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International sales drive growth at Tristel

But investors have been disappointed by a lack of sales in the US
October 17, 2018

International expansion has helped keep revenues ticking up at Tristel (TSTL). The provider of specialist infection control products has almost saturated its domestic market, meaning UK revenues only rose 2 per cent in the year to June 2018, but strong demand in Germany, Poland and China – where the group owns its own distribution networks – dragged international sales up 19 per cent. For the first time, these overseas sales contributed more than half of the top line.

IC TIP: Buy at 259p

But reliance on international sales, especially those in Europe, should be viewed with a hint of caution. “Brexit looms”, says chief executive Paul Swinney, which means the group is expecting some disruption to its, normally very predictable, continental sales. The group is confident of obtaining regulatory approvals, but has warned its customers about possible disruption to the supply chain in 2019. 


Still, Europe may soon be overshadowed by the US where the group is in the process of launching its first suite of products – Duo – which gained approval from the Environmental Protection Agency earlier this year. Manufacture and marketing in the US are expected to begin in the year to June 2019, but only on a limited basis, while the group works towards its FDA approval which has fallen about six months behind schedule.

Broker FinnCap expects pre-tax profits and EPS of £5.2m and 9.8p, respectively, in the year to June 2019 (from £4.7m and 8.8p in 2018).

TRISTEL (TSTL)   
ORD PRICE:259pMARKET VALUE:£113m
TOUCH:255-262p12-MONTH HIGH / LOW:343p223p
DIVIDEND YIELD:2%PE RATIO:34
NET ASSET VALUE:42p*NET CASH:£6.7m
Year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201413.51.803.31.62
201515.31.805.42.72
201617.12.605.03.33
201720.33.978.14.03
201822.24.017.64.58
% change+10+1-5+14
Ex-div:15 Nov   
Payment:14 Dec   
*Includes intangible assets of £7m, or 15.9p a share