Disinfecting hospitals in countries from Australia and New Zealand to Germany and Denmark is lucrative business, if Tristel’s (TSTL) half-year results are anything to go by. Double-digit revenue growth in all the group’s overseas subsidiaries (except China) offset a slowdown in the domestic market and helped widen pre-tax profit margins from 18 per cent to 19 per cent. Adjusted EPS rose 21 per cent as a result and investors can relax in the knowledge that it is business as usual at the high-flying Aim company.
The two underperforming subsidiaries – the UK and Hong Kong – are being dealt with. New launches in the domestic market are expected to help offset a fall in demand for the legacy products that don’t use Tristel’s proprietary chlorine dioxide technology and reverse the revenue fall experienced in the first half. As the group is nearing market penetration in the UK, growth here is expected to be slower than overseas, but second-half launches are expected to drag revenues up 3 per cent.
Meanwhile, sales in the Hong Kong division – which fell 35 per cent to £222,000 in these numbers – are being brought in house, which chief executive Paul Dixon thinks will help bring revenue here back up to £750,000. Broker finnCap has upped its 2019 pre-tax profit forecast to £5.1m to reflect the direct sales presence in Hong Kong but still expects profit of £4.2m, giving EPS of 8.2p in the year to June 2018 (from £4m and 8.1p in 2017).
| TRISTEL (TSTL) | ||||
| ORD PRICE: | 278p | MARKET VALUE: | £120m | |
| TOUCH: | 270-285p | 12-MONTH HIGH: | 323p | LOW: 150p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 39.2p* | NET CASH: | £4.9m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 9.7 | 1.7 | 3.30 | 1.40 |
| 2017 | 10.7 | 1.8 | 3.62 | 1.60 |
| % change | +10 | +9 | +10 | +14 |
| Ex-div: | 22 Mar | |||
| Payment: | 12 Apr | |||
| *Includes intangible assets of £6.8m, or 15.8p a share | ||||
