Infection and contamination control business Tristel (LON:TSTL) broke a five year run of profit growth last year but chief executive Paul Swinney makes no excuse for the company’s willingness to take a short term hit for longer term opportunities. Since floating on AIM in 2005, Tristel has profited mainly from selling disinfectants, sprays and wipes to hospitals with a chemical formula that was developed to be safer than those of its competitors. However, predicting a gradual decline in a hugely competitive UK market, the company spent last year investing in a new division that Swinney believes will offer much stronger long-term prospects.

Tristel grew sales by 6 percent to £9.29 million in the year to June 30, 2011, but that figure was blunted by the slower than expected arrival of a number of licences and regulatory approvals, which it had expected to drive revenues higher. One notable highpoint was a growth in revenues from exports, which expanded by 34% to over £1 million, driven in large part by the key German and Chinese markets. Elsewhere in the financials, Tristel was debt free at the end of the year, with cash balances of £0.4 million helped by a share placing last November that raised £3.9 million. Having paid dividends every year since floating, the company cut the 2010 payout from 1.825p to 0.555p.

While suppressed revenues contributed to a decline in pre-tax profits from £1.7 million to £0.5 million, the figures were also impacted by investments the company made in a new sales team, poached from a competitor, and the construction of a sophisticated new production facility. Those investments were connected with a move by Tristel to begin producing and selling cleaning products under a new brand called Crystel for companies that make pharmaceuticals and personal care products. The move means that there are now three core competences at Tristel, including the legacy UK hospital market, a growing exposure to hospital markets abroad and the launch of the new pharma and personal care arm. With revenues from that new division just beginning to flow as the financial year closed, Swinney and his team are confident that Tristel is ready to bounce back from the upheaval of last year.

Paul, last year saw some major developments at Tristel and an expansion…

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