We've become used to seeing strong growth figures from infection control group, Tristel (TSTL), so these half-year results looked a little disappointing. But exclude a one-off £1m cost from its share-based payment scheme - which also diluted earnings per share - and the numbers feel more familiar. Excluding the effect, cash profits rose more than a quarter to £1.9m.
Tristel's sales growth has been driven by a strong performance overseas, where revenues grew 20 per cent at constant currencies to £2.9m, in contrast to only 2 per cent growth in the UK to £5.1m. New market regulations have added to UK costs, and the group is close to reaching market saturation in terms of potential clients.
That's no reason to suggest Tristel will slow down over the longer term. The group is undergoing regulatory assessment from the US Food and Drug Administration to sell its products there. The hope is the group's proprietary chlorine dioxide products for cleaning healthcare equipment will be the first of their kind to sell across the pond.
Slowing UK sales have caused analysts at finnCap to trim forecasts for the full year. They now expect adjusted EPS of 5.2p for the year to June 2016, down from 5.3p in FY2015.
| TRISTEL (TSTL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 125p | MARKET VALUE: | £53m | |
| TOUCH: | 123p-126p | 12-MONTH HIGH: | 151p | LOW: 67p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 33p* | NET CASH: | £4.3m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 7.41 | 1.03 | 1.91 | 0.59 |
| 2015** | 8.01 | 0.47 | 0.46 | 1.14 |
| % change | +8 | -55 | -76 | +95 |
Ex-div: 17 Mar Payment: 1 Apr *Includes intangible assets of £6.3m, or 15p a share **Interim to final dividend split now 40:60, from 25:75 | ||||
