Underlying H1 PBT jumps 35% to £1.5m
​Tristel is the UK's undisputed number 1 provider of decontamination products for small heat sensitive instruments within hospital ENT (ear, nose & throat), Ultrasound and Cardiology departments. More than 95% of its revenues are derived from high margin consumables (eg wipes, sprays, etc), where demand is being driven by increasing numbers of patients requiring diagnostic and/or non-critical care procedures.
Today's interim results to end Dec 2015 show the group's resilience as it weathers the current economic wobbles concerning slower global GDP, a Chinese hard landing and geopolitical instability - with its proprietary infection, hygiene and contamination control products generating H1'16 turnover of £8.0m, up 8.1% like-for-like.
Overseas Health was the standout performer, posting revenues up 23.5% to £2.59m. Going forward, the strategy is to maintain this pace of expansion whilst at the same time launch innovative new products to compensate for the inevitable deceleration in the more mature UK region where H1'16 domestic healthcare sales declined -1.8% to £4.15m.
More positively, adjusted H1'16 PBT (before stock based payments - 'SBPs') came in 34.5% higher at £1.48m, thanks to strict cost control, 150% cash conversion and greater operational leverage. That boosted gross margins to 71.4% (69.0%), adjusted EPS to 2.89p (+40% vs 2.07p) and closing net funds to £4.3m (£4.0m in June 2015).
We have reset our divisional projections, and now anticipate that Tristel will deliver blended revenue expansion of 7%-9% pa over the next few years. Nonetheless, despite our rebased growth outlook, FY16 and FY17 adjusted PBT (pre SBPs) targets remain unchanged at £2.9m and £3.3m respectively. Closing June 2016 net cash forecast is also lifted to £4.5m, from £4.0m before.
Our financials still do not include any upside from potential US regulatory approval. If ultimately successful, we believe this opportunity could add >100p per share to our new 125p price target - which has been trimmed from 140p reflecting the more conservative sales trajectory.Â
Tristel is a manufacturer of infection prevention and contamination control products. Its key technology is a proprietary chlorine dioxide formulation. Co. has three segments: human healthcare, which includes the manufacture, development and sale of infection control and hygine products including products that incorporate Co.'s chlorine dioxide chemistry, and are used primarily for infection controls in hospitals; animal healthcare, which involves the manufacture and sale of disinfection and cleaning products into veterinary and animal welfare sectors; and contamination control, which addresses the pharmaceutical and personal care manufacturing industries.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.