Hospital disinfection products supplier Tristel (LON: TSTL) had a relatively flat year to June 2022, but the current financial year has started well. Gaining FDA approval for DUO ULT in the US will help AIM-quoted Tristel to achieve its medium-term growth target.
Destocking and the winding down of discontinued products masks further underlying progress in the past year. The international spread of the business has helped to offset NHS destocking.
In the year to June 2022, turnover was flat at £31.1m, but discontinued products contributed £1.5m, down from £2.4m. Medical devices disinfection products revenues did improve, but customers stocked up on surface disinfection products two years ago and this position unwound more recently.
Underlying pre-tax profit fell from £5.4m to £4.5m. That excludes a £2.4m write-down. The underlying dividend was maintained at 6.55p a share, but there was also a special dividend of 3p a share. There could be a small increase in the underlying dividend this year.
Net cash was £8.9m at the end of June 2022 and it should be higher at the end of June 2022 despite the dividend payments.
Future
Tristel is targeting 10%-15% growth in revenues each year over the next three years. US FDA product approval will help with this growth, as will expanding the product range.
FDA approval for DUO ULT for ultrasound use is in progress and Tristel will respond to the latest request for information. DUO has been launched in the US through distributor Parker through a more limited EPA approval.
The first quarter has started strongly. finnCap forecasts a recovery in pre-tax profit to £6m this year without any significant contribution from the US. At 302.5p, the shares are trading on 28 times prospective earnings.