable segment, being the development, manufacture and supply of productswhich utilise the group's chlorine dioxide technologies. 2. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information for the six months ended 31 December 2007 and 31December 2006 has not been audited and does not constitute full financialstatements within the meaning of Section 240 of the Companies Act 1985. The financial information relating to year ended 30 June 2007 does notconstitute full financial statements within the meaning of Section 240 of theCompanies Act 1985. This information is based on the Group's statutory accountsfor that period. The statutory accounts were prepared in accordance withInternational Financial Reporting Standards ("IFRS") and received an unqualifiedreport and have been filed with the Registrar of Companies. 3. RECONCILIATION OF OPERATING PROFIT TO ADJUSTED OPERATING PROFIT 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Reported operating profits before taxation 426 404 787Add back: share based payments (IFRS2) 15 - 30 amortisation of other intangibles 57 43 87Adjusted operating profit 498 447 904 4. EARNINGS PER SHARE The calculation of earnings per share is based on the following profits andnumber of shares: 6 months ended 31 December 6 months ended 31 December Year ended 30 June 2007 2007 2006 (audited) (unaudited) (unaudited) 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 '000Adjusted earnings per share* 498 24,443 2.04 447 23,837 1.69 904 23,973 3.70Reconciliation to reportedearnings (net of tax at30%): amortisation of other (57) - - (43) - - (87) - -intangibles share based payments (15) - - - - - (30) - -(IFRS 2) corporation tax provision (128) - - (121) - - (236) - -Basic earnings per share 298 24,443 1.22 283 23,837 1.19 551 23,973 2.30Diluted earnings per share 298 24,798 1.20 283 24,196 1.17 551 24,328 2.26 * Adjusted earnings per share, excluding non-cash share based payments andamortisation of other intangibles, have been included as the Directors considerthat this figure provides a more useful measure of the ongoing business, as itis a more accurate reflection of cash utilisation. 5. RECONCILIATION OF MOVEMENT IN TOTAL EQUITY Called up Share share premium Merger Retained capital account reserve earnings £'000 £'000 £'000 £'000 £'000At 1 July 2006 238 1,456 478 (167) 2,005Profit recognised for the year 551 551Employee share based payments (IFRS2) 30 30Equity dividends paid (256) (256)Share issue 6 294 - - 300At 1 July 2007 244 1,750 478 158 2,630Profit recognised for the period - - - 298 298Employee share based payments (IFRS2) - - - 15 15Equity dividends paid (244) (244)At 31 December 2007 244 1,750 478 227 2,699 During the period to 31 December 2007, the Group paid an equity dividend of 1pper ordinary share (31 December 2006 - 0.725p per ordinary share.) 6. RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 6 months 6 months Year ended ended ended 30 June 31 December 2007 31 December 2006 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Profit before taxation 426 404 787Adjustments for:Depreciation and impairment 95 51 119Amortisation - other intangibles 57 43 87Share based payments expense (IFRS2) 15 - 30Loss on disposal of property plant and equipment 5 3Government grants (10) - (20)Finance costs 35 2 1Finance income - (3) (7)Operating cash flows before movement in working capital 623 497 1,000Increase in inventories (40) (54) (93)Increase in trade and other receivables (87) (114) (216)Increase in trade and other payables 174 156 552Cash generated from operating activities 670 485 1,243 7. RELATED PARTY TRANSACTIONS Transactions between the Group and Bruce Green Under the terms of a technology licence agreement between the Group andBruce Green, a shareholder in the Company, royalties of £106,128 (31 December2006 £82,292) were paid during the period to Bruce Green Limited, a privatecompany incorporated in England and Wales, owned by Mr Green. Transactions between the Group and Tom Allsworth Under the terms of a supply agreement between the Group and MedichemLimited, a private company incorporated in England and Wales, in which Mr TomAllsworth, a shareholder in the Company, is a director and shareholder, moniestotalling £56,481 (31 December 2006 £127,114) were paid during the period. Transactions between the Group and Francisco Soler On 20 June 2007 Tristel plc received a short term loan of £100,000 fromWorld Financial Trading Corporation, which was repaid on 20 September 2007. Adirector and shareholder of Tristel plc, Mr Francisco Soler is a director ofWorld Financial Trading Corporation, a member of the Financial IndustryRegulatory Authority (FINRA) in the United States of America. Transactions between the Parent and subsidiary companies As at 31 December 2007, Tristel plc was owed £201,747 (£200,826 31December 2006) by its subsidiary company Tristel Solutions Limited in respect ofintra-group transactions. Also at 31 December 2007, Tristel plc owed £362,608 (£365,441 31December 2006) to its subsidiary company Tristel Technologies Limited in respectof intra-group transactions Transactions between the Company and its subsidiaries, which arerelated parties, have been eliminated on consolidation and are not disclosed inthis note. Transactions between the Company and its subsidiaries will bedisclosed in each undertakings statutory financial statements. This information is provided by RNS The company news service from the London Stock Exchange