Interim Results
Tristel PLC
03 March 2008
For immediate release
3 March 2008
TRISTEL plc
INTERIM RESULTS
Tristel plc ('Tristel' or the 'Group'), the infection and contamination control
business, today announces its unaudited interim results for the 26 week period
ended 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 growth
within our core hospital business of 17.1% is an excellent achievement given the
difficulties recently reported by other suppliers to the NHS. New product
introductions are fuelling this growth. Given the relatively short time that
these new products have been available, such as our high-level disinfectant for
general hospital surfaces which is effective against Clostridium difficile, we
have good reason to be confident about our prospects for the second half and
beyond.
Localised difficulties within our contamination control business for the food
industry have taken the shine off the overall Group result, but the level of
activity 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 721 500
Paul Swinney, Chief Executive
Paul Barnes, Finance Director
Daniel Stewart 020 7776 6550
Oliver Rigby
Parkgreen Communications 020 7479 7933 or 07980 541 893
Paul McManus paul.mcmanus@parkgreenmedia.com
Chairman's Statement
During the first half our healthcare subsidiary, Tristel Solutions, achieved a
very encouraging increase in turnover of 17.1% to £2.284m. New Tristel products
that have been introduced over the past twelve months have fuelled this growth.
The products are targeted at general hospital surfaces, hospital laboratories
and the Ear, Nose and Throat (ENT) and Ultrasound departments. With many of
these new products only coming fully on stream in the first half period, we can
look forward to developing real momentum with them in the second half.
Group turnover growth was restricted to 7.9% as a result of difficulties
encountered in our Tristel Technologies subsidiary, which we acquired in June
2006. Its largest food processing customer reduced purchases of our chlorine
dioxide wash products by £137,000 over the period, causing the subsidiary's
turnover to fall by 21% to £0.491m (2006: £0.621m). Sales levels have now
stabilised.
The benefits to the Group of establishing in-house manufacturing continued to
flow through with gross margins reaching 66%, 10 percentage points higher than
in the comparable period last year. Gross profit increased by 27.2% to £1.831m.
To facilitate further expansion we have secured additional premises of 5,500
sq. ft. adjacent to our existing facility and now have production, warehousing
and office space totalling 22,000 sq. ft.
The corollary of increasing the scale and size of the Group's business has been
an increase in overheads which, excluding depreciation and amortisation and the
share 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 interest
income of £1,000).
Dividend
In line with our progressive dividend policy we are declaring an interim
dividend of 0.385p per share, an increase of 10% over the interim dividend
declared last year. The dividend will be paid on 9 April 2008 to shareholders
on 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 bearing
fruit with a continuous stream of new product introductions broadening and
strengthening the business. Whilst the first half downturn in the Tristel
Technologies business is disappointing, sales have now stabilised and our
outlook for the medium term is optimistic. We are very encouraged by the
progress that our hospital based business, Tristel Solutions, is making. Our
burstable sachet product is starting to gain real momentum in hospitals where it
is gaining recognition as a more effective, safer and simpler product for
cleaning and disinfecting floors and walls than the bleach type products
currently used.
Our overseas business development activities continue to make progress, with
sales over the first seven months of the current financial year almost equalling
those achieved last year.
We have new products to launch in the coming months, notably our sophisticated
tray branded 'Stella' and our ENT scope washer branded 'Shine'. Stella has been
developed in New Zealand with a leading urologist and Shine in partnership with
a German manufacturer of decontamination equipment. Both projects have taken
significant investments in tooling and start-up inventory. We look to forward
to these new products fuelling continued growth in the coming months.
In summary, the first half result is very encouraging and we look forward to a
successful second half of the year.
Francisco A. Soler
Chairman
3 March 2008
CONDENSED CONSOLIDATED INCOME STATEMENT
RESULTS 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 £'000
Revenue 2,775 2,573 5,148
Cost of sales (944) (1,133) (1,943)
Gross profit 1,831 1,440 3,205
Other income 10 - 20
Administrative 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 1,130
Exceptional item - - (349)
Operating profit 461 403 781
Finance income - 3 7
Finance costs (35) (2) (1)
Net finance income (35) 1 6
Profit before taxation 426 404 787
Taxation (128) (121) (236)
Profit for the period 298 283 551
Attributable to: 298 283 551
Equity holders of the parent
Profit per share from continuing operations
Basic (pence) 4 1.22 1.19 2.30
Diluted (pence) 1.20 1.17 2.26
All amounts relate to continuing operations. There are no recognised gains or
losses other than the losses shown above.
CONDENSED STATEMENT OF RECOGNISED INCOME AND EXPENSE
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)
£'000 £'000 £'000
Profit for the period 298 283 551
Total recognised income and expense for the period 298 283 551
Attributable to: 298 283 551
Equity holders of the parent
All amounts relate to continuing operations. There are no recognised gains and
losses other than the profits shown above.
CONDENSED CONSOLIDATED BALANCE SHEET
AS 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 £'000
Non-current assets
Goodwill 774 774 774
Intangible assets 1,565 554 1,495
Property, plant and equipment 789 625 734
3,128 1,953 3,003
Current assets
Inventories 528 449 488
Trade and other receivables 1,234 1,046 1,147
Cash and cash equivalents 248 87 38
2,010 1,582 1,673
Total assets 5,138 3,535 4,676
Capital and reserves attributable to the company's equity 5
holders
Called up share capital 244 238 244
Share premium account 1,750 1,456 1,750
Merger reserve 478 478 478
Retained earnings 227 (57) 158
Equity attributable to equity holders of parent 2,699 2,115 2,630
Current liabilities
Trade and other payables 1,543 992 1,369
Bank overdraft 269 - 165
Interest bearing loans and borrowings 122 - 100
Current tax liabilities 323 302 230
Total current liabilities 2,257 1,294 1,864
Non-current liabilities
Deferred tax liabilities 182 126 182
Total non-current liabilities 182 126 182
Total liabilities 2,439 1,420 2,046
Total equity and liabilities 5,138 3,535 4,676
The financial statements were approved by the Board of Directors on 3 March
2008, and were signed on its behalf by:
Paul Barnes FCCA
Finance Director
3 March 2008
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR 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 £'000
Cash flows from operating activities
Cash generated from operating activities 6 670 485 1,243
Interest paid (35) (2) (1)
Corporation tax paid (35) - (129)
Net cash from operating activities 600 483 1,113
Cash flows from Investing activities
Interest received - 3 7
Purchases 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 activities
Equity 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 ACCOUNTS
FOR 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 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.
The interim financial report has been prepared using accounting policies
consistent 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 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 2007.
Segments
For management purposes, the Group 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.
2. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information for the six months ended 31 December 2007 and 31
December 2006 has not been audited and does not constitute full financial
statements within the meaning of Section 240 of the Companies Act 1985.
The financial information relating to year ended 30 June 2007 does not
constitute full financial statements within the meaning of Section 240 of the
Companies Act 1985. 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
report 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 £'000
Reported operating profits before taxation 426 404 787
Add back:
share based payments (IFRS2) 15 - 30
amortisation of other intangibles 57 43 87
Adjusted operating profit 498 447 904
4. EARNINGS PER SHARE
The calculation of earnings per share is based on the following profits and
number 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 '000
Adjusted earnings per share* 498 24,443 2.04 447 23,837 1.69 904 23,973 3.70
Reconciliation to reported
earnings (net of tax at
30%):
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 2.30
Diluted 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 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.
5. RECONCILIATION OF MOVEMENT IN TOTAL EQUITY
Called up Share
share premium Merger Retained
capital account reserve earnings
£'000 £'000 £'000 £'000 £'000
At 1 July 2006 238 1,456 478 (167) 2,005
Profit recognised for the year 551 551
Employee share based payments (IFRS2) 30 30
Equity dividends paid (256) (256)
Share issue 6 294 - - 300
At 1 July 2007 244 1,750 478 158 2,630
Profit recognised for the period - - - 298 298
Employee share based payments (IFRS2) - - - 15 15
Equity 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 1p
per 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 £'000
Profit before taxation 426 404 787
Adjustments for:
Depreciation and impairment 95 51 119
Amortisation - other intangibles 57 43 87
Share based payments expense (IFRS2) 15 - 30
Loss on disposal of property plant and equipment 5 3
Government grants (10) - (20)
Finance costs 35 2 1
Finance income - (3) (7)
Operating cash flows before movement in working capital 623 497 1,000
Increase in inventories (40) (54) (93)
Increase in trade and other receivables (87) (114) (216)
Increase in trade and other payables 174 156 552
Cash 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 and
Bruce Green, a shareholder in the Company, royalties of £106,128 (31 December
2006 £82,292) were paid during the period to Bruce Green Limited, a private
company 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 Medichem
Limited, a private company incorporated in England and Wales, in which Mr Tom
Allsworth, a shareholder in the Company, is a director and shareholder, monies
totalling £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 from
World Financial Trading Corporation, which was repaid on 20 September 2007. A
director and shareholder of Tristel plc, Mr Francisco Soler is a director of
World Financial Trading Corporation, a member of the Financial Industry
Regulatory 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 31
December 2006) by its subsidiary company Tristel Solutions Limited in respect of
intra-group transactions.
Also at 31 December 2007, Tristel plc owed £362,608 (£365,441 31
December 2006) to its subsidiary company Tristel Technologies Limited in respect
of intra-group transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not disclosed in
this note. Transactions between the Company and its subsidiaries will be
disclosed in each undertakings statutory financial statements.
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