TIDMTSTL
RNS Number : 2668E
Tristel PLC
17 October 2018
Tristel plc
("Tristel", the "Company" or the "Group")
Final Results
Audited Results for the year ended 30 June 2018
Tristel plc (AIM: TSTL), the manufacturer of infection
prevention and contamination control products, announces its
audited results for the year ended 30 June 2018.
Financial Highlights
-- Turnover up 10% to GBP22.2m (2017: GBP20.3m)
-- Overseas sales up 19% to GBP11.4m (2017: GBP9.6m),
representing 51% of total sales (2017: 47%)
-- EBITDA before share-based payments up 16% to GBP6.2m (2017:
GBP5.3m). Unadjusted GBP5.5m (2017: GBP5.2m)
-- Pre-tax profit before share-based payments up 15% to GBP4.7m
(2017: GBP4.1m). Unadjusted GBP4m (2017: GBP4m)
-- Pre-tax margin before share-based payments increased to 21%
(2017: 20%). Unadjusted 18% (2017: 20%)
-- Adjusted EPS 9.16p up 10% (2017: 8.34p)
-- Basic EPS 7.62p down 5% due to share-based payments of GBP0.66m (2017: GBP0.12m)
-- Dividend per share for the full year increased by 13.6% to 4.58p (2017: 4.03p)
-- Net cash of GBP6.7m at year-end (2017: GBP5.1m). Company remains debt free
Operational Highlights
-- Approval from USA Environmental Protection Agency (EPA) for foam-based product Duo
-- Commercial collaboration concluded with Parker Laboratories
Inc, USA, establishing manufacturing capability and national
distribution network in USA
-- Board transition plan progressing
Paul Swinney, Chief Executive of Tristel plc, said: "We made
solid progress during the year. Whilst sales growth was at the
lower end of our target range, adjusted pre-tax profit and net
margin exceeded both market expectations and our internal plan.
Once again, the driver for top-line growth was our overseas
activity which now accounts for more than half of the Group's
business. Our plans to enter the United States market remain on
track and continue to progress well. During the year we secured our
first product approval and established our capability to
manufacture and sell nationwide. We are waiting for additional
approvals from the EPA for enhanced product claims for Duo and
state registrations before we will start active promotion and
marketing in the USA. We expect to intensify these activities in
the second half of the current financial year. Our submission to
the Food and Drug Administration for Duo is progressing well and we
recently received very constructive feedback from the agency which
will help guide us to its completion.
"Brexit looms. Our response to the uncertainty surrounding this
event is to build inventory of all component parts and finished
products. We have advised our continental customers to increase
their stockholdings over the coming months in preparation for
possible disruption to the supply chain. Based upon available
advice, we believe that we will be able to CE mark our
disinfectants and sell them within Europe irrespective of the
outcome of the Brexit negotiation. The only certainty is that we
will experience turbulence this year and our normally predictable
pattern of trade will be disrupted to some extent. Notwithstanding
this near-term uncertainty, the outlook for the Company remains
very positive."
For further information:
Tristel plc Tel: 01638 721 500
Paul Swinney, Chief Executive
Liz Dixon, Finance Director
Walbrook PR Ltd Tel: 020 7933 8780 or tristel@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
FinnCap
Geoff Nash / Giles Rolls (Corporate Tel: 020 7600 1658
Finance)
Alice Lane (ECM)
Chairman's Statement
We made solid progress during the year to 30 June 2018. Sales
grew to GBP22.2m from GBP20.3m in 2017, an increase of 10%. For the
first time in our history, overseas sales represented more than
half of all worldwide sales (51% overseas versus 49% United
Kingdom), with overseas sales forging ahead by 19% during the year,
whilst UK sales advanced only marginally by 2%. This difference in
the pace of growth reflects the high market penetration that
Tristel enjoys in the United Kingdom.
Pre-tax profit before share-based payments was GBP4.7m which was
ahead of market expectations and compared to GBP4.1m last year, an
increase of 15%. Our pre-tax profit margin, before share-based
payments, which is a key measure of our performance, was 21% (2017:
20.2%). Adjusted earnings per share (EPS), before share-based
payments, were 9.16 pence, up from 8.34 pence last year. Basic EPS
were 7.62 pence, a 5% decline from last year due to a share-based
payment charge of GBP0.66m (2017: GBP0.12m). This charge is a non
cash item and is a direct consequence of a higher share price as
Tristel continues to grow its revenue and profits.
The Company has continued to be highly cash generative and on 30
June 2018 the cash balance was GBP6.7m (2017: GBP5.1m). In line
with the Company's ordinary dividend policy, the Board is
recommending that the final dividend is 2.98 pence (2017: 2.63
pence), an increase of 13.3%. Including the interim dividend of
1.60 pence (2017: 1.40 pence), and the proposed final dividend, the
total dividend for the year will be 4.58 pence (2017: 4.03 pence),
an increase of 13.6%.
We continued to invest for future growth during the year. We
spent GBP0.5m on product development and testing (2017: GBP0.2m)
and GBP0.2m on intellectual property protection (2017: GBP0.2m).
Both these expenditures are held in intangible assets. We invested
GBP0.981m in regulatory and product enhancement programmes where we
have recognised this cost as an expense. Included in this cost is
an amount of GBP0.5m (2017: GBP0.5m) relating to the United States.
Our project to enter this market commenced in 2014. Since we first
initiated this plan our cumulative investment in gaining regulatory
approvals in the United States and establishing a commercial
structure there has been GBP1.2m.
Whilst no revenues have yet been generated from the United
States, significant progress has been made to build a commercial
platform from which to enter the market. During the year we
received our first regulatory approval from the Environmental
Protection Agency (EPA) for our foam-based Duo product. Since the
year-end we have made a second submission to the EPA to extend
Duo's product claims as an intermediate level disinfectant, and are
well advanced in generating the data for our first submission for a
510(K) approval from the Food and Drug Administration (FDA). This
is also for Duo and will position the product as a high-level
disinfectant. We have cemented a partnership with Parker
Laboratories Inc, (Parker) which means we have put in place
manufacturing capability and a national distribution network. We do
not yet have employees in the United States but have established a
subsidiary.
Our people are critical to our success and in this statement, my
last address as Chairman, I would like to pay tribute to and thank
all our employees who have given service to this Company during the
past twenty-five years. At the forthcoming AGM in December I shall
retire as Non-Executive Chairman and Director of the Company. I am
honoured that your Board has invited me to assume the titular role
of Honorary Life President and as the Company's largest shareholder
I shall continue to follow Tristel's progress with keen
interest.
We are working to appoint new Non-Executive Directors to bring
fresh ideas and new experiences to our Board. To ensure continuity
as these new appointments bed in, the Board has decided to propose
to shareholders at the AGM that Paul Barnes be appointed interim
Non-Executive Chairman for a one-year term. Paul has been a
Non-Executive director since 2010 and will retire from the Board in
December 2020.
This is a time of change, within our Company and in the world at
large. However, many things remain the same: our core strategic
objective continues to be to achieve consistent and sustainable
growth of the business and the value of our shareholders'
investment in the Company. We have entered the last year of a
three-year financial plan established in October 2016 and the
targets set then continue to be the measure and judge of our
performance. The targets are to grow revenue within a range of 10%
to 15% as an annual average over the three years to June 2019
whilst maintaining a minimum pre-tax margin of 17.5%. We are
achieving these objectives and thereby creating the conditions for
consistent and sustainable growth in earnings and dividends. Our
core objective is grounded in the belief that, over time, share
price growth will follow EPS growth and the cash returns we achieve
for shareholders.
Tristel was founded in October 1993 and is now a twenty-five
year old business. I very much believe that your Company has many
more successful years ahead of it.
Francisco Soler
Chairman
Chief Executive's Report
Current year - Overview
Group revenue was up 10%, adjusted pre-tax profit was up 15% and
adjusted EPS was up 10%. We ended the year with cash of GBP6.7m.
The Company is debt-free.
In October 2016, we set out our financial plan for the three
years to 30 June 2019. Its objectives are sales growth in the range
of 10% to 15% per annum as an annual average over the three years,
which is a Key Performance Indicator (KPI) of the Company. A second
KPI is to achieve a pre-tax profit margin (excluding share-based
payment charges) of at least 17.5%. We can report that both these
KPI's have been met in 2018, the second year of the current
three-year plan.
We are proposing a final dividend of 2.98 pence per share (2017:
2.63 pence), making 4.58 pence (2017: 4.03 pence) in total for the
year, an increase of 13.6%. If approved, the final dividend will be
paid on 14 December 2018 to shareholders on the register at 16
November 2018. The corresponding ex-dividend date is 15 November
2018.
Our business: What our marketplace looks like
Our entire business is focussed on preventing the transmission
of microbes from one object or person to another. We pursue this
purpose because microbes can be a source of infection to humans and
animals. They can cause illness or death and place a heavy cost on
individuals and society. We achieve our purpose by applying a very
powerful disinfectant - chlorine dioxide - to the target surface or
medical instrument.
We are unique worldwide in using chlorine dioxide as a
high-performance disinfectant for medical instruments. And we are
one of a very few companies worldwide that can legitimately claim
to be exclusively an infection prevention business.
Our mission is most relevant to hospitals where the risks of
infection to individuals are highest. In the human healthcare
market, we brand our products Tristel. The risk of cross infection
is also relevant to veterinary practices, or animal hospitals, and
in the animal healthcare market we brand our products Anistel.
Finally, the control of microbial contamination is very relevant in
critical manufacturing environments, for example cleanrooms, and in
this market our products are branded Crystel.
A hospital is a vast, multi-faceted organisation. We are not
only unique in providing chlorine dioxide as a high-performance
disinfectant within hospitals, but we are also unique in our focus
upon specific clinical departments within them. We target clinical
departments that carry out diagnostic procedures with small
heat-sensitive medical instruments. These include: the nasendoscope
used in Ear, Nose and Throat departments; the laryngoscope blade
used in emergency medicine; tonometers used in ophthalmology, and
ultrasound probes used in both women and men's health. In these
departments, we are the only simple to implement, affordable,
high-performance disinfection method available. Consequently, in
geographical markets in which we have been present for some time,
we hold truly dominant market positions.
Brexit looms. Our response to the uncertainty surrounding this
event is to build inventory of all component parts and finished
products. We have advised our continental customers to increase
their stockholdings over the coming months in preparation for
possible disruption to the supply chain. Based upon available
advice, we believe that we will be able to CE mark our
disinfectants and sell them within Europe irrespective of the
outcome of the Brexit negotiation. The only certainty is that we
will experience turbulence this year and our normally predictable
pattern of trade will be disrupted to some extent. Notwithstanding
this near-term uncertainty, the outlook for the Company remains
very positive.
Exploring new territories with chlorine dioxide
In June 2017 we made our first equity investment in Mobile ODT
(MODT), the Israeli company that combines smartphone technology
with hand-held medical devices to make diagnostics available at the
point-of-care. We have expanded our commercial collaboration with
MODT to include a version of our Duo product labelled for use with
MODT's mobile colposcope and branded Duo EVE in association with
MODT's EVA colposcope system. After our 30 June year-end, we have
also become MODT's distributor for EVA in the United Kingdom,
Australia and New Zealand.
How We Service Our Market
Over 95% of our revenues are of repeat consumable products that
perform a vital function in hospitals. Their use is for the most
part non-discretionary. Our products are typically small packaged
goods, requiring no after sales service, other than comprehensive
training. Capital sales, service and maintenance do not feature,
therefore, in a significant way in our revenue model.
We sell our products directly to end-users in those markets in
which we have established a direct operational presence, and
through distributors in markets where we have no presence.
Our revenues - by sales channel
GBP000's 2017-18 2016-17 Year on year Percentage
change change
Human Healthcare Direct sales UK 8,912 8,910 2 0%
EU 4,087 3,237 850 26%
ROW 3,961 3,580 381 11%
Sales to distributors EU 1,559 1,358 201 15%
ROW 1,350 1,022 328 32%
Contamination
Control Direct sales UK 1,258 1,129 129 11%
EU 34 18 16 89%
ROW 44 8 36 444%
Sales to distributors EU 96 132 (36) (27)%
ROW - 1 (1) (100)%
Animal Healthcare Direct sales UK 96 114 (18) (16)%
EU 3 5 (2) (40)%
ROW 195 180 15 8%
Sales to distributors UK 569 522 47 9%
EU 56 57 (1) (1)%
Group sales 22,220 20,273 1,947 10%
Our revenues - by technology
The majority of our sales are of chlorine dioxide (CI02) based
products; but we do formulate, manufacture and sell products
utilising other disinfectant chemistries. These include quaternary
ammonium compounds, peracetic acid and alcohol. In 2018, GBP3.8m of
our sales were of non-chlorine dioxide chemistries representing 17%
of the total (2017: GBP3.6m representing 18%). As our chlorine
dioxide product sales increase at a faster pace than non-chlorine
dioxide product sales, and as we continue to find ways to persuade
customers to switch to chlorine dioxide as a superior disinfection
technology, we expect this percentage to continue to decline.
GBP000's 2017-18 2016-17 Year on year Percentage
change change
Human Healthcare Direct sales CI02 16,167 14,877 1,290 9%
Other 793 850 (57) (7)%
Sales to distributors CI02 1,995 1,715 280 16%
Other 914 665 249 37%
Contamination
Control Direct sales CI02 148 47 101 215%
Other 1,188 1,082 106 10%
Sales to distributors CI02 56 36 20 56%
Other 40 123 (83) (67)%
Animal Healthcare Direct sales CI02 30 1 29 2800%
Other 264 298 (34) (11)%
Sales to distributors CI02 5 5 - 0%
Other 620 574 46 8%
Group sales 22,220 20,273 1,947 10%
Our revenues - by portfolio and geographical split
Revenues increased by 10% in the year. UK sales grew by 2% and
overseas sales by 19%. Overseas sales are made via two channels:
through the Company's wholly-owned subsidiaries in Germany, Poland,
Russia, Hong Kong, China, Australia, New Zealand and via third
party distributors. Overseas subsidiary sales increased by 18% to
GBP8.32m in the year, whilst overseas sales to distributors
increased by 19% to GBP3.06m.
Our Strategic Assets
We consider the assets that enable the Company to achieve its
strategic goals to be:
-- Our chlorine dioxide chemistry, about which there are three critically important elements:
1. The formulation is proprietary;
2. We remain the only company using chlorine dioxide for the
decontamination of medical instruments in the world, which gives us
a genuine point of difference from all other infection prevention
companies;
3. The length of time that we have enjoyed this 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 newcomer significant time
and cost to match.
-- Intellectual property protection - at 30 June 2018, we held
250 patents granted in 36 countries providing legal protection for
our products;
-- Our people - who hold an unrivalled body of knowledge
relating both to infection prevention and to chlorine dioxide.
Our proprietary chlorine dioxide chemistry
The competitive advantage that we hold is that we are the only
company worldwide using chlorine dioxide to disinfect medical
instruments.
With this same chemistry, we have also established a bridgehead
in hospital surface disinfection, the veterinary market, and the
contamination control market. We are developing a number of new
products that could be "game-changers" in these disinfection
applications.
Our research and development programme has centred around our
chlorine dioxide portfolio, both in terms of chemistry and delivery
methods. The key chemistry improvements that are sought relate to
an increase in microbial efficacy, a reduction in hazards and
improved efficiency of manufacture. In parallel, packaging and
delivery forms are being developed that enhance and simplify the
user experience.
Our regulatory programme succeeded in attaining 43 approvals for
16 products in 20 countries during the year.
Our intellectual property protection
We have 250 patents granted in 36 countries. The progress that
the Company has made during the past four years in building its
patent portfolio is demonstrated below:
Year to 30 June CI02 CI02 hand Trigger CI02 decontamination CI02 wipes Total Granted
foam disinfectant spray technology device system patents
2018 12 44 113 54 27 250
2017 12 40 101 49 27 229
2016 12 37 52 29 26 156
2015 11 35 2 23 26 97
Our people
At Tristel the basic qualities we seek in our staff are
integrity, inquisitiveness and humility. In our management team, we
also look for excellent decision making and execution ability and a
"know no boundaries" approach. We believe that these qualities can
make the highest possible performance achievable. We view our
colleagues as a key strategic asset of the business.
Delivering on our key strategic financial goal
Our key strategic financial goal is to deliver long term
sustainable growth. The two key performance measures that we target
are:
-- Consistent revenue growth - during the past five years,
revenue has grown from GBP13.5m to GBP22.2m - an increase of 64%.
The compound annual growth rate in revenue since the Company went
public in 2005 has been 15%. Our three year target is to grow
revenues in the range of 10% to 15% on average each year up to 30
June 2019.
-- Maintaining the profitability of the Company - during the
year the Company achieved a (before share based payments) pre-tax
margin of 21%. The benchmark (before share based payments) pre-tax
margin we set for the plan period was 17.5%.
The corollary to achieving these targets is that we are likely
to be highly cash generative given the operational cash
requirements of the business. If the Board considers that there are
no earnings enhancing opportunities to invest excess cash, a
special dividend will be paid to shareholders.
The Board's pursuit of these financial objectives is grounded in
the belief that consistent and sustainable increases in earnings
and dividends will, over time, result in share price growth.
Progress in North America
In 2014, we explained to our shareholders that we had embarked
upon a United States regulatory approvals programme. To date we
have focussed upon our chlorine dioxide foam-based product Duo.
We have received approval for Duo from the EPA as an
intermediate level disinfectant and will commence manufacture and
marketing on a limited scale during the year ending 30 June
2019.
We are preparing a submission to the FDA for Duo as a high-level
disinfectant. The intended use patterns will be for intra-cavity
ultrasound probes, nasendoscopes, and lastly certain ophthalmic
devices. If successful, this will position us in three of the
clinical areas in which we are most successful in other
geographical markets. We expect to submit the application for
510(K) approval during the financial year ending 30 June 2019.
We have appointed Parker as our contract manufacturer for supply
to each of these targeted clinical areas. We have granted Parker
marketing rights for Duo's use in ultrasound where they are the
market leader in the United States for ultrasound conductive gels.
In the ultrasound segment, the contractual arrangement is
royalty-based.
Focus
We have set objectives which are visible to everyone inside the
Company, and we make them equally visible to all other
stakeholders.
We look forward to meeting these objectives in the current
financial year and continuing the progress of the Company. We look
to the future with confidence as Tristel continues to grow and
expand its geographical reach.
Paul Swinney
Chief Executive Officer
16 October 2018
Tristel plc
Consolidated Income Statement & Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2018
--------------------------------------------------------------------------
2018 2017
Note GBP 000 GBP 000
Revenue 22,220 20,273
Cost of sales (5,040) (4,598)
--------- ------------
Gross profit 17,180 15,675
Share based payments (665) (121)
Depreciation, amortisation and impairments (1,564) (1,310)
Administrative expenses (10,971) (10,342)
--------- ------------
Operating profit 3,980 3,902
--------- ------------
Net finance income 2 4
Other income - 41
Share of profit of equity accounted
investees 24 19
--------- ------------
Profit before tax 4,006 3,966
Income tax expense 4 (734) (549)
--------- ------------
Profit for the year 3,272 3,417
========= ============
Profit attributable to:
Owners of the company 3,272 3,417
========= ============
Earnings per share from total and
continuing operations attributable
to equity holders of the parent
2018 2017
Basic - pence 6 7.62 8.06
Diluted - pence 6 7.33 7.80
2018 2017
Note GBP 000 GBP 000
Profit for the year 3,272 3,417
Items that will be reclassified subsequently
to profit or loss
Foreign currency translation (losses)/gains (112) 47
--------- ------------
Total comprehensive income for the
year 3,160 3,464
========= ============
Total comprehensive income attributable
to:
Owners of the company 3,160 3,464
========= ============
Tristel plc
Consolidated Balance Sheet
As at 30 June 2018
-----------------------------------------------------------------------------------
30 June 30 June
2018 2017
Note GBP 000 GBP 000
Assets
Non-current assets
Property, plant and equipment 1,328 1,409
Goodwill 998 1,065
Intangible assets 5,954 5,924
Investments 589 589
Deferred tax asset 399 -
------------- -------------
9,268 8,987
------------- -------------
Current assets
Inventories 2,279 2,292
Trade and other receivables 4,332 3,745
Cash and cash equivalents 6,661 5,088
------------- -------------
13,272 11,125
------------- -------------
Total assets 22,540 20,112
============= =============
Equity and liabilities
Equity
Share capital 7 432 427
Share premium 11,058 10,705
Foreign currency translation
reserve (66) 46
Merger reserve 478 478
Retained earnings 6,518 4,399
------------- -------------
Equity attributable to owners
of the company 18,420 16,055
Non-controlling interests 7 7
------------- -------------
Total equity 18,427 16,062
------------- -------------
Non-current liabilities
Deferred tax liability 205 175
Current liabilities
Trade and other payables 3,201 3,147
Income tax liability 707 728
------------- -------------
3,908 3,875
------------- -------------
Total liabilities 4,113 4,050
------------- -------------
Total equity and liabilities 22,540 20,112
============= =============
Approved by the Board on 16 October 2018
and signed on its behalf by:
EA Dixon
Director
Tristel plc
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
---------------------------------------------------------------------------------------------------
Foreign Non-
Share Share currency Other Retained controlling Total
capital premium translation reserves earnings Total interests equity
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 July 2017 427 10,705 46 478 4,399 16,055 7 16,062
Exchange
difference on
translation
of foreign
operations - - (112) - - (112) - (112)
Profit - - - - 3,272 3,272 - 3,272
------- ------- ----------- -------- -------- ------- ----------- -------
Total
comprehensive
income - - (112) - 3,272 3,160 - 3,160
Dividends paid - - - - (1,818) (1,818) - (1,818)
New share
capital
subscribed 5 353 - - - 358 - 358
Share based
payment
transactions - - - - 665 665 - 665
------- ------- ----------- -------- -------- ------- ----------- -------
Total
transactions
with owners 5 353 - - (1,153) (795) - (795)
------- ------- ----------- -------- -------- ------- ----------- -------
At 30 June
2018 432 11,058 (66) 478 6,518 18,420 7 18,427
------- ------- ----------- -------- -------- ------- ----------- -------
Foreign Non-
Share Share currency Other Retained controlling Total
capital premium translation reserves earnings Total interests equity
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 July 2016 421 10,411 (1) 478 3,648 14,957 7 14,964
Profit for the
year - - - - 3,417 3,417 - 3,417
Exchange
difference on
translation
of foreign
operations - - 47 - - 47 - 47
------- ------- ----------- -------- -------- ------- ----------- -------
Total
comprehensive
income - - 47 - 3,417 3,464 - 3,464
Dividends paid - - - - (2,787) (2,787) - (2,787)
New share
capital
subscribed 6 294 - - - 300 - 300
Share based
payment
transactions - - - - 121 121 - 121
------- ------- ----------- -------- -------- ------- ----------- -------
Total
transactions
with owners 6 294 - - (2,666) (2,366) - (2,366)
------- ------- ----------- -------- -------- ------- ----------- -------
At 30 June
2017 427 10,705 46 478 4,399 16,055 7 16,062
------- ------- ----------- -------- -------- ------- ----------- -------
Tristel plc
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
-----------------------------------------------------------
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 4,006 3,966
Adjustments to cash flows from
non-cash items
Depreciation of plant, property
& equipment 548 564
Amortisation of intangible asset 950 679
Impairment of intangible asset 67 67
Gain on settlement of pre-existing
agreement - (41)
Share based payments - IFRS 2 665 121
Profit on disposal of property,
plant and equipment (17) (16)
Loss on disposal of intangible - -
asset
Unrealised loss on foreign exchange (78) -
Finance income (2) (4)
------- -------
6,139 5,336
Working capital adjustments
Decrease/(increase) in inventories 13 (294)
Increase in trade and other receivables (587) (1)
Increase/(decrease) in trade
and other payables 54 (235)
Corporation tax paid (1,124) (454)
------- -------
Net cash flow from operating
activities 4,495 4,352
------- -------
Cash flows from investing activities
Interest received 2 4
Purchase of intangible assets (997) (419)
Purchase of trade and assets - (994)
Purchase of investments - (589)
Purchase of property plant and
equipment (516) (585)
Proceeds from sale of property
plant and equipment 63 45
------- -------
Net cash used in investing activities (1,448) (2,538)
------- -------
Cash flows from financing activities
Share issues 358 300
Dividends paid (1,818) (2,787)
------- -------
Net cash used in financing activities (1,460) (2,487)
------- -------
Net increase/(decrease) in cash
and cash equivalents 1,587 (673)
Cash and cash equivalents at
the beginning of the period 5,088 5,715
Exchange differences on cash
and cash equivalents (14) 46
------- -------
Cash and cash equivalents at
the end of the period 6,661 5,088
======= =======
1. ACCOUNTING POLICIES
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU).
There have been no new financial reporting standards effective
for the year which have impacted the accounting policies stated
below. 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 2018.
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.
EU adopted IFRSs not yet applied
As of 30 June 2018, the following Standards and Interpretations
are in issue but not yet effective and have not been adopted early
by the Group:
-- IFRS 16 Leases (effective 1 January 2019)
-- IFRS 17 Insurance contracts (effective 1 January 2021)
The Directors anticipate that the adoption of these standards
and interpretations in future periods will have no material effect
on the financial statements of the Group, except for IFRS 16. Under
IFRS 16, the majority of lease obligations of the group, currently
accounted for as operating leases, will be recognised as assets on
the statement of financial position with a corresponding
liability.
Standards effective from 1 January 2018
The following standards and interpretations apply for the first
time to financial reporting periods commencing on or after 1
January 2018:
-- IFRS 9 Financial instruments (effective 1 January 2018)
-- IFRS 15 Revenue from contracts with customers (effective 1
January 2018)
IFRS 15 - 'Revenue from contracts with customers' will be
adopted for the financial year commencing 1 July 2018. Currently
revenue is recognised on product sales when the Group has
transferred to the buyer the significant risks and rewards of
ownership, which is generally when the customer has taken
undisputed delivery of the goods. Under IFRS 15 the company must
evaluate contracts with customers to determine the distinct
performance obligations and consider the appropriate timing of
revenue recognition based on when control of the product sales has
passed to the buyer. Whilst the new financial reporting standard
represents significant new guidance, the implementation of this
guidance is not expected to have a significant impact on the timing
or amount of revenue recognised by the Group in any year.
There have been no new financial reporting standards,
interpretations and amendments effective for the first time from 1
July 2017 which have had a material effect on the financial
statements.
2. PUBLICATION NON-STATUTORY ACCOUNTS
The financial information set out in this Audited Preliminary
Announcement does not constitute the Group's statutory accounts for
the years ended 30 June 2018 or 2017, as defined in Section 435 of
the Companies Act 2006, but is derived from those accounts.
Statutory accounts for the year ended 30 June 2017 have been
delivered to the Registrar of Companies, and those for 2018 will be
delivered in due course. The auditors Grant Thornton UK LLP have
reported on those accounts; their reports were (1) unqualified,
(ii) did not include a reference to any matters to which the
auditors 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 audited
Preliminary Announcement on 16 October 2018.
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 infection
control and hygiene products that includes the Company's chlorine
dioxide chemistry, and are used primarily for infection control in
hospitals. This segment generates approximately 90% of Company
revenues (2017: 89%).
The second segment which constitutes 4% (2017: 4%) of the
business activity, relates to the manufacture and sale of
disinfection and cleaning products, principally into veterinary and
animal welfare sectors ("Animal healthcare"). During prior years
all sales for this segment were made to a distributor who supplied
the end user.
The third segment addresses the pharmaceutical and personal care
product manufacturing industries ("Contamination control"), and has
generated 6% (2017: 7%) of the Company's revenues this 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.
Contamination
Human Healthcare Animal Healthcare Control Total 2018
GBP000 GBP000 GBP000 GBP000
Revenue
From external
customers 19,869 919 1,432 22,220
Cost of material 4,161 369 510 5,040
---------------- ----------------- ------------- ----------
Segment gross
profit 15,708 550 922 17,180
Gross margin 79% 60% 64% 77%
Centrally incurred income and expenses not attributable
to individual segments:
Depreciation and amortisation of non-financial
assets 1,564
Other administrative expenses 10,971
Share-based payments 665
Segment operating profit 3,980
Segment operating profit can be reconciled to
Group profit before tax as follows:
Finance income 2
Results from equity accounted associate 24
Total profit before tax 4,006
----------
3. SEGMENTAL ANALYSIS - Continued
Contamination
Human Healthcare Animal Healthcare Control Total 2017
GBP000 GBP000 GBP000 GBP000
Revenue
From external
customers 18,107 878 1,288 20,273
Cost of material 3,881 223 494 4,598
---------------- ----------------- ------------- ----------
Segment gross
profit 14,226 655 794 15,675
---------------- ----------------- ------------- ----------
Gross margin 79% 75% 62% 77%
Centrally incurred income and expenses not attributable
to individual segments:
Depreciation and amortisation of non-financial
assets 1,310
Other administrative expenses 10,342
Share based payments 121
Segment operating profit 3,902
Segment operating profit can be reconciled to
Group profit before tax as follows:
Finance income 4
Results from equity accounted associate 19
Other income 41
Total profit before tax 3,966
----------
The Group's revenues from external customers are divided into
the following geographical areas: -
Contamination
Human Healthcare Animal Healthcare Control Total 2018
GBP000 GBP000 GBP000 GBP000
United Kingdom 8,912 665 1,258 10,835
Germany 3,989 - 34 4,023
Rest of World 6,973 254 135 7,362
Total Revenues 19,874 919 1,427 22,220
---------------- ----------------- ------------- ----------
Contamination
Human Healthcare Animal Healthcare Control Total 2017
GBP000 GBP000 GBP000 GBP000
United Kingdom 8,910 636 1,129 10,675
Germany 3,048 62 150 3,260
Rest of World 6,149 180 9 6,338
Total Revenues 18,107 878 1,288 20,273
---------------- ----------------- ------------- ----------
4. TAXATION
The taxation charge represents:
2018 2017
GBP 000 GBP 000
Current taxation
Overseas tax 850 575
UK corporation tax 255 149
UK corporation tax adjustment to prior
periods (2) 12
-------- --------
1,103 736
Deferred taxation
Arising from origination and reversal of
temporary differences (369) (187)
-------- --------
Tax expense in the income statement 734 549
======== ========
The tax on profit before tax for the year is lower than the
standard rate of corporation tax in the UK (2017 - lower than the
standard rate of corporation tax in the UK) of 19% (2017 -
19.75%).
The differences are reconciled below:
2018 2017
GBP 000 GBP 000
Profit before tax 4,006 3,966
=============== ===============
Corporation tax at standard rate 761 783
Adjustment in respect of prior years (2) 12
Income not taxable - (8)
Expenses not deductible for tax purposes 24 58
Tax losses not utilised and other temporary
differences (32) (147)
Tax rate differences 115 5
Enhanced relief on qualifying scientific
research expenditure (132) (154)
--------------- ---------------
Total tax charge 734 549
=============== ===============
5. DIVIDENDS
Amounts recognised as distributions to
equity holders in the year:
2018 2017
GBP000 GBP000
Ordinary shares of 1p each
Final dividend for the year ended 30
June 2017 of 2.63p (2016:2.19p) per share 1,130 928
Interim dividend for the year ended 30
June 2018 of 1.60p (2017: 1.40p) per
share 688 594
Special dividend of 3p per share paid
on the 8 August 2016 - 1,265
------ ------
1,818 2,787
------ ------
Proposed final dividend for the year
ended 30 June 2018 of 2.98p (2017: 2.63p)
per share 1,287 1,115
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
number of shares:
2018 2017
GBP000 GBP000
Retained profit for the financial year
attributable to equity holders of the
parent 3,272 3,417
------ ------
Shares Shares
'000 '000
Number Number
Weighted average number of ordinary shares
for the purpose of basic earnings per
share 42,956 42,418
Share options 1,688 1,399
------ ------
44,644 43,817
------ ------
Earnings per ordinary share
Basic 7.62p 8.06p
Diluted 7.33p 7.80p
A total of 430,000 options of ordinary shares were anti-dilutive
at 30 June 2018 (260,000 at 30 June 2017.) Contingent options would
be dilutive but are excluded. The Group also presents an adjusted
basic earnings per share figure which excludes the share-based
payments charge:
2018 2017
GBP000 GBP000
Retained profit for the financial year
attributable to equity holders of the
parent 3,272 3,417
------ ------
Adjustments:
Share based payments 665 121
Net adjustments 665 121
Adjusted earnings 3,937 3,538
------ ------
Adjusted basic earnings per ordinary
share 9.16p 8.34p
------ ------
7. CALLED UP SHARE CAPITAL
Allotted, called up and fully paid shares
30 June 30 June 30 June 30 June
2018 2018 2017 2017
No. 000 GBP'000 No. 000 GBP'000
Ordinary of GBP0.01 each 43,192 432 42,749 427
========= ============ ============ =========
Number GBP'000
30 June 2017 42,749,417 427
Issued during the year 442,716 5
------------------ -------------
30 June 2018 43,192,133 432
================== =============
442,716 ordinary shares of 1 pence each, related to the exercise
of 442,716 share options issued during the year (2017: 584,216),
for a total consideration of GBP358,000, being GBP5,000 equity and
GBP353,000 share premium. The weighted average exercise price was
80.80 pence.
8. ANNUAL REPORT
The annual report and financial statements will be available on
the Company's website www.tristel.com from 17 October 2018. Printed
copies will be posted to shareholders prior to the Company's Annual
General Meeting taking place on 12 December 2018 in Snailwell,
Newmarket.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LFFLIILLRLIT
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