REG - Tristel PLC - Audited Preliminary Results
25/10/2022 07:00
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RNS Number : 9469D Tristel PLC 25 October 2022
The information communicated in this announcement contains inside
information for the purposes of Article 7 of the Market Abuse Regulation (EU)
No. 596/2014.
Tristel plc
("Tristel", the "Company" or the "Group")
Audited Preliminary Results
for the year ended 30 June 2022
Tristel plc (AIM: TSTL), the manufacturer of infection prevention products for
hospitals, announces its audited preliminary results for the year ended 30
June 2022.
The Company has entered the new financial year with the impact of Brexit on
NHS stocking levels behind us, the effects of the pandemic on patient
procedures receding, a more sharply focused business, and a clear line of
sight to the resumption of consistent revenue and profits growth.
The Company's core business is the sale to hospitals of its proprietary
chlorine dioxide chemistry used for the decontamination of medical devices
under the Tristel (https://tristel.com/) brand, and for the sporicidal
disinfection of environmental surfaces under the Cache
(https://thecachecollection.com/) brand.
Financial Highlights
· Turnover steady at £31.1m (2021: £31.0m) with 3% growth in
continuing products to £29.6m (2021: £28.6m)
· Overseas sales continue to grow, up 2% to £20.1m (2021:
£19.6m), representing 65% of total sales (2021: 63%)
· Gross margin remained steady at 79% (2021: 80%)
· Adjusted EBITDA* margin of 24% (2021: 27%)
· Adjusted pre-tax profit* of £4.5m (2021: £5.4m)
· Reported pre-tax profit of £1.5m (2021: £3.8m)
· Adjusted EPS* of 8.40p (2021: 11.36p restated**), Reported EPS of
1.96p (2021: 7.86p restated**)
· Dividend per share for the full year up 46% to 9.55p (2021:
6.55p), including special dividend of 3p paid in August 2022
· Net cash of £8.9m (2021: £8.1m), with continued strong
operating cashflow of £5.6m (2021: £6.7m)
* before share-based payments and impairment of intangibles
**See note 8 for restatement
Operational Highlights
· Discontinuation of non-core, low growth products completed during the year
· De Novo FDA submission for Tristel Duo ULT progressing - additional information requested (as is commonplace) with expected timescale for decision and likelihood of success unchanged
· State-by-state registration of EPA approved DUO substantially complete, and product launched into United States market in September 2022 at three clinical conferences
· Signed distribution agreement with Medical Ophthalmics Inc., Toronto for Duo OPH (approved by Canada Health for high-level disinfection of ophthalmic devices)
Paul Swinney, Chief Executive of Tristel plc, said: "The disruptions of the
past three years are largely behind us, and we are in a strong position to
resume consistent revenue and profits growth. Our continued cash generation
and strong balance sheet will support this return to growth, and we have set
out clear objectives for the business over the next three years.
"We look forward to meeting these objectives and continuing the progress of
the Group. We look to the future with confidence as Tristel continues to grow
and expand its geographical reach."
Overview of results by Liz Dixon, CFO
A live hybrid presentation of the financial results and outlook will be
delivered by Paul Swinney, CEO, and Liz Dixon, CFO today at 4:30pm at No.1
Cornhill, London, EC3V 3ND. Those not attending in-person can participate via
the Investor Meet Company platform and there will be an opportunity for
investors to submit questions. Investors can sign up to Investor Meet Company
for free and register for the presentation via:
https://www.investormeetcompany.com/tristel-plc/register-investor
(https://www.investormeetcompany.com/tristel-plc/register-investor)
For further information please contact:
Tristel plc www.tristelgroup.com (http://www.tristelgroup.com)
Paul Swinney, Chief Executive Officer via Walbrook PR
Liz Dixon, Chief Financial Officer
Walbrook PR Ltd Tel: +44 (0)20 7933 8780 or tristel@walbrookpr.com
(mailto:tristel@walbrookpr.com)
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44 (0)7584 391 303
finnCap Tel: +44 (0)20 7220 0500
Geoff Nash/ Charlie Beeson (Corporate Finance)
Alice Lane/ Sunila de Silva (ECM)
Chairman's Statement
Strategy and growth
The past three years have been impacted by Brexit and COVID-19 and the year
ended 30 June 2022 was further affected by our response to these external
forces, which was to rationalise our product range to focus solely on the
hospital market. With Brexit behind us, the effects of COVID-19 receding, and
the rationalisation decisively concluded during the year, we have entered the
current financial year with a clear line of sight to resumption of consistent
revenue and profits growth which we have achieved in the past.
I will speak to each of these events and how we now assess them:
Brexit impacted us by disrupting the normal steady buying patterns of
hospitals in the United Kingdom, which is our largest geographical market,
representing 35% of global sales in 2022. The UK healthcare system is
dominated by the National Health Service which itself concentrates most of its
procurement through one agency, the NHS Supply Chain.
On several occasions between 2019 and 2021 the NHS Supply Chain, at the
Government's direction, stockpiled hospital consumables to safeguard against
potential disruption to supply. The last occasion was in the first half of
FY21 when approximately £0.9m of our products were purchased and held in
strategic storage locations. This inventory was released to hospitals during
the first half of FY22 which meant that our UK sales in FY22 were reduced by
the same value. All these reserve inventories were released into the NHS
system and used by UK hospitals by 30 June 2022, and we have entered the
current financial year with a stable, predictable order pattern from our
largest UK customer.
COVID-19 impacted global healthcare in a series of waves each of which
reduced, to differing degrees in different countries, the provision of
diagnostic examinations to patients. These examinations include ultrasound
scans and endoscopies, the procedures where our products are primarily used.
The reasons for the reduction in service levels were numerous: diversion of
staff and beds to COVID patients; reduced access to hospitals; lower
productivity because of the use of PPE and increased cleaning standards; the
introduction of strict waiting room management protocols, and staff shortages
in large part attributable to COVID sick absence. Staff shortages in hospitals
worldwide is a continuing legacy of the pandemic.
During the second half of the year, a marked increase in service levels became
apparent in all 14 countries in which we operate directly. Our Group's revenue
performance in the second half showed a marked improvement over the first
half, and also the second half of the previous year (H1 2022 £15.1m H2 2022
£16m vs H1 2021 £16.7m H2 2021 £14.3m.) We are confident that there is
still a significant improvement in demand ahead of us as the global recovery
in the provision of diagnostic services is far from complete.
The combination of Brexit and COVID-19 and their impact upon the business
caused us to take a hard look at our product range during the final months of
FY21. We had two portfolio brands - Crystel and Anistel - which were used in
two different markets: clean room and personal care product manufacture
(Crystel) and veterinary (Anistel). Both product ranges were UK focused, were
largely based upon chemistries other than our proprietary chlorine dioxide,
and sales were in decline. We concluded that the beginning of the year was the
right time to focus on the hospital market with our product portfolio brands -
Tristel and Cache - and ensure we had the rationalisation project completed
during FY22.
The rationalisation was committed to at the end of FY21, largely completed by
31 December 2021, and wrapped up in the second half of FY22. The discontinued
products generated revenue in FY22 of £1.5m and after all associated
overheads, write-off of redundant inventory and internal reorganisation costs,
they made a neutral profit contribution to the year. An impairment charge of
£2.4m was recorded as all license rights, IP, and intangibles associated with
the products were written down in their entirety.
Group Revenue
Breakdown
£m 2020-2021 2021-2022 Percentage change
Continuing products 28.6 29.6 +3%
Discontinued products 2.4 1.5 -38%
Group Revenue from all products 31.0 31.1 +0%
In conclusion, we have entered the current financial year with the impact of
Brexit behind us, with the impact of the pandemic receding, and a more sharply
focused business.
Regulatory, business systems and investing in growth
As we noted last year, the regulatory environment in which we are operating is
becoming ever more complicated and demanding.
In Europe, CE marking is required for medical device disinfectants. Post
Brexit, the UK introduced UKCA Marking Certification, which came into effect
on 1 January 2021, although CE marking will continue to be recognised in the
UK until the end of 2022. From the beginning of 2023 only products with UKCA
marking will be accepted in Great Britain.
In Europe, surface disinfectants must be approved under the Biocidal Products
Regulation (BPR). Post-Brexit, the UK has mirrored the European BPR process
with the GBBPR and will at some stage in the future create its own version of
it.
The consequence of these developments is that we have to comply with parallel
and sometimes competing regulatory frameworks where previously there was only
one. Compliance can only be achieved by increasing overhead to attract the
best Quality Assurance and Regulatory Affairs people in a highly competitive
market for such skills. This is one cause of the upwards pressure on our
business costs.
We continue to invest in the most appropriate systems for a business of our
size and complexity. The organisation is deeply committed to a digital
transformation programme across all facets of our operation. Equally, we
invest heavily in our IT and cyber security infrastructure increasing spend to
£0.8m in 2022 from £0.5m in the previous year.
Overseas expansion
We continue to expand our global footprint through a combination of
establishing our own subsidiaries and the appointment of national
distributors. In April 2022 we took over the customer base built up by a
distributor who had worked with us in Singapore for many years, and
established a subsidiary with our own sales force.
In North America we made our De Novo submission to the FDA for Duo ULT in June
2022. We expect to receive a decision from the agency during the current
financial year. With respect to the EPA approval that we received in June
2021, we re-started the state-by-state registration process during FY22 and
will launch the product together with our USA partner Parker Laboratories at a
series of ultrasound conferences during this Autumn. In Canada, we are
launching Duo OPH for ophthalmic devices also in the Autumn of 2022.
Our people
I would like to thank our employees for their commitment throughout the year.
There were plenty of difficulties to overcome from many directions, on top of
which we tackled the largest product re-organisation we have ever undertaken.
I spoke in last year's Annual Report about our team being match fit for the
better times ahead. Whilst these better times were slow to arrive, the team
stuck patiently to the task, and delivered a great performance during the
year.
Results
Our gross profit margin remained steady at 79% (2021: 80%). Overheads
(excluding share-based payments, depreciation, amortisation and impairment)
rose by 6% from £16.4m to £17.4m, principally due to the increase in
headcount from 189 to 199. The associated increase in wages and salaries of
£0.7m (excluding share-based payments) was partially offset by a reduction in
travel and the number of medical conferences at which we exhibited.
Adjusted pre-tax profit (before share-based payments of £0.6m and the
impairment charge of £2.4m) fell 17% from £5.4m to £4.5m. Unadjusted
pre-tax profit (after share-based payment and the impairment charge) fell 60%
from £3.8m to £1.5m. The adjusted pre-tax profit margin was 15% (2021: 17%)
and the unadjusted margin was 5% (2021:12%).
Earnings per share (EPS) (adjusted for the add-back of the share-based payment
charge and impairment of intangible assets) was 8.40 pence. (2021 restated:
11.36 pence). Basic EPS was 1.96 pence (2021 restated: 7.86 pence).
Balance sheet, cash and dividend
The Group has continued to be highly cash generative during the year and the
balance sheet is debt-free (with the exception of lease liabilities). The cash
balance on 30 June 2022 was £8.9m (2021: £8.1m).
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 of 2021
and 2022, we have decided to deviate from this policy and pay a dividend
linked to the market's expectation for the year's dividend. The Board is
recommending that the final dividend is 3.93 pence (2021: 3.93 pence),
reducing the dividend cover to 0.88 times from the standard 2 times. This
final dividend will be paid to shareholders on the register on 18 November and
the associated ex-dividend date is 17 November 2022.
Outlook
We are confident that we are going to resume the steady upward growth
trajectory that characterised our financial performance over the fifteen-year
period that followed our IPO in 2005 and ended with the pandemic. We can
deliver this from our existing global footprint and our focus on the hospital
market.
With the USA EPA approval and the Health Canada approval for Duo OPH - both of
which we have - and hopefully an FDA approval for Duo ULT during FY23, we will
be doing business in North America for the first time in our history. This
will represent a step change in the growth possibilities for the Company.
Dr Bruno Holthof
Non Executive Chair
Chief Executive's Report
Overview
The year ended 30 June 2022 was encouraging for the Group. The highlights
were:
· The stockpiling by the NHS Supply Chain in the first half of FY21
unwound during the first half of FY22, and the second half of FY22 revealed
the true level of demand from UK hospitals for our core products. Second half
UK revenue of our core products was £5.7m compared to £3.9m in the first
half. NHS stocking and de-stocking due to Brexit was purely a UK phenomenon,
but with the UK accounting for 35% of Group sales, it had a material negative
impact on the Group in the year.
· The effects of COVID were clearly receding by year-end and have
continued to abate in the current financial year.
· The product range rationalisation was successfully executed
during the year.
Financial targets
In October 2019 we set a financial plan for the three years to 30 June 2022.
The three key financial targets of the plan were:
i) sales growth in the range of 10% to 15% per annum
as an annual average over the three years;
ii) the achievement in each year of an EBITDA margin
(excluding share-based payment charge) of at least 25%, and
iii) to increase profit before tax (excluding
share-based payments) year-on-year, independently of the other two targets.
These financial targets were set before the COVID-19 pandemic and the
disruption to NHS purchasing patterns caused by Brexit. Although the past
three years have been challenging, the business is now in a much stronger
position and the Company is proud of its achievements over the period. For
transparency, our performance against the targets set in 2019 has been:
Financial year Revenue £m Annual revenue growth Average revenue growth Adjusted EBITDA margin % Increase in profit before tax (excluding SBP charge)
Ended 30.06.19 (base year) 26.2 - - - -
Ended 30.6.20 31.7 21.0% 21.0% 30.9% Yes
Ended 30.6.21 - restated** 31.0 -2.2% 9.4% 27.1% No
Ended 30.6.22 31.1 0.3% 6.4% 24.0% No
** See note 8 for restatement
We have re-set targets for the coming three years to FY25. They are:
i) sales growth in the range of 10% to 15% per annum
as an annual average over the three years;
ii) the achievement in each year of an EBITDA margin
(excluding share-based payment charge) of at least 25%.
Our marketplace and technology
Our entire business is focussed on preventing the transmission of microbes
from one object or person to another. We pursue this purpose because microbes
are the cause of infection in humans. They can cause illness or death and
place a heavy cost on individuals and society. We achieve our purpose by
developing products based upon a very powerful disinfectant: chlorine dioxide,
of which we have a proprietary formulation.
Our mission is most relevant to hospitals where the risk of transmission of
infection between individuals is highest. Infection prevention is a basic
requirement for the safe and effective provision of healthcare, true for all
hospitals in all countries. Over 98% of our revenues are of consumable
products performing a vital function that is non-discretionary.
Our strategy focusses upon our proprietary chlorine dioxide chemistry and two
principal applications for it: first, the high-level disinfection of medical
devices under the Tristel brand (accounting for 85% of continuing product
revenues in the year); and second, the disinfection of surfaces in hospitals
under the Cache brand (accounting for 10% of continuing product revenues in
the year). Within this second activity, we make a distinction between
sporicidal efficacy that is achieved with the use of our chlorine dioxide
chemistry, and the low-level performance claims that are made by most other
disinfectant chemistries. Our objective is to create a clearly identifiable
segment within surface disinfection for sporicidal products and to be the
global market leader in this segment.
With respect to Tristel, our proposition is unique in two respects: first, we
are the only provider of chlorine dioxide-based high-level disinfectants
validated and regulated for use with semi-critical medical devices; and
second, we are unique in applying the active ingredient in a manual process.
Other high-level disinfection processes using the active ingredients peracetic
acid and hydrogen peroxide - alternatives to chlorine dioxide - require
automated equipment to contain and control the chemistry.
Manual application means Tristel products are ideally suited for hospital
departments that carry out diagnostic procedures with small heat-sensitive
medical instruments. These include: nasendoscopes used in Ear, Nose and Throat
departments; laryngoscope blades used in emergency medicine; cardio echo
probes used in the diagnosis of heart disease; tonometers used in
ophthalmology, and ultrasound probes used in both women and men's health. In
these areas of the hospital, we are the simplest, quickest, and most
affordable high-performance disinfection method available. Consequently, in
geographical markets in which we have been present for some time, we hold
truly significant market share.
The cleaning and disinfection of environmental surfaces in hospitals is
ubiquitous and the global expenditure by hospitals on surface disinfection is
far greater than the expenditure on decontaminating medical devices. The
capability of a disinfectant to kill bacterial spores is the defining hallmark
of the best-performing biocides, and chlorine dioxide is one of the elite
chemistries that can kill spores.
We expect a legacy of COVID-19 will be that hospitals will be more rigorous in
their selection of the best performing and most scientifically validated
disinfectant products, which will benefit Cache.
Revenue by segment
We segment our business to reflect our corporate strategy. We have developed
distinctly different brands for the two segments: Tristel for medical device
disinfection and Cache for sporicidal surface disinfection. Our strategic
intention is to develop the Tristel and Cache brands and product portfolios
with a significant degree of independence from each other, but both anchored
upon our chlorine dioxide technology platform and using the same sales teams
in all countries.
The other segment, which we regard as non-core, represents a much-reduced
number of products that were not discontinued in our rationalisation
programme, and whose remaining product life span is relatively short. During
the year, the revenue split across these segments was:
£m Brand Revenue % of total Revenue % of total
2020-21 2021-22
Medical device decontamination in hospitals Tristel 24.0 77% 25.4 82%
Environmental surface disinfection in hospitals Cache 4.0 13% 3.2 10%
Other - non-core Various 0.6 2% 1.0 3%
Continuing products 28.6 92% 29.6 95%
Discontinued products Various 2.4 8% 1.5 5%
Group 31.0 100% 31.1 100%
Revenue by channel
We sell our products directly to end-users in those markets in which we have
established a subsidiary, and through distributors in markets where we have no
corporate presence. During the year, the revenue split by sales channel was:
2020-21 Revenue 2021-22 Revenue Year-on-Year change Percentage change
Hospital medical device decontamination: Tristel
EMEA direct 17.2 18.1 0.9 +5%
APAC direct 5.0 5.3 0.3 +6%
Worldwide distributors 1.8 2.0 0.2 +11%
Tristel global 24.0 25.4 1.4 +6%
Hospital environmental surface disinfection: Cache
EMEA direct 2.3 2.5 0.2 9%
APAC direct 0.7 0.5 -0.2 -29%
Worldwide distributors 1.0 0.2 -0.8 -80%
Cache global 4.0 3.2 -0.8 -20%
Other revenue: various brands 0.6 1.0 0.4 67%
Continuing products 28.6 29.6 1.0 3%
Discontinued products 2.4 1.5 -0.9 -38%
Group 31.0 31.1 0.1 0%
Revenue by geography
The proportion of our revenue generated in overseas markets continued to
increase and reached 65%. The history over the previous five years is shown in
the table below.
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Revenue split %
UK 53% 49% 45% 40% 37% 35%
Overseas 47% 51% 55% 60% 63% 65%
Annual revenue growth %
UK 3% 2% 9% 7% -10% -3%
Overseas 43% 19% 26% 32% 3% 2%
We have fourteen subsidiaries selling directly into the hospital marketplace
in the United Kingdom, Belgium, the Netherlands, France, Italy, Germany,
Switzerland, Poland, Hong Kong, China, Malaysia, Singapore, Australia, and New
Zealand. We have subsidiaries in the United States, Japan, India, and Ireland
which are not yet active in terms of selling. We closed our Russian subsidiary
early in the current financial year.
During the year, in another nineteen countries, we sold products through
national distributors.
Our Strategic Assets
We consider the assets that enable the Group to achieve its strategic goals to
be:
Our chlorine dioxide chemistry
There are three critically important elements that account for the unique
positioning of our chlorine dioxide chemistry:
1. The proprietary formulation,
2. Our focus over two decades on exploring the potential for chlorine
dioxide in the decontamination of medical instruments. There is another
application for chlorine dioxide chemistry which all other businesses have
concentrated upon which is water treatment. From the inception of our business
in the 1990's we looked in a different direction - towards medical device
disinfection - a direction which others have not followed, and this has given
us the pioneer's advantage,
3. The length of time that we have enjoyed this pioneer position has
allowed us to collate a significant body of knowledge, including published
scientific data, the testimony of almost two decades of safe use, a
significant global footprint of regulatory approvals and a library of proven
compatibility with hundreds of medical instruments, all of which would take a
new entrant significant time and cost to match.
Our regulatory programme succeeded in attaining 21 approvals for 16 products
in 5 countries during the year.
Intellectual property protection
On 30 June 2022, we held 137 patents granted in 33 countries providing legal
protection for our products.
In its broadest sense, our intellectual property relates to:
1. Patents, trademarks and registered designs,
2. The scientific validation of our chemistry and our products that
have entered the public domain, via a number of peer-reviewed and published
papers,
3. The certification by medical device manufacturers that our
chemistry is compatible with their products. We enjoy official compatibility
with the instrumentation of 56 medical device manufacturer, with respect to
1,449 of their individual models.
Our people possess an unrivalled body of knowledge relating both to infection
prevention and to chlorine dioxide, and they are a key asset for the future of
our business. Their domain knowledge relates to the manufacture of chlorine
dioxide-based products and their development. The Company's R&D investment
focusses exclusively on our proprietary technology, searching for improvements
in microbial efficacy, reductions in hazards, and greater efficiency in
manufacture. In parallel, we invest in the creation of packaging and delivery
forms that enhance and simplify the delivery of the chemistry and the user
experience.
Progress in North America
Health Canada
In FY 21 Tristel Duo OPH was approved by Health Canada as a class 2 medical
device and included in Health Canada's Medical Device Listing. Duo OPH is a
high-level disinfectant intended for use on ophthalmic instruments including
ultrasound devices and re-usable tonometers and lenses that contact the
cornea. Early in the current financial year we entered into a distribution
agreement with Medical Ophthalmics Inc., Toronto for Duo OPH.
United States Environmental Protection Agency (EPA)
We received our first approval from the EPA for our foam-based disinfectant
for surfaces in April 2018. We successfully enhanced the performance claims of
the product with a second approval in January 2019 and then registered the
product in three States before curtailing the nationwide registration
programme until a third submission could be made to bolster further the
competitive positioning of the product. This submission was made in October
2020, and we received the third approval in FY21, which expands the product's
efficacy claims to include mycobacteria, with all efficacy claims are within a
contact time of two minutes. We recommenced the State-by-State registration
programme during FY22, and we expect all registrations to be granted by 31
March 2023.
In September 2022 we announced that DUO has been launched in the United States
through the Company's distribution partner Parker Laboratories Inc. at three
conferences and trade shows.
United States Food and Drug Administration (FDA)
After more than five years of data generation, we lodged our De Novo
submission for the high-level disinfectant Duo ULT with the FDA in June 2022.
Our best intelligence is that De Novo submissions are typically decided upon
by the Agency within twelve months.
Outlook
We have set objectives which are visible to everyone inside the Group, and we
make them equally visible to all other stakeholders. The new financial year
has started strongly with first quarter sales up 20% on the prior year - a
sales run rate of £34m. We look to the future with confidence as Tristel
continues to grow and expand its geographical reach.
Paul Swinney
Chief Executive Officer
Tristel Plc
Consolidated Income Statement for the Year Ended 30 June 2022
Restated*
Note 2022 2021
£ 000
£ 000
Revenue 3 31,123 30,998
Cost of sales (6,464) (6,255)
Gross profit 24,659 24,743
Share based payments (596) (824)
Depreciation, amortisation and impairments (2,777) (2,813)
Administrative expenses, excluding share based payments, depreciation, (17,325) (16,376)
amortisation and impairment
Other operating income 167 32
Impairment of intangibles (2,439) -
Operating profit 1,689 4,762
Movement in fair value of investments - (807)
Finance income 1 1
Finance costs (195) (195)
Net finance cost (194) (194)
Profit before tax 1,495 3,761
Income tax expense 4 (568) (105)
Profit for the year 927 3,656
Profit attributable to :
Owners of the company 927 3,656
Earnings per share from total and continuing operations attributable to equity
holders of the parent
Restated*
2022 2021
Basic - pence 6 1.96 7.86
Diluted - pence 6 1.94 7.77
The above results were derived from continuing operations.
*In the current year, the consolidated income statement has been restated, see
note 8.
Tristel Plc
Consolidated Statement of Comprehensive Income for the Year Ended 30 June 2022
Restated*
2022 2021
£ 000
£ 000
Profit for the year 927 3,656
Items that may be reclassified subsequently to profit or loss
Foreign currency translation gains/(losses) 138 (600)
Total comprehensive income for the year 1,065 3,056
Total comprehensive income attributable to:
Owners of the company 1,065 3,056
*In the current year, total comprehensive income has been restated, see note
8.
Tristel Plc
Consolidated Statement of Financial Position as at 30 June 2022
Restated*
Note 30 June 30 June
2022
2021
£ 000
£ 000
Assets
Non-current assets
Property, plant and equipment 2,791 3,119
Right of use assets 5,209 5,423
Goodwill 5,242 5,265
Intangible assets 4,138 6,704
Deferred tax assets 1,493 2,489
18,873 23,000
Current assets
Inventories 4,420 4,266
Trade and other receivables 5,851 5,255
Income tax receivable 713 170
Cash and cash equivalents 8,883 8,094
19,867 17,785
Total assets 38,740 40,785
Equity and liabilities
Equity
Share capital 7 473 471
Share premium 13,996 13,600
Foreign currency translation reserve (65) (203)
Merger reserve 2,205 2,205
Retained earnings 12,371 14,687
Equity attributable to owners of the company 28,980 30,760
Non-controlling interests 7 7
Total equity 28,987 30,767
Non-current liabilities
Lease liabilities 4,997 5,276
Deferred tax liabilities 720 637
5,717 5,913
Current liabilities
Trade and other payables 3,222 3,476
Lease liabilities 814 629
4,036 4,105
Total liabilities 9,753 10,018
Total equity and liabilities 38,740 40,785
* In the current year, right of use assets have been disclosed separately from
property, plant and equipment in accordance with IFRS 16.47. The prior year
right of use assets of £5,423,000 have been restated to reflect the same
split.
Deferred tax assets, income tax receivable, income tax liability and retained
earnings have also been restated. See note 8.
Tristel Plc
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2022
Share capital Share premium Foreign currency translation Merger reserve Retained earnings Total Non- controlling interests Total equity
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
At 1 July 2021 - restated * 471 13,600 (203) 2,205 14,687 30,760 7 30,767
Profit for the year - - - - 927 927 - 927
Exchange difference on translation of foreign operations - - 138 - - 138 138
Total comprehensive income - - 138 - 927 1,065 - 1,065
Dividends - - - - (3,091) (3,091) - (3,091)
New share capital subscribed 2 396 - - - 398 - 398
Deferred tax through equity - - - - (795) (795) - (795)
Current tax through equity 47 47 - 47
Share based payment transactions - - - - 596 596 - 596
At 30 June 2022 473 13,996 (65) 2,205 12,371 28,980 7 28,987
* See note 8 for restatement
Tristel Plc
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2022
(continued)
Restated* Restated* Restated*
Share capital Share premium Foreign currency translation Merger reserve Retained earnings Total Non- controlling interests Total equity
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
At 1 July 2020 453 12,634 397 2,205 12,767 28,456 7 28,463
Profit for the year - restated* - - - - 3,656 3,656 - 3,656
Exchange difference on translation of foreign operations - - (600) - - (600) - (600)
Total comprehensive income - - (600) - 3,656 3,056 - 3,056
Dividends - - - - (3,017) (3,017) - (3,017)
New share capital subscribed 18 966 - - - 984 - 984
Deferred tax through equity - - - - (136) (136) - (136)
Current tax through equity - - - - 593 593 - 593
Share based payment transactions - - - - 824 824 - 824
At 30 June 2021 471 13,600 (203) 2,205 14,687 30,760 7 30,767
*The consolidated statement of changes in equity has been restated, see note
8.
Tristel Plc
Consolidated Statement of Cash Flows for the Year Ended 30 June 2022
2022 2021
Cash flows from operating activities Note £000 £000
Profit before tax 1,495 3,761
Adjustments to cash flows from non-cash items
Depreciation of leased assets 973 772
Depreciation of plant, property & equipment 632 591
Impairment of goodwill 67 67
Amortisation of intangible assets 1,105 1,383
Impairment of intangibles 2,439 -
Share based payments - IFRS 2 596 824
Movement on fair value asset - 807
Loss on disposal of property, plant and equipment 20 73
Lease interest 193 195
Other interest 2 -
Finance income (1) (1)
7,521 8,472
Working capital adjustments
(Increase)/decrease in inventories (154) 353
(Increase)/decrease in trade and other receivables (596) 1,167
(Decrease) in trade and other payables (253) (1,196)
Lease interest paid (193) (195)
Corporation tax paid (772) (1,925)
Net cash flow from operating activities 5,553 6,676
Cash flows from investing activities
Interest received 1 1
Purchase of intangible assets (898) (608)
Purchase of property plant and equipment (305) (1,159)
Net cash used in investing activities (1,202) (1,766)
Cash flows from financing activities
Payment of lease liabilities (930) (797)
Share issues 398 984
Dividends paid 5 (3,091) (3,017)
Net cash used in financing activities (3,623) (2,830)
Net increase in cash and cash equivalents 728 2,080
Cash and cash equivalents at the beginning of the year 8,094 6,212
Exchange differences on cash and cash equivalents 61 (198)
Cash and cash equivalents at the end of the year 8,883 8,094
Tristel Plc
Consolidated Statement of Cash Flows for the Year Ended 30 June 2022
(continued)
Net Funds - liabilities from financing activities and other assets
Leases Cash Total
£000 £000 £000
Net funds at 30 June 2020 (6,002) 6,212 210
Cash movement - 1,882 1,882
Payment of lease liabilities 992 - 992
Lease interest (195) - (195)
Acquisition - leases (702) - (702)
Foreign exchange adjustments 2 - 2
Net funds as at 30 June 2021 (5,905) 8,094 2,189
Cash movement 789 789
Payment of lease liabilities 1,123 - 1,123
Lease interest (193) - (193)
Acquisition - leases (858) - (858)
Foreign exchange adjustments 22 - 22
Net funds as at 30 June 2022 (5,811) 8,883 3,072
1 Accounting policies
Basis of accounting
These financial statements have been prepared in accordance with UK adopted
international accounting standards and in accordance with the provisions of
the Companies act 2006.
Tristel plc, the Group's ultimate parent company, is a limited liability
company incorporated and domiciled in the United Kingdom.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to 30 June 2022. Subsidiaries are entities
over which the Group has rights or is exposed to variable returns from its
involvement with the investee and has the power to affect those returns by
controlling the financial and operating policies so as to obtain benefits from
its activities. The Group obtains and exercises control through voting rights.
Unrealised gains on transactions between the Group and its subsidiaries are
eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Amounts reported
in the financial statements of subsidiaries have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the acquisition method. The
acquisition method involves the recognition at fair value of all identifiable
assets and liabilities, including contingent liabilities of the subsidiary, at
the acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. These fair values
are also used as the basis for subsequent measurement in accordance with the
Group accounting policies. Goodwill is stated after separating out
identifiable intangible assets. Goodwill represents the excess of the
aggregate of the consideration transferred and the amount of non-controlling
interest over the fair value of the Group's share of the identifiable net
assets of the acquired subsidiary at the date of acquisition.
Non-controlling interests, presented as part of equity, represent a proportion
of a subsidiary's profit or loss and net assets that is not held by the Group.
The Group attributes total comprehensive income or loss of subsidiaries
between the assets of the parent and the non-controlling interests based on
their respective ownership interests.
Audit exemption
The following subsidiaries are exempt from the requirements of the UK
Companies Act 2006 relating to the audit of individual accounts by virtue of
s479A of the Act:
• Tristel International Limited - Registered number 07874262
• Scorcher Idea Limited - Registered number 04602679
Parent Company exemption to disclose profit and loss account
The following company is exempt from the requirements of the UK Companies Act
2006 relating to the disclosure of a profit and loss account by virtue of
s408(3) of the Act:
• Tristel PLC - Registered number 04728199
Changes in accounting policy
Since 30 June 2021 a number of standards, amendments to or interpretations of
standards have been issued as shown by the following two tables, as follows:
Adoption of new and revised standards
The following accounting standards, interpretations and amendments have been
adopted by the Group in the year ended 30 June 2022:
Amendments to the following standards:
IFRS 4 Insurance Contracts - Deferral of IFRS 9
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform -
Phase 2
These amended standards did not have a material effect on the Group.
Accounting standards not yet adopted by the Group
The following accounting standards, interpretations and amendments have been
issued by the IASB but had either not been adopted by the UK or were not yet
effective in the UK at 30 June 2022:
IFRS 17 Insurance Contracts
IAS 1 Presentation of Financial Statements: Classification of Liabilities as
Current or Non-current
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting Policies
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates
IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
IAS 16 Property, Plant and Equipment
IAS 37 Provisions, Contingent Liabilities and Contingent Assets
IFRS 3 Business Combinations
IFRS 16 Leases: COVID-19 Related Rent Concessions
IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 -
Comparative Information
Amendments to Annual Improvements 2018-2020
The Directors do not expect the standards above to have a material effect and
have chosen not to adopt any of the above standards and interpretations
earlier than required.
2 Publication non-statutory accounts
The financial information set out above does not constitute the company's
statutory accounts for the years ended 30 June 2022 or 2021 but is derived
from those accounts. Statutory accounts for 2021 have been delivered to the
registrar of companies, and those for 2022 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The Board of Tristel plc approved the release of this Preliminary Announcement
on 24 October 2022.
3 Segmental Analysis
Management considers the Company's revenue lines to be split into three
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 82% of Company revenues (2021:
77%).
The second segment which constitutes 10% (2021: 13%) of the business activity,
relates to the manufacture and sale of hospital environmental surface
disinfection products.
The third segment addresses the pharmaceutical and personal care product
manufacturing industries, veterinary and animal welfare sectors and has
generated 8% (2021: 10%) of the Company's revenues this year. A number of
the products contained within this segment were discontinued during the year.
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.
Hospital medical device decontamination Hospital environmental surface disinfection Other revenue Total 2022
£000 £000 £000 £000
Revenue
From external customers 25,422 3,178 2,523 31,123
Cost of material (4,060) (1,292) (1,112) (6,464)
Segment gross profit 21,362 1,886 1,411 24,659
Gross margin 84% 59% 56% 79%
Centrally incurred income and expenses not attributable to individual
segments:
Depreciation and amortisation of non-financial assets (2,777)
Other administrative expenses (17,325)
Share-based payments (596)
Other income 167
Impairment of intangible assets (2,439)
Segment operating profit 1,689
Segment operating profit can be reconciled to Group profit before tax as
follows:
Finance (expense) (194)
Total profit before tax 1,495
Hospital medical device decontamination Hospital environmental surface disinfection Other revenues Total 2021
£000 £000 £000 £000
Revenue
From external customers 24,003 4,018 2,977 30,998
Cost of material (3,875) (1,286) (1,094) (6,255)
Segment gross profit 20,128 2,732 1,883 24,743
Gross margin 84% 68% 63% 80%
Centrally incurred income and expenses not attributable to individual
segments:
Depreciation and amortisation of non-financial assets (2,813)
Other administrative expenses (16,376)
Share based payments (824)
Other income 32
Segment operating profit 4,762
Segment operating profit can be reconciled to Group profit before tax as
follows:
Finance (expense) (194)
Movement on fair value of investments (807)
Total profit before tax 3,761
The Group's revenues from external customers are divided into the following
geographical areas:
Hospital medical device decontamination Hospital environmental surface disinfection Other revenues Total 2022
£000 £000 £000 £000
UK & Europe direct 17,990 2,534 1,737 22,261
APAC region direct 5,303 484 506 6,293
Worldwide distributors 2,129 160 280 2,569
Total Revenues 25,422 3,178 2,523 31,123
Hospital medical device decontamination Hospital environmental surface disinfection Other revenues Total 2021
£000 £000 £000 £000
UK & Europe direct 16,895 3,253 2,269 22,417
APAC region direct 5,023 663 357 6,043
Worldwide distributors 2,085 102 351 2,538
Total Revenues 24,003 4,018 2,977 30,998
Revenues from external customers in the Company's domicile (United Kingdom),
as well as its other major markets (Rest of the World) have been identified on
the basis of internal management reporting systems, which are also used for
VAT purposes.
Revenues derived from the UK (the largest CGU stated above) for 2022 were
£13.610m (2021: £13.906m). Revenues from all overseas subsidiaries total
£17.513m (2021: £17.092m.)
Hospital medical device decontamination revenues were derived from a large
number of customers but include £4.572m from a single customer which makes up
18% of this segment's revenue (2021: £5.727m, being 24%). Hospital
environmental surface disinfection revenues were derived from a number of
customers but include £1.636m from a single customer which makes up 51% of
this segment's revenue (£0.930, being 23%). Other revenues also were derived
from a number of customers, with the largest customer accountable for
£0.124m, which represents 5% of revenue for that segment (2021: £0.251m, 8%
from a single customer).
During the year 20% of the Group's total revenues were earned from a single
customer (2021: 22%).
4 Income tax
Tax charged in the income statement Restated*
2022 2021
£000 £000
Current taxation
Overseas tax 284 1,187
UK corporation tax - 133
UK corporation tax adjustment to prior periods - (156)
284 1,164
Deferred tax
Arising from origination and reversal of temporary differences 114 (974)
UK deferred tax adjustment to prior periods 314 -
Tax rate effect (144) (85)
284 (1,059)
Tax expense in the income statement 568 105
The tax on profit before tax for the year is higher than the standard rate of
corporation tax in the UK (2021 - lower than the standard rate of corporation
tax in the UK) of 19% (2021 - 19%).
The differences are reconciled below:
Restated*
2022 2021
£ 000 £ 000
Profit before tax 1,495 3,761
Corporation tax at standard rate 284 715
Adjustment in respect of prior years 314 (156)
Expenses not deductible for tax purposes 66 68
Increase from effect of foreign tax rates 25 307
Utilisation of previously recognised tax losses and recognised tax losses 118 (620)
carried forward
Tax rate differences (144) (85)
Enhanced relief on qualifying scientific research expenditure (95) (124)
Total tax charge 568 105
* See note 8 for restatement
5 Dividends
Amounts recognised as distributions to equity holders in the year:
2022 2021
£000 £000
Ordinary shares of 1p each
Final dividend for the year ended 30 June 2021 of 3.93p (2020: 3.84p) per 1,854 1,785
share
Interim dividend for the year ended 30 June 2022 of 2.62p (2021: 2.62p) per 1,237 1,232
share
3,091 3,017
Proposed final dividend for the year ended 30 June 2022 of 3.93p (2021: 3.93p) 1,856 1,851
per share
Special dividend for the year ended 30 June 2022 of 3.00p per share (2021: 1,417 -
nil)
Company
Dividend received from subsidiaries (7,515) (4,332)
The proposed final dividend is subject to approval by shareholders at the
forthcoming Annual General Meeting and has not been included as a liability in
the financial statements.
6 Earnings per share
The calculations of earnings per share are based on the following profits and Restated*
number of shares:
2022 2021
£000 £000
Retained profit for the financial year attributable to equity holders of the 927 3,656
parent
Shares Shares
'000 '000
Number Number
Weighted average number of ordinary shares for the purpose of basic earnings 47,187 46,539
per share
Share options 582 494
47,769 47,033
Earnings per ordinary share
Basic 1.96p 7.86p
Diluted 1.94p 7.77p
The Group also presents an adjusted basic earnings per share figure which
excludes the share-based payments charge:
Restated*
2022 2021
£000 £000
Retained profit for the financial year attributable to equity holders of the 927 3,656
parent
Adjustments:
Fair value movement on investments - 807
Impairment of intangible assets 2,439 -
Share based payments 596 824
Net adjustments 3,035 1,631
Adjusted earnings 3,962 5,287
Adjusted basic earnings per ordinary share 8.40p 11.36p
* See note 8 for restatement
7 Share capital
Allotted, called up and fully paid shares
2022 2021
No. 000 £ 000 No. 000 £ 000
Ordinary of £0.01 each 47,244 472.44 47,094 470.94
Number £000
30 June 2021 47,094,443 471
Issued during the year 155,550 2
30 June 2022 47,249,993 473
155,550 ordinary shares of 1 pence each, related to the exercise of 155,550
share options were issued during the year (2021: 1,797,910). The weighted
average exercise price was 3.15 pence (2021: 51.00p).
During the year 1,306 ordinary shares of 1 pence each were issued at a premium
of £396,000 (2021: 966,000) which is recorded in the share premium account.
8 Prior year restatement
During the current year, it was identified that deferred tax assets relating
to unrecognised taxable losses of £3,600,000 in the UK had not been
recognised in the prior year. Based on the circumstances in the prior year,
these should have been recorded as a deferred tax asset at 19%, equating to
£684,000. The prior year financial statements have been restated for this
adjustment. In addition, in the prior year an income tax receivable for
£170,000 was inappropriately classified as an income tax liability. The prior
year comparatives have been restated to correctly reclassify the balance as an
income tax receivable.
9 Non- GAAP measures
Income statement reconciliation
The group presents adjusted profit measures (operating profit/EBIT, Profit
after tax, Profit before tax and EBITDA) by making adjustments for costs and
profits, which management believes to be significant by virtue of their size,
nature or incidence or which have a distortive effect on current year
earnings. Such items may include, but are not limited to, share based
payments expense, impairments, fair value movements on investments and
restructuring. In addition, the group presents EBITDA and adjusted EBITDA
(adjusted in the same manner) as management believes that this is an important
metric for the shareholders. The group uses adjusted measures to evaluate
performance and as a method to provide shareholders with clear and consistent
reporting. See below reconciliation of operating profit (EBIT), profit
before tax, net profit and EBITDA to the respective adjusted measures.
Specific adjusting items
2022 2022
Adjusted profit measures Statutory £000 1 2 Adjusted £000
Operating profit (EBIT) 1,689 2,439 596 4,724
Net finance costs (194) (194)
Profit before tax 1,495 2,439 596 4,530
Income tax expense (568) (610) (1,178)
Profit attributable to equity shareholders 927 1,829 596 3,352
Effective tax rate 38% 25% 0% 26%
Profit before tax margin 5% 15%
Profit for the year 927 1,829 596 3,352
Income tax credit/(expense) 568 610 - 1,178
Net finance cost 194 - - 194
Depreciation, amortisation and impairments 5,216 (2,439) - 2,777
EBITDA 6,905 - 596 7,501
Revenue for the year 31,123 - - 31,123
EBITDA margin 22% - - 24%
Specific adjusting items
2021 2021
Adjusted profit measures Statutory £000 2 3 Adjusted £000
Operating profit (EBIT) 3,955 824 807 5,586
Net finance costs (194) (194)
Profit before tax 3,761 824 807 5,392
Income tax expense - restated (105) (105)
Profit attributable to equity shareholders 3,656 824 807 5,287
Effective tax rate 2.9% 0% 0% 2%
Profit before tax margin 12% 17%
Profit for the year 3,656 824 807 5,287
Income tax expense 105 - - 105
Net finance cost 194 - - 194
Depreciation, amortisation and impairments 2,813 - - 2,813
EBITDA 6,768 824 807 8,399
Revenue for the year 30,998 - - 30,998
EBITDA margin 22% - - 27%
Specific adjusting items are as follows:
1. Impairment of intangibles in relation to the current year product
rationalisation project.
2. Share based payment charges under IFRS 2.
3. Movement in fair value of investments in relation to the prior year
decision to reduce the fair value of the investment in Mobile ODT to zero.
10 Annual report
Printed copies of the annual report and financial statements, along with the
notice of AGM, will be sent to shareholders prior to the Company's Annual
General Meeting taking place on 12 December 2022 in Snailwell, Newmarket.
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