Disappointing first-half numbers from infection control specialist Tristel (TSTL) feel like a distant memory after a considerably stronger performance in the second half. Turnover sneaked beyond market expectations, and after stripping out share-based payments of £674,000, pre-tax profit rose 27 per cent to £3.3m, pushing EPS up a fifth to 6.62p.
UK sales growth remained fairly slow at 5 per cent, with management arguing Tristel's products are now so widely used the market is nearly fully saturated. But the global contamination control market presents considerable opportunities, with a supportive study published earlier this year in an important industry journal. Overseas revenue was up by over a fifth in the reported period and now represents 39 per cent of sales.
After setting up more operating subsidiaries outside of the UK, direct overseas sales (as opposed to sales made via distributors) leapt 30 per cent to £4.1m and all overseas operations are now profitable. This is expected to be further enhanced in the 2017 financial year following the group's acquisition of its Australian distributor in August. Expansion into North America is "gently, sensibly moving forward", according to chief executive Paul Swinney, with initial US sales expected by FY2018.
Broker finnCap expects adjusted pre-tax profit of £3.6m in the year to June 2017, giving EPS of 6.6p (from £3.3m and 6.3p in FY2016).
TRISTEL (TSTL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 163p | MARKET VALUE: | £69m | |
| TOUCH: | 159-167p | 12-MONTH HIGH: | 165p | LOW: 87p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 35p* | NET CASH: | £5.7m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 10.9 | 0.6 | 1.8 | 0.62 |
| 2013 | 10.6 | -1.8 | -3.2 | 0.40 |
| 2014 | 13.5 | 1.8 | 3.3 | 1.62 |
| 2015 | 15.3 | 1.8 | 5.4 | 2.72** |
| 2016 | 17.1 | 2.6 | 5.0 | 3.33** |
| % change | +12 | +2 | -8 | +22 |
Ex-div: 17 Nov Payment: 16 Dec *Includes intangible assets of £6m, or 14p a share **Excludes special dividends of 3p, paid in August 2015 and 2016 | ||||
