Interim Results

Tristel PLC 19 February 2007 TRISTEL plc INTERIM RESULTS Tristel plc ('Tristel'), the infection and contamination control business, today announces its interim results for the 26 weeks ended 31 December 2006. Results highlights â€¢ Turnover up 44% to Â£2.57m (2005: Â£1.79m) â€¢ Gross profit up 48% to Â£1.44m (2005: Â£0.97m) with the gross margin increasing to 56% from 54.4% â€¢ Operating profit up 31.5% to Â£0.403m (2005: Â£0.307m) â€¢ Pre-tax profit up 23.4% to Â£0.404m (2005: Â£0.327m) â€¢ Interim dividend of 0.35p net per share, a 27% increase â€¢ Basic EPS 1.19p (2005: 1.03p), a 15.5% increase â€¢ Balance sheet: Total net assets of Â£2.115m (31.12.2005: Â£1.745m) â€¢ Transfer of manufacture of all group products to a new production facility being established in Newmarket Commenting on current trading Paul Swinney, Chief Executive of Tristel, said: 'Our core business of supplying instrument sterilants (in solution and wipe form) to United Kingdom hospitals is steady, with much of the increase in first half turnover being contributed by Tristel Technologies, the company that we acquired in June 2006. The integration of Tristel Technologies is complete and the company is making good progress in expanding its activities of legionella control in hospitals and contamination control in the food growing and processing industries. Export sales continued to grow during the period. In acquiring Tristel Technologies we have manufactured products for the first time in our corporate history. With this experience, and in order to gain tighter control over our expanding intellectual property portfolio, we have taken the important strategic decision to assume the manufacture of Tristel Solutions' products from our contract manufacturer. The acquisition of these manufacturing rights will increase gross margins and earnings once our new production facility is fully operational, which we anticipate will be in May 2007.' For further information, please contact: Tristel plc Parkgreen Communications Ltd Paul Swinney, Chief Executive Paul McManus Paul Barnes, Finance Director Ben Knowles Tel: 01638 721 500 Tel: 020 7479 7933 Mob: 07980 541 893 http://www.tristel.com paul.mcmanus@parkgreenmedia.com Chairman's Statement We have made good progress during the first half of the 2006/2007 financial year. Our core healthcare business, Tristel Solutions, achieved an underlying increase in turnover of 9.2% to Â£1.951m, with export sales continuing to grow. Tristel Technologies, the legionella and contamination control business that we acquired in June 2006, achieved sales in the first half of Â£0.621m. Gross margins on the Group's products increased to 56% from 54.4%, reflecting our greater purchasing power as we sell higher volumes of recently introduced products, such as the ENT wipes system. We can look forward to further improvements in gross margin as we commence the in-house manufacture of all group products. When we acquired Tristel Technologies we became a manufacturer of chemical solutions for the first time in our corporate history. The blending and bottling of Tristel Solutions' sterilant products has always been outsourced. In order to give us greater protection over our intellectual property we have taken the decision to establish a manufacturing facility in Newmarket. The production activities in Bolton will be re-located to Newmarket and we are assuming the manufacture of the sterilant products from our prime contract manufacturer. The transfer of the manufacturing know-how and termination of the manufacturing agreement will cost Â£600,000. When the transfer is finally completed, Mr Tom Allsworth, owner of the Company's contract manufacturer, has agreed to subscribe for 606,060 ordinary shares of the Company at an issue price of 49.5p, the average daily share price over the period 2nd January 2007 to 14th February 2007. Taking on the manufacture of all group products will result in a significant increase in gross margins once the production facility has become fully operational in May. We expect the transaction to have a neutral impact on earnings in the current financial year and to enhance earnings in the 2007/2008 financial year. New products that have been launched in the first half - a range for general hospital surfaces and a suite of products that are bespoke for ultrasound departments in hospitals - are expected to contribute to the group's continued sales growth in the second half. ClearKlens Bi-Spore, the co-branded product that Johnson Diversey has launched for the pharmaceutical clean room market, is proceeding satisfactorily through various validation studies with major pharmaceutical manufacturers. The growth in first half turnover has not fed through to a commensurate increase in operating profits. This is due to a 56% increase in administrative costs, in large part reflecting the addition of personnel required for manufacture and supporting administrative activities. At the pre-tax level, profits increased by 23.4% to Â£404,269. Pre-tax profits of Â£327,481 in the corresponding first half of 2005/2006 had benefited from net interest income of Â£20,863 (first half 2006/2007: Â£1,170), reflecting cash balances arising from our flotation in June 2005. This cash was used to purchase Tristel Technologies in June 2006. Dividend We are declaring an interim dividend of 0.35p per share, an increase of 27% over the interim dividend declared last year, and in line with our progressive dividend policy. The dividend will be paid on 6 April 2007 to shareholders on the register at the close of business on 2 March 2007. Current trading Both of our operating subsidiaries, Tristel Solutions and Tristel Technologies, sell consumable products to a widespread customer base, located primarily at present in the United Kingdom. Tristel Solutions' focus is predominantly the hospital sector, whilst Tristel Technologies serves a broader range of sectors. We have yet to determine whether the Group will encounter a temporary downturn in National Health Service spending as was experienced towards the end of last year's NHS budgetary cycle. However, the Group's portfolio is better balanced than a year ago, in particular due to the acquisition of Tristel Technologies and its successful integration, and we would hope to be better insulated from such conditions if they materialise. We have a healthy pipeline of new, innovative products. Amongst these, we have great hopes for the Tristel sterilising tray which should be launched later this financial year. We acquired the technology rights to the tray design in August 2006 and have made a significant investment in developing it over the past nine months. The tray could re-define the way in which endoscopic instruments are decontaminated in many overseas markets. In summary, the first half result is very pleasing and we look forward to a successful second half of the year. Francisco A. Soler Chairman 19th February 2007 GROUP PROFIT & LOSS ACCOUNT For the 6 months ended 31 December 2006 6 months ended 31/12 6 months ended 31/ /06 12/05 (unaudited) (unaudited) Note Â£ Â£ Turnover 2,572,723 1,787,447 Cost of sales 1,132,405 814,080 Gross profit 1,440,318 973,367 Administrative costs 1,037,219 666,749 Other operating income - - Operating profit 403,099 306,618 403,099 306,618 Interest receivable and similar 3,204 20,863 income Interest payable and similar charges (2,034) - Profit on ordinary activities before 404,269 327,481 taxation Taxation 2 (121,281) ( 81,870) Profit on ordinary activities after 282,988 245,611 taxation Dividends (172,817) ( 65,551) Retained profit for the period 110,171 180,060 Earnings per share 4 Basic 1.19p 1.03p Diluted 1.19p 1.03p The group has no recognised gains or losses other than as shown above. GROUP BALANCE SHEET As at 31 December 2006 As at 31/12/06 As at 31/12/05 (unaudited) (unaudited) Note Â£ Â£ Fixed assets Intangible fixed assets 821,591 852,971 Goodwill 506,194 - Tangible fixed assets 625,342 123,769 1,953,127 976,740 Current assets Stocks 449,434 329,248 Debtors 1,045,900 604,623 Cash at bank and in hand 87,026 860,168 1,582,360 1,794,039 Creditors: Amounts falling due within one year 1,293,778 929,423 Net current assets 288,582 864,616 Total assets less current liabilities 2,241,709 1,841,356 Provisions for liabilities and charges (125,846) ( 96,456) Net assets 2,115,863 1,744,900 Capital and reserves Called up share capital 5 238,368 238,368 Share premium account 5 1,455,980 1,455,980 Merger reserve 5 478,526 478,526 Profit and loss account 5 (57,011) ( 427,974) Equity shareholders' funds 2,115,863 1,744,900 GROUP CASH FLOW STATEMENT For the 6 months ended 31 December 2006 6 months ended 6 months 31/12/06 ended 31/12/05 (unaudited) (unaudited) Note Â£ Â£ Net cash inflow/(outflow) from 1 484,885 (62,210) operating activities Interest paid (2,034) - Net cash from operating activities 482,851 (62,210) Cash flows from investing activities Purchase of intangible fixed assets (17,010) (80,236) Purchase of tangible fixed assets (148,199) (49,359) Sale of tangible fixed assets - 3,000 Acquisition of subsidiary 23,070 - Interest received 3,204 20,863 Net cash from investing activities (138,935) (105,732) Cash flows from financing acitivities Directors' loans repaid - (5,980) Equity dividends paid (172,817) (119,184) Net cash from financing activities (172,817) (125,164) Increase/(decrease) in cash and cash 171,099 (293,106) equivalents Cash and cash equivalents at (84,073) 1,153,274 beginning of period Cash and cash equivalents at end of 2 87,026 860,168 period NOTES TO THE GROUP CASH FLOW STATEMENT For the 6 months ended 31 December 2006 6 months 6 months ended 31/12/06 ended 31/12/05 (unaudited) (unaudited) Â£ Â£ 1. Reconciliation of operating profit to net cash inflow/(outflow) from operating activities Operating profit 403,099 306,618 Depreciation charges 94,525 75,737 Loss on disposal of fixed assets - 273 Increase in stocks (54,241) (118,693) Increase in debtors (114,594) (58,134) Increase/(decrease) in creditors 156,096 (268,011) Net cash inflow/(outflow) from operating 484,885 (62,210) activities 2. Cash and cash equivalents At 31/12/06 At 31/12/05 Â£ Â£ Net cash: Cash at bank and in hand 87,026 860,168 Total 87,026 860,168 NOTES TO THE INTERIM REPORT For the 6 months ended 31 December 2006 1. Basis of preparation The accounts of the Group for the 6 months ended 31 December 2006, which are unaudited, were approved by the Board on 15 February 2007. They have been prepared in accordance with the accounting policies set out in the Annual Report and Accounts for the year ended 30 June 2006. The results contained in this statement do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory accounts for the year ended 30 June 2006. Those accounts, upon which the auditors, Hedges Chandler, issued an unqualified audit opinion, have been delivered to the Registrar of Companies. The comparative unaudited 31 December 2005 results included herein have not been re-stated to reflect changes in the accounting policies set out in the Annual Report and Accounts for the year ended 30 June 2006. 2. Taxation Taxation for the 6 months ended 31 December 2006 is provided at 30% on profit on ordinary activities (31 December 2005 - 25%), being the anticipated rate of taxation for the period. 3. Reconciliation of movements in shareholders' funds 6 months ended 6 months 31/12/06 ended 31/12/05 (unaudited) (unaudited) Â£ Â£ Profit/(loss) for the financial period 282,988 245,611 Dividends (172,817) (65,551) 110,171 180,060 Net additions to shareholders' funds 110,171 180,060 Opening shareholders' funds 2,005,692 1,564,840 Closing shareholders' funds 2,115,863 1,744,900 Equity interests 2,115,863 1,744,900 4. Earnings per share 6 months ended 6 months ended 31/12/06 31/12/05 (unaudited) (audited) Â£ Â£ Profit for the financial period after taxation 282,988 245,611 Weighted average number of ordinary shares 23,836,820 23,836,820 for basic earnings per share Weighted average number of ordinary shares 23,836,820 23,836,820 for diluted earnings per share This information is provided by RNS The company news service from the London Stock Exchange

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