News blog
Tristel
- BY: Andrew Hore |
- POSTED: 29/10/2007 |
Contamination control products supplier Tristel reported full year figures in line with expectations.
Adjusted profits, excluding amortisation and share option costs, were 49% higher at £1.25m in the year to June 2007. Turnover rose 37% to £5.15m and gross margins improved to 62.3%. The profit figure doesn’t include an exceptional charge of £349,000 to end an informal distribution arrangement in the endoscopy market. The uncertainty about the arrangement may have held back revenues late in the period but there should be a positive effect in the longer-term.
The final dividend of 1p a share makes the total for the year 1.35p a share – an increase of 35%.
This year Tristel will benefit from bringing manufacturing in-house. It cost just over £1m to buy back the manufacturing rights and invest in production equipment. This will boost margins and give greater control over existing products and the launch of new ones. Tristel continues to launch new products and by the end of next year will be selling a washing machine designed to use Tristel disinfectants to clean endoscopes used on the ear, nose and throat. This machine is much more costly than Tristel’s consumables – it is likely to sell at around £10,000 - but it should produce a similar gross margin.
The shares have drifted back in recent months like so many small companies. There doesn’t appear to be any reason specific to Tristel, though. New house broker Daniel Stewart forecasts a rise in adjusted profits from £1.17m to £1.35m. These figures are struck after amortisation unlike the adjusted figure quoted by Tristel.
At 46.5p, that puts the shares on a prospective multiple of 12. That looks a comfortably achievable forecast at this stage. A forecast dividend of 1.7p a share for this year means that the prospective yield is 3.7%.
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