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Share Name Share Symbol Market Type Share ISIN Share Description
Tristel Plc LSE:TSTL London Ordinary Share GB00B07RVT99 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
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Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Health Care Equipment & Services 31.7 6.6 11.4 52.7 283

Tristel PLC Half-year Report

22/02/2021 7:00am

UK Regulatory (RNS & others)


Tristel (LSE:TSTL)
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From Dec 2020 to Jun 2021

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RNS Number : 8018P

Tristel PLC

22 February 2021

TRISTEL plc

("Tristel", the "Company" or the "Group")

Half-year Report

Unaudited Interim Results for the six months ended 31 December 2020

Tristel plc (AIM: TSTL), the manufacturer of infection prevention and contamination control products utilising proprietary chlorine dioxide chemistry, announces its interim results for the six months ended 31 December 2020.

Financial highlights

   --      Revenue up 15% to GBP16.8m (2019: GBP14.6m) 

-- Overseas sales up 20% to GBP10m (2019: GBP8.3m), representing 60% of total sales (2019: 56%)

   --      Gross margin increased to 80% from 79% in 2019 

-- PBT before share-based payments up 13% to GBP3.4m (2019: GBP3.0m). Unadjusted PBT of GBP3.1m (GBP2.8m)

-- EPS before share-based payments up 5% to 6.18p (2019: 5.89p). Unadjusted EPS of 5.62p (2019: 5.37p)

   --      EBITDA before share-based payments up 14% to GBP4.9m (2019: GBP4.3m) 
   --      EBITDA margin before share-based payments of 29% (2019: 29%) 
   --      Interim dividend of 2.62p per share (2019: 2.34p), up 12% 
   --      Cash of GBP7.3m (2019: GBP4.2m) 

Operational highlights

   --      Approval received for Duo range of products in India. Appointed national distributor 
   --      Successful start for new subsidiary in Malaysia with initial six-month sales of GBP0.24m 
   --      Board changes: Caroline Stephens (ex-J&J) joined as INED 
   --      Completed Usability and Human Factors Engineering Study for USA FDA De Novo submission 

Commenting on current trading, Paul Swinney, Chief Executive of Tristel, said : "We are pleased with our progress in the first half. Sales growth has been at the top end of our target range of 10-15% and margins have continued to improve.

"We continue to make good progress in our USA regulatory project. We have recently completed the Usability and Human Factors Engineering study which represents an important milestone on our path towards completing our De Novo submission.

"The second half will be the third consecutive six-month period to be impacted by the pandemic. Unlike the previous two halves, we have started this one in lockdown in many of our key markets. Sales of our medical device disinfectants during the first seven weeks of 2021 are lower than budget due to the impact of COVID-19 on patient examinations. We are very confident that by the end of calendar 2021, the ENT, gynaecology, urology, cardiology, and ophthalmology departments where our products are used will have returned to pre-pandemic levels of activity. Whether this will happen in the UK and Europe before our June year-end is unclear at present.

"However, the growth prospects for the Group are as strong as ever and we look to the future with confidence."

At 8am today, Monday 22 February 2021, a video presentation recorded by Paul Swinney, CEO and Liz Dixon, FD, will be made available here: www.tristelresults.com

 
Tristel plc                                                     www.tristel.com 
Paul Swinney, Chief Executive                                Tel: 01638 721 500 
Liz Dixon, Finance Director 
 
finnCap 
Geoff Nash/Giles Rolls, Corporate                            Tel: 020 7220 0500 
 Finance 
Alice Lane, Corporate Broking 
 
Walbrook PR Ltd                    Tel: 020 7933 8780 or tristel@walbrookpr.com 
Paul McManus                                                 Mob: 07980 541 893 
Lianne Cawthorne                                             Mob: 07584 391 303 
 

Chairman's statement

Results

I am pleased to report that the Group had a good first half, growing sales by 15%. We increased the proportion of Group revenue generated in overseas markets to 60%. Geographical diversification is especially important for the Group during this pandemic which is affecting countries differently at any point in time.

During the half we entered the Malaysian hospital market via a newly established subsidiary. A distributor has represented us in the country for the past decade. Our operation got off to a good start, obtaining the re-issue of governmental licences for our products and generating GBP0.24m in sales. On 23 December, our Indian subsidiary entered into a distribution agreement with GenWorksHealth, based in Bangalore. This gives us distribution throughout India for our Duo high-level disinfectants which are used on a wide range of medical devices used in ultrasound, ophthalmology, and ear nose and throat clinics.

Of equal strategic importance is the diversification of our product portfolios. The most important product range in terms of sales is Tristel. This is our longest established and best recognised brand. Tristel products are medical device disinfectants and worldwide they accounted for GBP13.1m of sales in the half. The Cache product range is younger and only actively marketed at present in the UK, Benelux, France, and Hong Kong. The Cache products are disinfectants for hospital surfaces and worldwide accounted for GBP2m of sales in the period.

The two portfolios have been differently impacted by the pandemic: Tristel product sales in all countries have been adversely affected as patient examinations have been deferred. Cache product sales have been positively impacted because hospitals rushed to purchase any type of disinfectant. During the second half of 2020 this phenomenon came to an end and now we are observing a more considered approach to the selection of surface disinfectants. This augurs well for the long-term success of Cache as our chlorine dioxide chemistry is the safest and most effective choice available. Worldwide, Tristel sales in the first half increased by 12% on the comparable period, whilst Cache sales increased by 82%. The table below explains the geographical and portfolio breakdown of Group first half revenue.

 
 Revenue                                   First half 2020-21   First half   Period-on-period 
                                                                 2019-20      growth 
                                           GBPm                 GBPm         % 
                                          -------------------  -----------  ----------------- 
 UK Revenue 
                                          -------------------  -----------  ----------------- 
 UK portfolio breakdown: 
                                          -------------------  -----------  ----------------- 
 Tristel medical device decontamination    4.4                  4.4          - 
                                          -------------------  -----------  ----------------- 
 Cache surface disinfection                1.5                  0.8          88% 
                                          -------------------  -----------  ----------------- 
 Other                                     0.9                  1.1          (18%) 
                                          -------------------  -----------  ----------------- 
 UK Revenue                                6.8                  6.3          8% 
                                          -------------------  -----------  ----------------- 
 Overseas Revenue                          10                   8.3          20% 
                                          -------------------  -----------  ----------------- 
 Geographical breakdown: 
                                          -------------------  -----------  ----------------- 
 Australasia                               1.9                  1.7          12% 
                                          -------------------  -----------  ----------------- 
 China, Hong Kong & Taiwan                 0.8                  0.6          33% 
                                          -------------------  -----------  ----------------- 
 Malaysia                                  0.2                  -            - 
                                          -------------------  -----------  ----------------- 
 Benelux & France                          2.4                  1.8          33% 
                                          -------------------  -----------  ----------------- 
 Germany & Central Europe                  2.8                  2.5          12% 
                                          -------------------  -----------  ----------------- 
 Italy                                     0.4                  0.3          33% 
                                          -------------------  -----------  ----------------- 
 International distributors                1.5                  1.4          7% 
                                          -------------------  -----------  ----------------- 
 Overseas Revenue                          10                   8.3          20% 
                                          -------------------  -----------  ----------------- 
 Portfolio breakdown: 
                                          -------------------  -----------  ----------------- 
 Tristel medical device decontamination    8.7                  7.3          19% 
                                          -------------------  -----------  ----------------- 
 Cache surface disinfection                0.5                  0.3          67% 
                                          -------------------  -----------  ----------------- 
 Other                                     0.8                  0.7          14% 
                                          -------------------  -----------  ----------------- 
                                           10                   8.3          20% 
                                          -------------------  -----------  ----------------- 
 Global Revenue                            16.8                 14.6         15% 
                                          -------------------  -----------  ----------------- 
 

The UK's departure from the European Union has taken place without disruption to our trade with the Continent. In preparation for this transition, last September the NHS purchased approximately GBP0.9m of Tristel medical device disinfectant products and has held them in a dedicated storage facility. We anticipate that this stock will be fed back into the NHS Supply Chain network from May 2021 but have no visibility on the time this might take. The release of this inventory will have some negative impact on second half sales of medical device disinfectant products in the UK.

The release of this stock and the uncertain timing regarding recovery of patient examinations to pre-pandemic levels around the world, makes it difficult to forecast sales for the second half of the year.

We achieved a one percentage point increase in gross margin due to product sales mix in the period. Overheads excluding share-based payments, depreciation and amortisation increased by GBP1.2m, or 16%. Included in the increase is a one-off payroll-related cost associated with share option exercises, and the first contribution of costs from Malaysia. Excluding both these costs, underlying overhead expenses increased by only 3% in the half compared with last year.

During the period we increased global headcount by 31, from 164 at 30 June, to 195 at 31 December. We have bolstered our marketing, product management, product development, quality management and regulatory teams to prepare for the growth that we anticipate once hospital patient examinations return to their pre-pandemic levels in all countries, and the Cache product range is marketed globally. Included in the headcount increase are five employees in our newly operational Malaysian subsidiary.

Pre-tax profit increased from GBP2.8m to GBP3.1m, a 11% increase.

The Group has continued to be highly cash generative and on 31 December 2020 the cash balance was GBP7.3m (2019: GBP4.2m).

Earnings and Dividends

Adjusted earnings per share (EPS), before share-based payments, were 6.18 pence, up 5% from 5.89 pence last year. Basic EPS was 5.62 pence, a 5% increase from last year. EPS growth was held back by a higher effective tax rate in the half of 16% (2019: 13%).

The Board is recommending an interim dividend of 2.62 pence (2019: 2.34 pence), an increase of 12%. The interim dividend will be paid on 30 April 2021 to shareholders on the register on 9 April 2021, with an ex-dividend date of 8 April 2021.

Board of Directors

We welcome Caroline Stephens to our Board as an Independent Non-Executive Director. Caroline has enjoyed a 26-year career with Johnson & Johnson in multiple leadership roles. In addition to bringing her experience and expertise in healthcare to our organisation, her appointment takes us further towards our goal of equal gender balance within the Board.

Outlook

Whilst the near-term outlook for the Company will be heavily influenced by the course of the pandemic and its impact on hospital services, the long-term prospects remain very encouraging.

Bruno Holthof

Chairman

22 February 2021

Condensed Consolidated Income Statement for the six months ended 31 December 2020

 
                                              6 months ended  6 months ended  Year ended 
                                                   31-Dec-20       31-Dec-19   30-Jun-20 
                                                 (unaudited)     (unaudited)   (audited) 
                                        Note         GBP'000         GBP'000     GBP'000 
Revenue                                  2            16,751          14,634      31,678 
Cost of sales                                        (3,421)         (3,030)     (6,431) 
                                              --------------  --------------  ---------- 
Gross profit                                          13,330          11,604      25,247 
Admin expenses - share based payments                  (260)           (234)       (435) 
Admin expenses - depreciation and 
 amortisation                                        (1,402)         (1,239)     (2,558) 
Admin expenses - other                               (8,472)         (7,298)    (15,449) 
                                              --------------  --------------  ---------- 
Total administrative expenses                       (10,134)         (8,771)    (18,442) 
Operating profit                                       3,196           2,833       6,805 
Finance income                                             -               -           1 
Finance costs                                          (100)            (72)       (167) 
                                              --------------  --------------  ---------- 
Profit before taxation                                 3,096           2,761       6,639 
Taxation                                               (501)           (366)     (1,539) 
 
Profit for the period                                  2,595           2,395       5,100 
                                              ==============  ==============  ========== 
Attributable to: 
Equity holders of the parent                           2,595           2,395       5,100 
                                              --------------  --------------  ---------- 
                                                       2,595           2,395       5,100 
                                              ==============  ==============  ========== 
Earnings per share from continuing 
 operations 
attributable to equity holders of 
 the parent 
Basic (pence)                            4              5.62            5.37       11.38 
                                              ==============  ==============  ========== 
Diluted (pence)                                         5.47            5.17       10.88 
                                              ==============  ==============  ========== 
 

The above results were derived from continuing operations.

Earnings before interest, tax depreciation and amortisation for the period ended 31 December 2020 were GBP4,858,000. (Period ended 31 December 2019 GBP4,306,000. Year ended 30 June 20 GBP9,964,000).

Condensed Consolidated Statement of Comprehensive Income for the six months ended 31 December 2020

 
                                       6 months ended  6 months ended  Year ended 
                                            31-Dec-20       31-Dec-19   30-Jun-20 
                                          (unaudited)     (unaudited)   (audited) 
                                              GBP'000         GBP'000     GBP'000 
Profit for the period                           2,595           2,395       5,100 
Items that will be reclassified 
 subsequently to Profit and loss 
Exchange differences on translation 
 of foreign operations                           (30)           (304)         314 
                                       --------------  --------------  ---------- 
Other comprehensive income for the 
 period                                          (30)           (304)         314 
 
Total comprehensive income for the 
 period                                         2,565           2,091       5,414 
                                       ==============  ==============  ========== 
Attributable to: 
Equity holders of the parent                    2,565           2,091       5,414 
                                       --------------  --------------  ---------- 
                                                2,565           2,091       5,414 
                                       ==============  ==============  ========== 
 

Condensed Consolidated Statement of Financial Position as at 31 December 2020

 
                                         6 months ended  6 months ended  Year ended 
                                              31-Dec-20       31-Dec-19   30-Jun-20 
                                            (unaudited)     (unaudited)   (audited) 
                                                GBP'000         GBP'000     GBP'000 
Non-current assets 
Investment                                          807             807         807 
Goodwill and other Intangible assets             12,770          13,190      13,250 
Property, plant and equipment                     8,603           5,934       8,080 
Deferred tax asset                                  852             997       1,544 
                                         --------------  --------------  ---------- 
                                                 23,032          20,928      23,681 
                                         --------------  --------------  ---------- 
Current assets 
Inventories                                       3,993           2,664       4,619 
Trade and other receivables                       5,888           4,819       6,422 
Cash and cash equivalents                         7,307           4,169       6,212 
                                         --------------  --------------  ---------- 
                                                 17,188          11,652      17,253 
                                         --------------  --------------  ---------- 
Total assets                                     40,220          32,580      40,934 
                                         ==============  ==============  ========== 
Capital and reserves 
Called up share capital                             465             447         453 
Share premium account                            12,891          11,735      12,634 
Merger reserve                                    2,205           2,205       2,205 
Foreign exchange reserves                           367           (221)         397 
Retained earnings                                13,150          10,066      12,767 
                                         --------------  --------------  ---------- 
Equity attributable to equity holders 
 of parent                                       29,078          24,232      28,456 
Minority interest                                     7               7           7 
 
Total equity                                     29,085          24,239      28,463 
                                         ==============  ==============  ========== 
Current liabilities 
Trade and other liabilities                       3,688           2,614       4,560 
Contingent liability                                 76             112         112 
Current tax liabilities                             688             968       1,182 
Current leased asset liabilities                    870               -         817 
                                         --------------  --------------  ---------- 
Total current liabilities                         5,322           3,694       6,671 
                                         ==============  ==============  ========== 
Non-current liabilities 
Deferred tax                                        612             747         615 
Non-current leased asset liabilities              5,201           3,900       5,185 
                                         --------------  --------------  ---------- 
Total liabilities                                11,135           8,341      12,471 
                                         --------------  --------------  ---------- 
Total equity and liabilities                     40,220          32,580      40,934 
                                         ==============  ==============  ========== 
 

Condensed Consolidated Statement of Changes in Equity for the six months ended 31 December 2020

 
                      Share        Share      Merger    Foreign   Retained         Total  Non-controlling        Total 
                    Capital      Premium     reserve   exchange   earnings  attributable        interests       Equity 
                                                        reserve                to owners 
                                                                                  of the 
                                                                                  parent 
                    GBP'000      GBP'000     GBP'000    GBP'000    GBP'000       GBP'000          GBP'000      GBP'000 
30 June 2019            446       11,427       2,205         83      9,191        23,352                7       23,359 
Transactions 
with owners 
Dividends paid                                                     (1,562)       (1,562)                       (1,562) 
Shares issued             1          308                                             309                           309 
Share-based 
 payments                                                              234           234                           234 
Adoption of 
 IFRS 16                                                             (192)         (192)                         (192) 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Total 
 transactions 
 with owners              1          308                           (1,520)       (1,211)                       (1,211) 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Profit for the 
 period ended 
 31 
 December 2019                                                       2,395         2,395                         2,395 
Other 
comprehensive 
income :- 
Exchange 
 differences 
 on 
 translation 
 of foreign 
 operations                                               (304)                    (304)                         (304) 
Total 
 comprehensive 
 income                                                   (304)      2,395         2,091                         2,091 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
31 December 
 2019                   447       11,735       2,205      (221)     10,066        24,232                7       24,239 
                ===========  ===========  ==========  =========  =========  ============  ===============  =========== 
Transactions 
with owners 
Dividends paid                                                     (1,059)       (1,059)                       (1,059) 
Shares issued             6          899                                             905                           905 
Share-based 
 payments                                                              201           201                           201 
Adoption of 
 IFRS 16                                                              (50)          (50)                          (50) 
Deferred tax 
 through 
 equity                                                                904           904                           904 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Total 
 transactions 
 with owners              6          899                               (4)           901                           901 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Profit for the 
 period ended 
 30 
 June 2020                                                           2,705         2,705                         2,705 
Other 
comprehensive 
income :- 
Exchange 
 differences 
 on 
 translation 
 of foreign 
 operations                                                 618                      618                           618 
Total 
 comprehensive 
 income                                                     618      2,705         3,323                         3,323 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
30 June 2020            453       12,634       2,205        397     12,767        28,456                7       28,463 
                ===========  ===========  ==========  =========  =========  ============  ===============  =========== 
Transactions 
with owners 
Dividends paid                                                     (1,785)       (1,785)                       (1,785) 
Shares issued            12          257                                             269                           269 
Share-based 
 payments                                                              260           260                           260 
Deferred tax 
 through 
 equity                                                              (686)         (686)                         (686) 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Total 
 transactions 
 with owners             12          257                           (2,211)       (1,942)                       (1,942) 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Condensed Consolidated Statement of Changes in Equity for the 
six 
months ended 31 December 2020 (continued) 
                      Share        Share      Merger    Foreign   Retained         Total  Non-controlling        Total 
                    Capital      Premium     reserve   exchange   earnings  attributable        interests       Equity 
                                                        reserve                to owners 
                                                                                  of the 
                                                                                  parent 
                    GBP'000      GBP'000     GBP'000    GBP'000    GBP'000       GBP'000          GBP'000      GBP'000 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
Total 
 transactions 
 with owners 
 brought 
 forward                 12          257                           (2,211)       (1,942)                       (1,942) 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
 
Profit for the 
 period ended 
 31 
 December 2020                                                       2,594         2,594                         2,594 
Other 
comprehensive 
income :- 
Exchange 
 differences 
 on 
 translation 
 of foreign 
 operations                                                (30)                     (30)                          (30) 
Total 
 comprehensive 
 income                                                    (30)      2,594         2,564                         2,564 
                -----------  -----------  ----------  ---------  ---------  ------------  ---------------  ----------- 
31 December 
 2020                   465       12,891       2,205        367     13,150        29,078                7       29,085 
                ===========  ===========  ==========  =========  =========  ============  ===============  =========== 
 

Condensed Consolidated Statement of Cash Flows for the six months ended 31 December 2020

 
                                                    6 months ended  6 months ended   Year ended 
                                                       31-Dec-2020     31-Dec-2019  30-Jun-2020 
                                                       (unaudited)     (unaudited)    (audited) 
                                             Note          GBP'000         GBP'000      GBP'000 
Cash flows from operating activities 
Profit before tax                                            3,096           2,761        6,639 
Adjustments to cash flows from non-cash 
 items 
Depreciation of leased assets                                  346             326          692 
Depreciation of plant, property & 
 equipment                                                     309             348          598 
Amortisation of intangible asset                               714             858        1,201 
Impairment of intangible asset                                  33              33           67 
Gain on fair value of investment                                 -           (111)        (111) 
Share based payments - IFRS 2                                  260             234          435 
(Profit)/loss on disposal of property, 
 plant and equipment                                           (3)               -           54 
Lease interest                                                  99              66          165 
Unrealised loss in foreign exchange                             55           (140)        (157) 
Finance income                                                   -               -          (1) 
                                                    --------------  --------------  ----------- 
                                                             4,909           4,375        9,582 
Working capital adjustments 
Decrease/(increase) in inventories                             626             288      (1,655) 
Decrease/(increase) in trade and other 
 receivables                                                   534             330        (805) 
(Decrease)/increase in trade and other 
 payables                                                    (872)           (693)        1,007 
Corporation tax paid                                         (989)           (477)      (1,140) 
                                                    --------------  --------------  ----------- 
Net cash flow from operating activities                      4,208           3,823        6,989 
                                                    --------------  --------------  ----------- 
Cash flows from investing activities 
Interest received                                                -               -            1 
Purchase of intangible assets                                (341)           (325)        (610) 
Purchase of subsidiary undertakings 
 & deferred consideration                                     (36)           (594)        (595) 
Purchase of property plant and equipment                     (730)         (1,111)      (1,770) 
                                                    --------------  --------------  ----------- 
Net cash used in investing activities                      (1,107)         (2,030)      (2,974) 
                                                    --------------  --------------  ----------- 
Cash flows from financing activities 
Payment of lease liabilities                                 (435)           (397)        (614) 
Share issues                                                   269             309        1,214 
Dividends paid                                             (1,785)         (1,562)      (2,621) 
                                                    --------------  --------------  ----------- 
Net cash used in financing activities                      (1,951)         (1,650)      (2,021) 
                                                    --------------  --------------  ----------- 
Net increase/(decrease) in cash and 
 cash equivalents                                            1,150             143        1,994 
Cash and cash equivalents at the beginning 
 of the period                                               6,212           4,170        4,170 
Exchange differences on cash and cash 
 equivalents                                                  (55)           (144)           48 
                                                    --------------  --------------  ----------- 
Cash and cash equivalents at the end 
 of the period                                               7,307           4,169        6,212 
                                                    ==============  ==============  =========== 
 
 
 

Notes to the Financial Statements for the six months ended 31 December 2020

 
1  Accounting policies 
 

Basis of Preparation

For the year ended 30 June 2020, the Group prepared consolidated financial statements under International Financial Reporting Standards ('IFRS') as adopted by the European Union (EU). These condensed consolidated interim financial statements (the interim financial statements) have been prepared under the historical cost convention. They are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) which are effective from 1 July 2020.

Standards effective from 1 January 2020

The following standards and interpretations apply for the first time to financial reporting periods commencing on or after 1 January 2020:

   --      IFRS 3 - Definition of a Business (effective 1 January 2020) 
   --      IAS 1 and 8 - Definition of Material (effective 1 January 2020) 
   --      IFRS 9, IAS 39 and IFRS 7 - Interest rate benchmark reform (effective 1 January 2020) 
   --      IFRS 17 Insurance contracts (effective 1 January 2021) 
   --      IAS 1 - Classification of liabilities as current or non-current (effective 1 January 2022) 

The Directors anticipate that the adoption of IFRS 17 in future periods will have no material effect on the financial statements of the Group.

There are no other standards that are not yet effective and that would be expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

None of the standards, interpretations and amendments effective for the first time from 1 July 2020 have had a material effect on the financial statements.

Accounting Policies

The interim report is unaudited and has been prepared on the basis of IFRS accounting policies.

The accounting policies adopted in the preparation of this unaudited interim financial report are consistent with the most recent annual financial statements being those for the year ended 30 June 2020.

The financial information for the six months ended 31 December 2020 and 31 December 2019 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006.

The financial information relating to the year ended 30 June 2020 does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. This information is based on the Group's statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards ("IFRS") and received an unqualified audit report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These financial statements have been filed with the Registrar of Companies.

 
2  Segmental Analysis 
 

Management considers the Company's revenue lines to be split into three operating segments, which span the different Group entities. The operating segments consider the nature of the product sold, the nature of production, the class of customer and the method of distribution. The Company's operating segments are identified initially from the information which is reported to the chief operating decision maker.

The first segment concerns the manufacture and sale of medical device decontamination products which are used primarily for infection control in hospitals. This segment generates approximately 78% of Company revenues (2019: 80%).

The second segment which constitutes 12% (2019: 8%) of the business activity, relates to the manufacture and sale of hospital environmental surface disinfection products.

The third segment addresses the pharmaceutical and personal care product manufacturing industries, veterinary and animal welfare sectors and has generated 10% (2019: 12%) of the Company's revenues this year.

The operation is monitored and measured on the basis of the key performance indicators of each segment, these being revenue and gross profit, and strategic decisions are made on the basis of revenue and gross profit generating from each segment.

The Company's centrally incurred administrative expenses and operating income, and assets and liabilities, cannot be allocated to individual segments.

 
 
                        6 Months ended                           6 Months ended                                            Year ended 
                       31 December 2020                         31 December 2019                                          30 June 2020 
                          (unaudited)                              (unaudited)                                              (audited) 
                   Hospital       Hospital                                          Hospital                           Hospital       Hospital 
                    medical  environmental                           Hospital  environmental                            medical  environmental 
                     device        surface    Other            medical device        surface    Other                    device        surface    Other 
            decontamination   disinfection  revenue    Total  decontamination   disinfection  revenue    Total  decontamination   disinfection  revenue    Total 
                     GBP000         GBP000   GBP000   GBP000           GBP000         GBP000   GBP000   GBP000           GBP000         GBP000   GBP000   GBP000 
Revenue              13,107          2,036    1,608   16,751           11,700          1,100    1,834   14,634           23,497          4,882    3,299   31,678 
Cost of 
 material           (2,035)          (754)    (633)  (3,421)          (1,909)          (406)    (715)  (3,030)          (4,499)        (1,132)    (800)  (6,431) 
 
Gross 
 profit              11,072          1,282      975   13,330            9,791            694    1,119   11,604           18,998          3,750    2,499   25,247 
 
 
  Centrally incurred income and expenses 
  not attributable to individual segments: 
Depreciation and amortisation of 
 non-financial 
 assets                                              (1,402)                                  (1,239)                                                    (2,558) 
Other administrative expenses                        (8,472)                                  (7,298)                                                   (15,449) 
Share-based payments                                   (260)                                    (234)                                                      (435) 
                                            ----------------                                  -------                                           ---------------- 
Segment operating profit                               3,196                                    2,833                                                      6,805 
Segment operating profit can be reconciled 
 to Group profit before tax as follows: 
Segment operating profit                               3,196                                    2,833                                                      6,805 
Finance income                                             -                                        -                                                          1 
Finance costs                                          (100)                                     (72)                                                      (167) 
                                            ----------------                                  -------                                           ---------------- 
Group profit                                           3,096                                    2,761                                                      6,639 
                                            ================                                  =======                                           ================ 
 
 
 
 
                                 6 Months ended                                    6 Months ended                                  Year ended 
                                31 December 2020                                  31 December 2019                                30 June 2020 
                                  (unaudited)                                       (unaudited)                                    (audited) 
                       Hospital       Hospital                                          Hospital                           Hospital       Hospital 
                        medical  environmental                           Hospital  environmental                            medical  environmental 
                         device        surface     Other           medical device        surface     Other                   device        surface     Other 
                decontamination   disinfection  revenues   Total  decontamination   disinfection  revenues   Total  decontamination   disinfection  revenues   Total 
                         GBP000         GBP000    GBP000  GBP000           GBP000         GBP000    GBP000  GBP000           GBP000         GBP000    GBP000  GBP000 
UK & Europe 
 direct                   9,395          1,830     1,194  12,419            8,530            953     1,416  10,899           16,768          3,891     2,528  23,187 
APAC region 
 direct                   2,527            131       215   2,873            2,116             67       188   2,371            4,613            231       374   5,218 
Worldwide 
 distributors             1,185             75       199   1,459            1,054             80       230   1,364            2,116            760       397   3,273 
                ---------------  -------------  --------  ------  ---------------  -------------  --------  ------  ---------------  -------------  --------  ------ 
                         13,107          2,036     1,608  16,751           11,700          1,100     1,834  14,634           23,497          4,882     3,299  31,678 
                ===============  =============  ========  ======  ===============  =============  ========  ======  ===============  =============  ========  ====== 
 
 
 
3  Dividends 
 

Amounts recognised as distributions to equity holders in the year:

 
                                             6 months ended  6 months ended    Year ended 
                                                31 December     31 December  30 June 2020 
                                                       2020            2019 
                                                (unaudited)     (unaudited)     (audited) 
                                                     GBP000          GBP000        GBP000 
Ordinary shares of 1p each 
Final dividend for the year ended 30 
 June 2020 of 3.84p (2019:3.50p) per share 
 **                                                   1,785           1,562         1,562 
Interim dividend for the year ended 30 
 June 2020 of 2.34p (2019: 2.04p) per 
 share                                                    -               -         1,059 
                                             --------------  --------------  ------------ 
                                                      1,785           1,562         2,621 
                                             ==============  ==============  ============ 
Proposed interim dividend for the year 
 ended 30 June 2021 of 2.62p (2020: 2.34p) 
 per share                                            1,211           1,046             - 
                                             ==============  ==============  ============ 
 

** Based on shares in issue at 14 December 2020 of 46,493,808 (14 December 2019 of 44,635,823).

The proposed interim dividend has not been included as a liability in the financial statements.

 
4  Earnings per share 
 

The calculations of earnings per share are based on the following profits and number of shares:

 
                                             6 months ended  6 months ended    Year ended 
                                                31 December     31 December  30 June 2020 
                                                       2020            2019 
                                                (unaudited)     (unaudited)     (audited) 
                                                     GBP000          GBP000        GBP000 
Retained profit for the financial year 
 attributable to equity holders of the 
 parent                                               2,595           2,395         5,100 
                                             --------------  --------------  ------------ 
                                                     Shares          Shares        Shares 
                                                       '000            '000          '000 
                                                     Number          Number        Number 
Weighted average number of ordinary shares 
 for the purpose of basic earnings per 
 share                                               46,203          44,604        44,831 
Share options                                         1,246           1,762         2,033 
                                             --------------  --------------  ------------ 
                                                     47,449          46,366        46,864 
                                             --------------  --------------  ------------ 
Earnings per ordinary share 
Basic (pence)                                         5.62p           5.37p        11.38p 
Diluted (pence)                                       5.47p           5.17p        10.88p 
                                                    GBP'000         GBP'000       GBP'000 
Retained profit for the financial year 
 attributable to equity holders of the 
 parent                                               2,595           2,395         5,100 
                                             --------------  --------------  ------------ 
Adjustments: 
Share based payments                                    260             234           435 
                                             --------------  --------------  ------------ 
Net adjustments                                         260             234           435 
Adjusted earnings                                     2,855           2,629         5,535 
                                             --------------  --------------  ------------ 
Adjusted basic earnings per ordinary 
 share (pence)                                        6.18p           5.89p        12.35p 
                                             --------------  --------------  ------------ 
 

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February 22, 2021 02:00 ET (07:00 GMT)

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