Infection control products supplier Tristel has sorted out its problems and has a good base from which to grow.
In the year to June 2013, revenues dipped from £10.9m to £10.6m but there was a sharp recovery in the second half. Growth in the core wipes businesses has offset most of the decline in endoscopy cleaning products revenues and the ending of contract manufacture. The endoscopy revenues fell from £2.98m to £1.25m, while £1.4m of contract manufacturing revenues were lost. Both animal health and contamination control revenues grew strongly from a low base. There was also strong growth in international revenues. A loss of £1.75m was reported after £2.23m of non-recurring costs which were mainly non-cash write-downs.
Net cash was £509,000 at the end of June 2013 and this could rise to £900,000 in a year’s time. The dividend has been cut from 0.62p a share to 0.4p a share. A recovery to 0.8p a share is forecast.
The Newmarket manufacturing facility has been increased from 22,000 square feet to 50,000 square feet.
A study has shown that Tristel Fuse, which is used to disinfect cystoscopes, is more cost effective than its rival Cidex OPA. The cost per procedure was $11.67, against $21.82 for Cidex and it also takes one-third of the time. This provides excellent marketing information for the product.
House broker finnCap forecasts a recovery in profit to £900,000 in the year to June 2014. Tax losses are running out so earnings per share will be lower. At 30.5p a share, Tristel is valued at £12.2m. The shares are trading on 17 times prospective 2013-14 earnings.
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