Half-year Report

RNS Number : 1925C
Tristel PLC
21 February 2022
 

 

TRISTEL plc

("Tristel", the "Company" or the "Group")

 

Half-year Report

 

Product rationalisation to deliver faster top-line growth and higher profitability

Continued progress towards commercial launch in North America

 

Tristel plc (AIM: TSTL), the manufacturer of infection prevention products utilising proprietary chlorine dioxide technology, announces unaudited interim results for the six months to 31 December 2021.

 

During the period the Company refocused the business to accelerate top-line growth and increase profitability as it exits the pandemic. This focus is on Tristel's proprietary chlorine dioxide technology and the hospital market. These represent "Continuing operations". The Company has discontinued the manufacture and sale of most products in its Anistel and Crystel product ranges and these represent "Discontinued operations". The Discontinued operations command substantially lower margins, and the Board considers that they will not contribute to future revenue growth without significant investment.

 

 Financial highlights (from Continuing operations unless otherwise stated)

 

· Underlying revenues* up 5% to £14.5m (H1 21: £13.8m) and 17% higher than pre-pandemic H1 20

Reported revenues down 7% to £13.6m (H1 21: £14.7m)

· Gross margin of 83% (H1 21: 83%) against 53% for Discontinued products

· Reported EBITDA of £2.4m (H1 21: £3.6m)

Adjusted† EBITDA of £3.3m (H1 21: £3.9m)

· Reported EBITDA margin of 18% (H1 21: 25%) 

Adjusted† EBITDA margin 24% (H1 21: 26%)

· Reported Profit before tax of £1m (H1 21: £2.4m)

Adjusted† Profit before tax of £1.9m (H1 21: £2.6m)

· Diluted EPS 2.5p (H1 21: 3.96p)

· Interim dividend 2.62p per share (H1 21: 2.62p)

· Cash generated from operations £3.4m (H1 21: £4.2m)

· Cash of £8.8m (H1 21: £7.3m)

· Write down of intangible assets associated with Discontinued operations of £2.4m

· Revenue from Discontinued operations £1.5m (H1 21: 2.0m) down 27%

 

* Underlying revenues adjusted for £0.9m NHS Brexit pre-stocking in H1 21, unwound in H1 22

† Adjusted for share-based payment charge of £0.9m (H1 21: £0.3m)

 

Operational highlights

· Tristel (medical device disinfection) and Cache (hospital surface disinfection) are the two product portfolio brands that represent Continuing operations and, in the view of the Board, the best opportunity to deliver a faster rate of top-line growth and increased profitability

· Animal health (Anistel) and pharma/life sciences (Crystel) product ranges discontinued

· Restarted state-by-state registration of EPA-approved Duo and progressed FDA De Novo submission for Duo, anticipating submission to FDA by 30 June

 

Commenting on current trading, Paul Swinney, Chief Executive of Tristel, said: "We are pleased with our progress in the first half. We are observing a recovery in hospital activity in most of our markets.

"We are getting closer to entering the North American market, preparing to launch Duo Ophthalmology in Canada before the end of the year. In the USA we have re-commenced state-by-state registration of Duo Ultrasound under our EPA approval and are confident we will complete the FDA De Novo submission for Duo by June this year.

 

"The focus of the business is now solely on our core hospital market and our proprietary chlorine dioxide chemistry. The rationalisation of our business was substantially completed during the half, and we expect it to deliver faster top-line growth and higher profitability in the short and long term. We are going to exit this past two-year period of pandemic uncertainty with a sharper focus on the hospital market and will be better placed to capitalise on the enormous growth opportunities in healthcare where the need for our chlorine dioxide chemistry is greatest."

 

Alice Lane, Corporate Broking

 

Lianne Applegarth

Mob: 07584 391 303

 


 

 

 

 

Chairman's statement

 

Trading

 

Throughout the first half, COVID-19 has put enormous pressure on healthcare provision in all our markets. However, there are signs that hospitals are returning to pre-pandemic levels of service, although this improvement is neither uniform nor consistent. Whilst we expect this "start-stop-start" pattern to continue through the second half, the number of diagnostic procedures that generate demand for our products is reviving globally.

 

We anticipate that second half revenue from Continuing operations will be higher than first half revenue.

 

Revenues

In H1 21 the NHS purchased Tristel products in preparation for Brexit. During the first half of the current financial year this inventory was fed back into the NHS system and used. Revenue in the comparative period last year was boosted by the Brexit purchase of £0.9m and this year's first half revenue has been reduced by the same amount. Adjusting for this distortion, sales of our Tristel and Cache products increased by 5% on H1 21 and were 17% higher than in H1 20, preceding the pandemic.

 

 £m

H1

2019-20

H1

2020-21

H1

2021-22

Continuing product revenue:

 

 

 

Tristel

11.9

12.8

12.2

Cache

0.5

1.9

1.4

 

 

 

 

Total Continuing product revenue

12.4

14.7

13.6

Year on year growth/(decline)

 

19%

(7%)

 

 

 

 

Discontinued product revenue

2.3

2.0

1.5

Year on year growth/(decline)

 

(13%)

(25%)

 

 

 

 

£m

H1

2019-20

H1

2020-21

H1

2021-22

 

 

 

 

Continuing product revenue

12.4

14.7

13.6

Brexit inventory

-

(0.9)

0.9

 

 

 

 

Underlying Continuing product revenue

12.4

13.8

14.5

Underlying year on year growth

 

11%

5%

 

Product range rationalisation and Discontinued operations

The Company's focus in the first half has been on our Tristel and Cache brands which represent our most significant growth opportunity. To sharpen this focus, we have discontinued the manufacture and sale of products that are:

 

· Non-chlorine dioxide based

· Not sold into our core hospital market 

 

Sales of our non-chlorine dioxide products have been declining for several years (as shown above) and have been at lower gross margins than our core chlorine dioxide portfolio. Whilst the product ranges have always made a net profit contribution and have generated cash, the revenue decline could only be reversed by making a substantial and high-risk investment in bulking up our sales and marketing activities in markets which are dominated by multinationals manufacturing generic cleaning and disinfectant products at a scale which we did not believe we would be able to match.

During the half we have discontinued over 150 SKUs. In the period, revenue of these products was £1.5m, generating gross profit of £0.8m (gross margin 53%); in the comparable period last year revenue of these products was £2.0m, generating gross profit of £1.1m (gross margin 52%). In the full year to 30 June 2021, revenue was £3.8m, generating gross profit of £2.0m (gross margin 54%).

 

By contrast, a gross margin of 83% was achieved on the continuing chlorine dioxide hospital product range. 

 

Manufacturing activity in the first half was unaffected by the rationalisation which was phased in during the period. Production volumes were in fact constant as we enabled customers to stockpile inventory so they could locate alternative products and switch to them. The positive impact of the rationalisation on overhead will start to be felt in the second half, and the full impact will be experienced next financial year. 

 

Overheads associated with Continuing operations were £0.2m lower than in the comparative period. Group headcount on 31 December 2021 was 196, compared with 189 on 30 June 2021.

 

We are experiencing labour cost increases and component and raw material price increases across the Group and are increasing prices this year to match them.

 

Group profit before tax from Continuing operations fell to £1.0m (H1 21: £2.4m), impacted by a share-based payment charge of £0.9m, which compared to £0.3m in the comparative period last year.

 

Discontinued operations produced a loss in the period of £2.2m (H1 21: profit £0.7m). The loss included a loss arising from the write down of intangible assets of £2.4m (H1 21: £nil).

 

We benefitted from a tax credit in the period of £0.2m, compared to a tax charge of £0.5m in H1 21. The write down of intangible assets has given rise to a tax deduction, creating tax losses for the UK group. As these losses can be carried forward to be utilised against profits in future years, a deferred tax asset has been recognised in respect of the losses and results in an overall tax credit for the period.

 

Cash flow

 

We have continued to be very cash generative. Cash generated from operations was £3.4m in the first half (H1 21: 4.2m). Cash increased to £8.8m at 31.12.21 from £7.3m the previous year.

 

Earnings and Dividend

 

Basic earnings per share from Continuing operations decreased from 4.07p to 2.53p. Basic loss per share from both Continuing and Discontinued operations was 2.08p in the period (H1 21: basic earnings per share of 5.62p).

 

Diluted earnings per share from Continuing operations was 2.50p (H1 21: 3.96p). Diluted loss per share from both Continuing and Discontinued operations was 2.05p (H1 21: diluted earnings per share of 5.47p).

 

The Company's policy has been to pay out half of adjusted EPS in the form of an ordinary dividend each year. Given the extraordinary circumstances caused by COVID-19, we have decided to deviate from this policy, and we will maintain the interim dividend at the same level as last year. The dividend will be 2.62p per share and will be paid to shareholders on the register on 8 April 2022. The associated ex-dividend date is 7 April 2022.

 

North America

 

We have made good progress with our De Novo submission for the USA FDA for our DUO ULT product for ultrasound equipment, and expect to make the submission by the end of the financial year.

 

Working closely with our USA manufacturing and distribution partner, Parker Laboratories ("Parker"), we took the decision during the half to restart the state registration of DUO under its USA EPA approval. As background, we received EPA federal approval in two stages over the past few years and had started to register the product in individual states. However, we decided to put this programme on hold as Parker and ourselves were unsure of the commercial opportunity for the use of DUO with the EPA approval. Whilst this approval relates to ultrasound equipment it restricts DUO's use to skin surface ultrasound probes and other surfaces of the ultrasound console. Only FDA approval would permit DUO's use on intra-cavity probes which go inside the body and are considered higher risk procedures from an infection prevention standpoint.

 

There is a groundswell of professional opinion in the USA that a product like DUO, with the efficacy claims it has achieved, is more appropriate for skin surface probe disinfection, when the probe is used to guide the placement of venous catheters than more expensive equipment-based disinfection products that have FDA approval. A growing body of ultrasound practitioners is lobbying for the use of intermediate level disinfection in such circumstances rather than high-level disinfection. Our EPA approval confers intermediate-level disinfection status on DUO and the future FDA approval will confer high-level status on DUO.

 

We believe that we have a substantially expanded commercial opportunity in the United States ultrasound market with the regulatory strategy that we have pursued.

 

In Canada we are discussing the market launch of DUO for ophthalmology with various potential distributors.

 

Outlook

 

As the impact of the pandemic recedes and the number of endoscopies, ultrasound scans and other diagnostic procedures return to their pre-COVID-19 levels, we are confident that we will return to the growth trajectory we were on before 2020. The backlog for these procedures is front page news in all countries.

 

We have simplified the business and sharpened our focus on the hospital and our proprietary chlorine dioxide chemistry. We are better placed than before COVID-19 to capitalise upon a return to normal service in global healthcare. We look forward to growing our two core brands - Tristel and Cache - and expanding our global reach.

 

Bruno Holthof

 

Chairman

 

21 February 2022

 

 

 

Condensed Consolidated Income Statement for the six months ended 31 December 2021

 

 

6 months ended

6 months ended

Year ended

 

 

31-Dec-21

31-Dec-20

30-Jun-21

 

 

(unaudited)

(unaudited)

(audited)

Continuing operations

Note

£'000

£'000

£'000

Revenue

2

13,646

14,726

27,236

Cost of sales

 

(2,334)

(2,453)

(4,536)

Gross profit

 

11,312

12,273

22,700

Admin expenses - share based payments

 

(884)

(260)

(824)

Admin expenses - depreciation and amortisation

 

(1,300)

(1,156)

(2,321)

Admin expenses - other

 

(8,177)

(8,377)

(16,170)

Other operating income

 

162

-

-

Operating profit

 

1,113

2,480

3,385

Movement in fair value of investments

 

-

-

(807)

Finance income

 

-

-

1

Finance costs

 

(102)

(100)

(195)

Profit before taxation

 

1,011

2,380

2,384

Taxation

 

183

(501)

(789)

 

 

 

 

 

Profit for the period from continuing operations

 

1,194

1,879

1,595

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

Gross profit for the period from discontinued operations

 

783

1,057

2,043

Admin expenses - discontinued operations

 

(520)

(341)

(666)

Disposal of intangible assets - discontinued operations

 

(2,439)

-

-

(Loss)/profit for the period from discontinued operations

 

 

(2,176)

716

1,377

 

 

 

 

 

(Loss)/profit for the period attributable to the Group's equity shareholders

 

(982)

2,595

2,972

 

Earnings per share from continuing operations

 

 

 

 

attributable to equity holders of the parent

 

 

 

 

Basic (pence)

4

2.53

4.07

3.43

Diluted (pence)

 

2.50

3.96

3.39

 

Earnings per share from both continuing and discontinued operations attributable to equity holders of the parent

 

 

 

 

Basic (pence)

4

(2.08)

5.62

6.39

Diluted (pence)

 

(2.05)

5.47

6.32

 

Earnings from continuing operations before interest, tax depreciation and amortisation for the period ended 31 December 2021 were £2,413,000. (Period ended 31 December 2020 £3,636,000. Year ended 30 June 21 £4,899,000).

 

Condensed Consolidated Statement of Comprehensive Income for the six months ended 31 December 2021

 

 

6 months ended

6 months ended

Year ended

 

 

31-Dec-21

31-Dec-20

30-Jun-21

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'000

£'000

£'000

(Loss)/ profit for the period

 

(982)

2,595

2,972

Items that will be reclassified subsequently to Profit and loss

 

 

 

 

Exchange differences on translation of foreign operations

 

75

(30)

(600)

Other comprehensive income for the period

 

75

(30)

(600)

 

 

 

 

 

Total comprehensive income for the period

 

(907)

2,565

2,372

Attributable to:

 

 

 

 

Equity holders of the parent

 

(907)

2,565

2,372

 

 

(907)

2,565

2,372

 

Condensed Consolidated Statement of Financial Position as at 31 December 2021

 

 

6 months ended

6 months ended

Year ended

 

 

31-Dec-21

31-Dec-20

30-Jun-21

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'000

£'000

£'000

Non-current assets

 

 

 

 

Investment

 

-

807

-

Goodwill and other Intangible assets

 

9,190

12,770

11,969

Property, plant and equipment

 

8,263

8,603

8,542

Deferred tax asset

 

1,990

852

1,805

 

 

19,443

23,032

22,316

Current assets

 

 

 

 

Inventories

 

3,751

3,993

4,266

Trade and other receivables

 

4,842

5,888

5,255

Cash and cash equivalents

 

8,779

7,307

8,094

 

 

17,372

17,188

17,615

Total assets

 

36,815

40,220

39,931

Capital and reserves

 

 

 

 

Called up share capital

 

472

465

471

Share premium account

 

13,929

12,891

13,600

Merger reserve

 

2,205

2,205

2,205

Foreign exchange reserves

 

(128)

367

(203)

Retained earnings

 

11,255

13,150

14,003

Equity attributable to equity holders of parent

 

27,733

29,078

30,076

Minority interest

 

7

7

7

 

 

 

 

 

Total equity

 

27,740

29,085

30,083

Current liabilities

 

 

 

 

Trade and other liabilities

 

2,897

3,688

3,476

Contingent liability

 

-

76

-

Current tax liabilities

 

(474)

688

(170)

Current leased asset liabilities

 

629

870

629

Total current liabilities

 

3,052

5,322

3,935

Non-current liabilities

 

 

 

 

Deferred tax

 

874

612

637

Non-current leased asset liabilities

 

5,149

5,201

5,276

Total liabilities

 

9,075

11,135

9,848

Total equity and liabilities

 

36,815

40,220

39,931

 

Condensed Consolidated Statement of Changes in Equity for the six months ended 31 December 2021

 

Share Capital

Share Premium

Merger reserve

Foreign exchange reserve

Retained earnings

Total attributable to owners of the parent

Non-controlling interests

Total Equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

30 June 2020

453

12,634

2,205

397

12,767

28,456

7

28,463

Transactions with owners

 

 

 

 

 

 

 

 

Dividends paid

 

 

 

 

(1,785)

(1,785)

 

(1,785)

Shares issued

12

257

 

 

 

269

 

269

Share-based payments

 

 

 

 

260

260

 

260

Deferred tax through equity

 

 

 

 

(686)

(686)

 

(686)

Total transactions with owners

12

257

 

 

(2,211)

(1,942)

 

(1,942)

Profit for the period ended 31 December 2020

 

 

 

 

2,594

2,594

 

2,594

Other comprehensive income :-

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

 

 

(30)

 

(30)

 

(30)

Total comprehensive income

 

 

 

(30)

2,594

2,564

 

2,564

31 December 2020

465

12,891

2,205

367

13,150

29,078

7

29,085

Transactions with owners

 

 

 

 

 

 

 

 

Dividends paid

 

 

 

 

(1,232)

(1,232)

 

(1,232)

Shares issued

6

709

 

 

 

715

 

715

Share-based payments

 

 

 

 

564

564

 

564

Current tax through equity

 

 

 

 

593

593

 

593

Deferred tax through equity

 

 

 

 

550

550

 

550

Total transactions with owners

6

709

 

 

475

1,190

 

1,190

Profit for the period ended 30 June 2021

 

 

 

 

378

378

 

378

Other comprehensive income :-

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

 

 

(570)

 

(570)

 

(570)

Total comprehensive income

 

 

 

(570)

378

(192)

 

(192)

30 June 2021

471

13,600

2,205

(203)

14,003

30,076

7

30,083

Transactions with owners

 

 

 

 

 

 

 

 

Dividends paid

 

 

 

 

(1,854)

(1,854)

 

(1,854)

Shares issued

1

329

 

 

 

330

 

330

Share-based payments

 

 

 

 

884

884

 

884

Deferred tax through equity

 

 

 

 

(796)

(796)

 

(796)

Total transactions with owners

1

329

 

 

(1,766)

(1,436)

 

(1,436)

Condensed Consolidated Statement of Changes in Equity for the six months ended 31 December 2021 (continued)

 

 

 

 

 

 

Share Capital

Share Premium

Merger reserve

Foreign exchange reserve

Retained earnings

Total attributable to owners of the parent

Non-controlling interests

Total Equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Total transactions with owners brought forward

1

329

 

 

(1,766)

(1,436)

 

(1,436)

 

 

 

 

 

 

 

 

 

Profit for the period ended 31 December 2021

 

 

 

 

(982)

(982)

 

(982)

Other comprehensive income :-

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

 

 

75

 

75

 

75

Total comprehensive income

 

 

 

75

(982)

(907)

 

(907)

31 December 2021

472

13,929

2,205

(128)

11,255

27,733

7

27,740

 

Condensed Consolidated Statement of Cash Flows for the six months ended 31 December 2021

 

 

6 months ended

6 months ended

Year ended

 

 

31-Dec-2021

31-Dec-2020

30-Jun-2021

 

 

(unaudited)

(unaudited)

(audited)

Cash flows from operating activities

 

£'000

£'000

£'000

Operating profit before tax from continuing operations

 

1,011

2,380

2,384

Operating (loss)/profit from discontinued operations

 

(2,176)

716

1,377

Group operating (loss)/profit before tax for the period

 

(1,165)

3,096

3,761

Adjustments to cash flows from non-cash items

 

 

 

 

Depreciation of leased assets

 

369

346

772

Depreciation of plant, property & equipment

 

335

309

591

Amortisation of intangible asset

 

595

714

1,383

Impairment of intangible asset

 

33

33

67

Movement on fair value of investment

 

-

-

807

Share based payments - IFRS 2

 

884

260

824

(Profit)/loss on disposal of PPE and intangible assets

 

2,439

(3)

73

Lease interest

 

100

99

195

Unrealised loss in foreign exchange

 

-

55

-

Finance income

 

-

-

(1)

 

 

3,590

4,909

8,472

Working capital adjustments

 

 

 

 

Decrease/(increase) in inventories

 

515

626

353

Decrease/(increase) in trade and other receivables

 

413

534

1,167

(Decrease)/increase in trade and other payables

 

(579)

(872)

(1,196)

Lease interest paid

 

(100)

-

(195)

Corporation tax paid

 

(488)

(989)

(1,925)

Net cash flow from operating activities

 

3,351

4,208

6,676

Cash flows from investing activities

 

 

 

 

Interest received

 

-

-

1

Purchase of intangible assets

 

(428)

(341)

(608)

Purchase of subsidiary undertakings & deferred consideration

 

-

(36)

-

Purchase of property plant and equipment

 

(164)

(730)

(1,159)

Net cash used in investing activities

 

(592)

(1,107)

(1,766)

Cash flows from financing activities

 

 

 

 

Payment of lease liabilities

 

(400)

(435)

(797)

Share issues

 

330

269

984

Dividends paid

 

(1,854)

(1,785)

(3,017)

Net cash used in financing activities

 

(1,924)

(1,951)

(2,830)

Net increase/(decrease) in cash and cash equivalents

 

835

1,150

2,080

Cash and cash equivalents at the beginning of the period

 

8,094

6,212

6,212

Exchange differences on cash and cash equivalents

 

(148)

(55)

(198)

Cash and cash equivalents at the end of the period

 

8,781

7,307

8,094

 

 

 

 

           

 

Notes to the Financial Statements for the six months ended 31 December 2021

1

Accounting policies

Basis of Preparation

For the year ended 30 June 2021, the Group prepared consolidated financial statements under International Financial Reporting Standards ('IFRS') as adopted by the European Union (EU). These condensed consolidated interim financial statements (the 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) which are effective from 1 July 2021.

 

Forthcoming requirements:  This table lists the recent changes to the Standards that are required to be applied for annual periods beginning after 1 January 2021 and that are available for early adoption in annual periods beginning on 1 January 2021

Effective date

 

1 January 2023

IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts

1 January 2023

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

1 January 2023

Definition of Accounting Estimates (Amendments to IAS 8)

1 January 2023

Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

1 January 2023

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

 

There are no other standards that are not yet effective and that would be expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

 

None of the standards, interpretations and amendments effective for the first time from 1 July 2021 have had a material effect on the 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 consistent with the most recent annual financial statements being those for the year ended 30 June 2021.

 

The financial information for the six months ended 31 December 2021 and 31 December 2020 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 2021 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.

 

 

2

Segmental Analysis

 

Management considers the Company's revenue lines to be split into two operating segments, which span the different Group entities. The operating segments consider the nature of the product sold, the nature of production, the class of customer and the method of distribution. The Company's operating segments are identified initially from the information which is reported to the chief operating decision maker.

 

The first segment concerns the manufacture and sale of medical device decontamination products which are used primarily for infection control in hospitals. This segment generates approximately 90% of the Company's continuing revenues (2020: 88%).

 

The second segment which constitutes 10% (2020: 12%) of the business activity, relates to the manufacture and sale of hospital environmental surface disinfection products.

 

The operation is monitored and measured on the basis of the key performance indicators of each segment, these being revenue and gross profit, and strategic decisions are made on the basis of revenue and gross profit generating from each segment.

 

The Company's centrally incurred administrative expenses and operating income, and assets and liabilities, cannot be allocated to individual segments.

 

 

 

6 Months ended

31 December 2021

(unaudited)

 

6 Months ended

31 December 2020

(unaudited)

 

Hospital medical device decontamination

Hospital environmental surface disinfection

Discontinued operations

Total

 

Hospital medical device decontamination

Hospital environmental surface disinfection

Discontinued operations

Total

 

£000

£000

£000

£000

 

£000

£000

£000

£000

Revenue

12,238

1,408

1,479

15,125

 

12,844

1 ,882

2 ,025

16,751

Cost of material

(1,791)

(543)

(696)

(3,030)

 

( 1,774)

( 679)

( 968)

(3,421)

 

 

 

 

 

 

 

 

 

 

Gross profit

10,447

865

783

12,095

 

11, 070

1, 203

1,057

13,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation of non-financial assets

-

(1,300)

 

 

 

-

(1,402)

Other administrative expenses

 

 

(520)

(8,697)

 

 

 

(341)

(8,472)

Share-based payments

 

 

-

(884)

 

 

 

-

(260)

Other income

 

 

-

162

 

 

 

-

-

Segment operating profit

 

 

263

1,376

 

 

 

716

3,196

Segment operating profit can be reconciled to Group profit before tax as follows:

 

 

 

 

 

 

 

Segment operating profit

 

 

263

1,376

 

 

 

716

3,196

Finance income

 

 

-

-

 

 

 

-

-

Finance costs

 

 

-

(102)

 

 

 

-

(100)

Disposal of intangible asset

 

 

(2,439)

(2,439)

 

 

 

-

-

Group (loss)/profit

 

 

(2,176)

(1,165)

 

 

 

716

3,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended

30 June 2021

(audited)

 

 

Hospital medical device decontamination

Hospital environmental surface disinfection

Discontinued operations

Total

 

 

£000

£000

£000

£000

 

Revenue

2 3,827

3 ,409

3,762

30,998

 

Cost of material

(3, 274)

(1, 262)

(1, 719)

(6,255)

 

 

 

 

 

 

 

Gross profit

20, 553

2, 147

2 ,043

24,743

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation of non-financial assets

-

(2,813)

 

Other administrative expenses

 

 

(666)

(16,376)

 

Share-based payments

 

 

-

(824)

 

Other income

 

 

-

32

 

Segment operating profit

 

 

1,377

4,762

 

Segment operating profit can be reconciled to Group profit before tax as follows:

 

 

 

Segment operating profit

 

 

1,377

4,762

 

Finance income

 

 

-

1

 

Finance costs

 

 

-

(195)

 

Movement on fair value asset

 

-

(807)

 

Group profit

 

 

1,377

3,761

 

 

3

Income tax

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2020 - lower than the standard rate of corporation tax in the UK) of 19% (2020 - 19%).

 

The differences are reconciled below:

 

6 months ended

6 months ended

Year ended

 

31 December 2021

31 December 2020

30 June 2021

 

(unaudited)

(unaudited)

(audited)

 

£000

£000

£000

(Loss)/profit before tax

(1,165)

3,096

3,761

Corporation tax at standard rate

(221)

588

715

Adjustment in respect of prior years

227

-

(156)

Expenses not deductible for tax purposes

29

31

68

(Decrease) from effect of patent box

(48)

(109)

-

Increase/(decrease) from effect of foreign tax rates

68

187

307

Tax losses not utilised and other differences

68

(149)

64

Remeasurement of deferred tax due to changes in tax rate

(244)

-

(85)

Enhanced relief on qualifying scientific research expenditure

(62)

(47)

(124)

Total tax charge

(183)

501

789

         

 

 

The disposal of intangible assets will give rise to a tax deduction, creating tax losses for the UK group. As these losses can be carried forward to be utilised against profits in future years a deferred tax asset has been recognised in respect of the losses and results in an overall P&L tax credit.

 

 

 

4

Dividends

Amounts recognised as distributions to equity holders in the year:

 

6 months ended

6 months ended

Year ended

 

31 December 2021

31 December 2020

30 June 2021

 

(unaudited)

(unaudited)

(audited)

 

£000

£000

£000

Ordinary shares of 1p each

 

 

 

Final dividend for the year ended 30 June 2021 of 3.93p (2020: 3.84p) per share **

1,854

1,785

1,785

Interim dividend for the year ended 30 June 2021 of 2.62p (2020: 2.34p) per share

-

-

1,232

 

1,854

1,785

3,017

Proposed interim dividend for the year ended 30 June 2022 of 2.62p (2021: 2.62p) per share

1,236

1,211

1,851

 

 

** Based on shares in issue at 14 December 2021 of 47,185,043 (14 December 2020 of 46,493,808).

 

The proposed interim dividend has not been included as a liability in the financial statements.

 

5

Earnings per share

The calculations of earnings per share are based on the following profits and number of shares:

 

6 months ended

6 months ended

Year ended

 

31 December 2021

31 December 2020

30 June 2021

 

(unaudited)

(unaudited)

(audited)

 

£000

£000

£000

Retained (loss)/profit for the period attributable to equity holders of the parent

(982)

2,595

2,972

 

Shares

Shares

Shares

 

'000

'000

'000

 

Number

Number

Number

Weighted average number of ordinary shares for the purpose of basic earnings per share

47,147

46,203

46,539

Share options

708

1,246

494

 

47,855

47,449

47,033

Earnings per ordinary share

 

 

 

Basic (pence)

(2.08)p

5.62p

6.39p

Diluted (pence)

(2.05)p

5.47p

6.32p

 

£'000

£'000

£'000

Retained profit for the financial year attributable to equity holders of the parent

(982)

2,595

2,972

Adjustments:

 

 

 

Share based payments

884

260

824

Net adjustments

884

260

824

Adjusted earnings

(98)

2,855

3,796

Adjusted basic earnings per ordinary share (pence)

(0.21)p

6.18p

8.16p

 

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