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TRISTEL PLC
Earnings Release • Oct 21, 2024
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 8586I
Tristel PLC
21 October 2024
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Tristel plc
("Tristel", the "Company" or the "Group")
Audited Preliminary Results
for the year ended 30 June 2024
Record revenues, 38.5% growth in pre-tax profits and strong cash generation
Tristel plc (AIM: TSTL), the manufacturer of infection prevention products for hospitals, announces its audited preliminary results for the year ended 30 June 2024, with trading ahead of both market expectations and internal performance targets. The Company has delivered record revenues, growth in pre-tax profits and maintained strong cash generation from the operations. It continues to be debt free and at the end of year cash and short-term investments balances were £11.8m including £5.7m held as short-term investments.
The Company's core business is the sale to hospitals of its proprietary chlorine dioxide chemistry for the decontamination of medical devices under the Tristel brand (87% of total sales), and for the sporicidal disinfection of environmental surfaces under the Cache brand (8% of total sales).
Financial Highlights
| ● | Turnover up 16% to £41.9m (2023: £36.0m) |
| ● | Gross margin up 2% to 80% (2023 restated: 78%) |
| ● | Adjusted pre-tax profit* up 32% to £8.2m (2023: £6.2m) |
| ● | Reported pre-tax profit up 39% to £7.1m (2023: £5.1m) |
| ● | Adjusted EPS* up 50% to 15.34p (2023: 10.67p). Basic EPS of 13.68p (2023: 9.44p) |
| ● | Dividend per share for the full year up 29% to 13.52p (2023: 10.50p) |
| ● | Cash and short-term investment balance of £11.8m (2023: £9.5m), with continued strong operating cashflow of £10.9m in the year (2023: £8.4m) |
* before share-based payments
Operational Highlights
| ● | First manufacture and sale of Tristel ULT into the United States ultrasound market |
| ● | Approval of Tristel ULT by Health Canada and submission of Tristel OPH to US FDA (post period end) |
| ● | Cache TANK and POD approved for UKCA, MDR & CE certification |
| ● | Successful CEO transition |
Matt Sassone, Chief Executive of Tristel plc, said: " I am delighted to take on the role as Chief Executive of Tristel and at a stage when we can build on our growing and well-established global footprint for our products and technology. It is clear from my first weeks in the role that we have in place the foundations for further success: we have a hugely talented team, we have differentiated and innovative products that are already well established as market-leading, and we have a host of exciting commercial opportunities to deliver further growth. It is no wonder that as a Board we remain very confident about the outlook for the Company."
CEO video & investor presentations
Please find a link to a video overview relating to the Company's preliminary results from the Group's Chief Executive Officer, Matt Sassone here - https://stream.brrmedia.co.uk/broadcast/670fc1052bd2bbc93fcd920b
Matt Sassone, CEO, and Liz Dixon, CFO, will present the Company's results via the Investor Meet Company platform today at 11:30 BST. The presentation will also be available for playback after the event. Investors can sign up to Investor Meet Company for free and add to meet Tristel plc via: https://www.investormeetcompany.com/tristel-plc/register-investor
An in-person presentation will take place at 16:30 BST, which is open to all existing and potential shareholders. T he Company will welcome investors to 85 Gresham Street, London, EC2V 7NQ from 16.15 for a 16.30 start and will be followed by refreshments. If you would like to attend, please contact Walbrook PR on 020 7933 8780 or email [email protected] .
The results presentation is available on the Company's website: https://tristelgroup.com/
For further information please contact:
| Tristel plc | Via Walbrook PR |
| Matt Sassone, Chief Executive Officer | www.investors.tristel.com |
| Liz Dixon, Chief Financial Officer | |
| Walbrook PR Ltd | Tel: 020 7933 8780 or [email protected] |
| Paul McManus / Alice Woodings | Mob: 07980 541 893 / 0 7407 804 654 |
| Cavendish Capital Markets Ltd | Tel: 020 7220 0500 |
| Geoff Nash / Camilla Hume / Trisyia Jamaludin (Corporate Finance) | |
| Sunila de Silva (ECM) / Louise Talbot (Sales) |
About Tristel plc
Tristel plc is a global infection prevention company focussed on the manufacture and supply of products using its unique proprietary chlorine dioxide (ClO2) chemistry. The Company is a market leader in manual decontamination of medical devices, supplying hospitals under the Tristel brand, and under the Cache brand provides products for sporicidal surface disinfection, a more sustainable alternative to commonly used pre-wetted plastic wipes.
Tristel's head office and manufacturing facility is located in Snailwell, near Cambridge, and operates globally employing approximately 250 people across 17 active subsidiaries selling into 40 countries. The business is profitable, with no debt, and has a progressive dividend policy.
The Company has been listed on the London Stock Exchange's AIM market since 2005 (AIM: TSTL).
For more information about Tristel's product range please visit: https://tristel.com
Chairman's Statement
Chairman's Statement
The 2024 financial year ("FY 24") has been a record year for Tristel in terms of financial performance, with trading ahead of market expectations and our own performance targets. We delivered record revenues, growth in pre-tax profits and maintained strong cash generation from the operations. We continue to be debt free and at the end of year cash and short-term investment balances were £11.8m.
FY 24 also saw us execute against our geographic expansion plans following the significant milestone of FDA clearance for Tristel ULT, our high-level disinfectant ("HLD") for use on endocavity ultrasound probes and skin surface transducers at the end of the previous financial year. In FY 24 we registered our first sales in the US and we continue to work with our partners to increase our market share across North America.
2024 was also a pivotal year in Tristel's history as we position the business for our next stage of growth. After 31 years at the helm, and having built a world-class business, Paul Swinney founder and CEO retired and we welcomed Matt Sassone as his successor.
With over 27 years of experience in the medical device industry, Matt brings a wealth of knowledge and a proven track record of leadership in many markets including North America. His vision and expertise will be instrumental in guiding Tristel through its next phase of growth.
My Board colleagues and I extend our thanks to Paul, who has led the company with remarkable vision and dedication for over three decades. Under his leadership, Tristel has grown from a pioneering start-up to a globally recognized leader in infection prevention, driving innovation by capitalising upon the Company's unique chlorine dioxide chemistry. Paul leaves a legacy of success as shown in this set of results.
Group Strategy
The Group continues to focus on the global hospital market, using its proprietary chlorine dioxide chemistry for two applications: the decontamination of the medical devices under the Tristel brand, and the disinfection of environmental surfaces under the Cache brand.
Our ambition is to become the global market leader in the manual decontamination of heat sensitive non-lumened diagnostic medical devices. In Europe, the Middle East and APAC we already hold this position, and during the year we started to build commercial momentum in North America, following the receipt of De Novo clearance for our hand-held HLD, Tristel ULT, from the United States Food and Drug Administration (FDA). This was a significant milestone for a British company of our size.
During the year, 39% of Group revenue was generated in the United Kingdom and 61% in the rest of the world. Throughout the 61 countries in which we actively market our products, Tristel medical device disinfectant revenue, which is driven by the number of diagnostic procedures in which our products are used, increased to £36.3m from £30.8m in the previous year.
Our second product range, Cache, made slower progress during the year. Revenue was £3.4m compared to £3.3m in the previous year. As announced in February, the Company gained Medical Devices Regulation 2002 ("UK MDR") and the European Union Medical Device Regulation 2017/745 ("EU MDR") approval of its TANK ClO₂ Sporicidal Disinfectant system. These newest additions to the Cache range, which provides sporicidal surface disinfection in a format which is a sustainable alternative to commonly used pre-wetted plastic wipes, and our continued success in gaining regulatory approvals in key markets, give us confidence that the Cache range will deliver significant sales growth going forward.
Investing in Growth
We are committed to ensuring that our business is fully primed for growth, both in the UK and across our international subsidiaries. As we expand our global reach, we continue to invest in our people and strengthen our systems to support both our commercial and operational functions. Over the past year we have grown our headcount by 6%, enhancing our sales, marketing and technical teams to meet the demands of our highly regulated industry.
In parallel, we are driving a comprehensive digital transformation across the organization, ensuring that our systems and processes are optimised for the future. Our continued investment in IT and cybersecurity infrastructure is crucial to maintaining the resilience of the business as it grows. By expanding these capabilities, we are positioning Tristel to seize new opportunities, scale efficiently, and sustain our leadership in infection prevention.
New product development is a key focus for the Board and we continued to invest during the year in three areas:
| ● | The 3T platform which is our app-based Train, Trace and Test tool that enables a user of a Tristel medical device high-level disinfectant to record all steps of the decontamination process. |
| ● | AI capabilities incorporated into the app that enable objective verification that the key steps in the decontamination process have been performed correctly. |
| ● | Colour change technology- visual indicators that provide compliance training tools for the user and which can be incorporated into the decontamination process to ensure key steps in the decontamination process are performed correctly. |
We made six patent applications during the year and three applications went to grant. During the year we invested £0.9m in product development and £0.5m in securing and maintaining intellectual property protection.
North America
In June 2023 we reached a significant milestone by securing FDA clearance for Tristel ULT, our ultrasound HLD. In the first half of FY 2024, our partner Parker Laboratories Inc. began manufacturing and commercialising the product in North America. In the second half, Parker's distribution network had stocked up on inventory, and in the final quarter, we started onboarding an increasing number of users.
Tristel ULT is complementary to Parker labs' market leading Aquasonic gel, in that for every invasive ultrasound procedure the gel must be used and an HLD must be used. Parker is a well-qualified manufacturing partner, for Tristel ULT, providing the highest quality standards in its FDA approved New Jersey facility, and also selling our product through its existing nationwide distribution channels. To support our partnership, Parker has expanded its own direct sales team from two people to 10. Whilst Parker have encountered more purchasing bureaucracy than we originally anticipated, which has slightly extended the timeline for some adopters to come on board, momentum is growing as we make headway in the world's largest market.
Parker has also showcased our products at various conferences across North America. Culminating in the publication in May of a white paper "Simplifying High-Level Disinfection for Urological Procedures: A Case Study" at the American Urological Association 2024 conference, the largest gathering of urologists in the world. In the paper, US urologist, Dr Matthew Allaway, highlights Tristel ULT in a case study, commenting on the product's ability to enable faster, simpler endo-cavitary probe processing for busy urology practices.
The white paper can be seen here:
https://www.parkerlabs.com/wp-content/uploads/2024/04/AllawayWhitePaper_8_LOCKED.pdf
In January 2024, we gained Health Canada approval for Tristel ULT, further extending our reach.
Our people
It's clear that our people are Tristel's greatest asset. Without their dedication, skill, and expertise, none of the successes we have achieved would have been possible. We recognise this and are committed to being the best employer we can be, ensuring that Tristel is a place where talent can thrive and grow.
Their collective efforts have not only elevated our reputation but have also positioned us for even greater success.
Results
Total revenues increased 16% to £41.9m for the year (2023: £36.0m). Our gross profit margin increased by 2%. Overheads (excluding share-based payments, depreciation, amortisation and impairment) rose by 19%, principally due to the increase in average headcount to 238 (2023 212). Increases in wages and salaries for the Group were £2.2m.
Adjusted pre-tax profit (before share-based payments of £1.1m) rose 32% from £6.2m to £8.2m. Statutory pre-tax profit increased to £7.1m from £5.1m and the statutory margin rose to 17% from 14%. Charges associated with share-based payments have been included as adjusting items. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses from adjusted profit measures to better understand the long-term performance of the underlying business.
Earnings per share (EPS) (adjusted for the add-back of the share-based payment charge) was 15.34 pence (2023: 10.67 pence). Basic EPS was 13.68 pence (2023: 9.44 pence) and diluted EPS was 13.54 pence (2023: 9.34 pence).
Balance Sheet, Cash and Dividend
The Group has continued to be highly cash generative at an operating cash flow level during the year and the balance sheet is debt free (with the exception of lease liabilities). The combined cash and short-term deposit balance at 30 June 2024 was £11.8m (2023: £9.5m), with £5.7m classed as short term investment (2023: £2.4m).
The Board is recommending a final dividend of 8.28 pence (2023: 7.88 pence). Combined with the interim dividend of 5.24 pence, the total dividend pay-out for the year will be 13.52 pence per share, this is an increase of 29% on last year's total dividend pay-out of 10.50 pence. Going forward the Board's intention is to increase the dividend annually in line with the year's increase in EPS, committing to minimum dividend growth of 5%. This final dividend will be paid on 20 December 2024, to shareholders on the register on 29 November 2024, the associated ex-dividend date is 28 November 2024.
Outlook
Our results clearly reflect our dominant market leadership position. Demand for our infection prevention products remains robust across all of our geographical markets, and with our recently established foothold in North America, we believe we can continue to deliver sustainable growth.
Dr Bruno Holthof
Non-Executive Chair
Chief Executive's Report
Overview
I am delighted to have joined Tristel. Having admired the business from afar, I now have the privilege of being part of a team that continues to deliver exceptional results, as reflected in our strong performance across all product categories this year. Tristel's success is built on the solid foundation established by my predecessor, Paul Swinney, and my focus will be on building upon that legacy.
We will continue to seize global opportunities, particularly with our core medical device disinfection products, and expand our footprint in key markets like North America. At the same time, we remain committed to delivering on our strategic intent to enter the surface disinfection market, where we see significant potential for our proprietary chlorine dioxide chemistry to disrupt this much larger sector.
The year ended 30 June 2024 marked another period of robust growth for the Group, with notable progress in our key strategic initiatives. These included the expansion of our medical device portfolio into critical new markets like the USA and advancing our goal to penetrate the surface disinfection market.
In the USA, our partner Parker Laboratories began manufacturing and commercialising Tristel ULT during the year, gaining significant traction with several hospitals onboarded in the final quarter. They have built a strong pipeline of opportunities but acknowledge that the more stringent post-COVID purchasing bureaucracy is extending the sales process longer than initially anticipated.
Additionally, we successfully completed the UK MDR and EU MDR certifications for our TANK ClO₂ Sporicidal Disinfectant system. This sustainable alternative to pre-wetted plastic wipes, launched at the end of the fiscal year, is expected to drive accelerated growth in Cache sales across Europe and other regions that recognize these high regulatory standards.
Financial targets
The Board and I remain committed to our financial plan for the three years to 30 June 2025, which was a continuation of the plan for the prior three-year period ending in June 2022. The three key financial targets of both the old and new plans are:
| i) | sales growth in the range of 10% to 15% per annum as an annual average over the three years; |
| ii) | the achievement in each year of an EBITDA margin (excluding share-based payment charge) of at least 25%, and |
| iii) | to increase profit before tax (excluding share-based payments) year-on-year, independently of the other two targets. |
Having joined the business just a few weeks ago, I ask for a little time to work closely with stakeholders to review the company's strategic direction. This process will ensure that we are well-positioned for the next phase of our growth journey. I look forward to updating investors on our financial targets beyond June 2025, as we define our goals to align with the growing opportunities in our core markets and new areas of expansion.
| Financial year | Revenue £m |
Annual revenue growth | Average 3 year revenue growth | Adjusted EBITDA margin % | Increase in profit before tax (excluding SBP charge) |
| Ended 30.06.21 (base year) | 31.00 | ||||
| Ended 30.06.22 | 31.10 | 0.3% | 0% | 24.0% | No |
| Ended 30.06.23 | 36.00 | 16% | 8% | 24.9% | Yes |
| Ended 30.06.24 | 41.90 | 16% | 11.7% | 26.0% | Yes |
Our marketplace and technology
Our business is entirely dedicated to preventing the spread of microbes from one person or object to another. This is critical as the spread of the cross contamination of microbes are responsible for infections in healthcare, leading to illness, death, and imposing a heavy burden on both individuals and society. We fulfil this mission by developing products based on chlorine dioxide, a powerful disinfectant that we've uniquely formulated.
Hospitals, where infection risks are the highest, are where our solutions have the most impact. Infection prevention is a fundamental necessity for the safe and effective delivery of healthcare worldwide. Over 98% of our revenue comes from consumable products that perform essential, non-discretionary functions in these settings.
Our strategy revolves around our proprietary chlorine dioxide chemistry, applied in two key areas. First, we focus on the high-level disinfection of medical devices under the Tristel brand, which accounted for 87% of our continuing product revenues this year. Second, we address the disinfection of hospital surfaces through our Cache brand, representing 8% of revenues. In this area, we distinguish between the sporicidal efficacy of our chlorine dioxide chemistry and the lower-level performance claims of most competing disinfectants. Our aim is to lead the global market in this high-performance, sporicidal segment.
Tristel stands out in two key ways. We are the only provider of chlorine dioxide-based high-level disinfectants that are both validated and regulated for use with semi-critical medical devices. Moreover, our disinfectants are applied manually, unlike our semi-automated competitors that rely on a process of manually cleaning followed by a machine that applies UV-C light or a hydrogen peroxide mist.
While surface disinfection is a universal need in hospitals, with expenditures on it far exceeding those for medical device decontamination, it's the ability to kill bacterial spores that sets the top biocides apart. Chlorine dioxide, as one of the few chemistries capable of this, is a cornerstone of our offering.
The manual application of our products makes them ideally suited for departments handling small, heat-sensitive medical instruments. Whether it's nasendoscopes in ENT departments, laryngoscope blades in emergency settings, cardiac echo probes for heart disease diagnosis, or ultrasound probes in women's and men's health, Tristel provides the simplest, fastest, and most cost-effective high-performance disinfection. As a result, in the markets where we've established ourselves, we hold substantial market share.
Revenue
We segment our business to reflect our corporate strategy and geographical spread. We have developed distinctly different brands for the two product categories: Tristel for medical device disinfection and Cache for sporicidal surface disinfection. Our strategic intention is to develop the Tristel and Cache brands and product portfolios with a significant degree of independence from each other, but both anchored upon our chlorine dioxide technology platform and using the same sales teams in all countries.
Higher sales volume accounted for £2.2m of the £5.9m revenue growth and price increases accounted for the remaining £3.7m. This represents an average price increase of 11%, driven primarily by the UK where the increase has been higher because of supply agreements which require fixed pricing extending into future years.
Tristel medical device sales grew by 18%, reaching £36.4m. Reinforcing our ability to continually grow on our market leadership position.
During the year, the revenue split across these product categories was:
| £m | Brand | Revenue 2023-24 |
% of total | Revenue 2022-23 |
% of total |
| Medical device decontamination in hospitals | Tristel | 36.40 | 87% | 30.80 | 86% |
| Environmental surface disinfection in hospitals | Cache | 3.40 | 8% | 3.30 | 9% |
| Other - non-core | Various | 2.10 | 5% | 1.90 | 5% |
| Group | 41.90 | 100% | 36.00 | 100% |
Revenue by channel
We sell our products directly to end-users in those markets in which we have established a subsidiary, and through distributors in markets where we have no corporate presence. During the year, the revenue split by sales channel was:
| 2023-24 Revenue | 2022-23 Revenue | Year-on-Year change | % change | |
| Hospital medical device decontamination: | ||||
| UK | 16.20 | 11.90 | 4.30 | 36% |
| Australia | 3.40 | 3.50 | (0.10) | (3%) |
| Germany | 5.50 | 5.00 | 0.50 | 9% |
| Western Europe | 7.40 | 6.60 | 1.2 | 12% |
| Other ROW | 3.90 | 3.80 | 0.10 | 3% |
| Tristel Global | 36.40 | 30.80 | 5.60 | 18% |
| Hospital environmental surface disinfection: | ||||
| UK | 2.40 | 2.40 | Nil | Nil |
| Australia | 0.10 | 0.10 | Nil | Nil |
| Germany | 0.10 | 0.10 | Nil | Nil |
| Western Europe | 0.20 | 0.20 | Nil | Nil |
| Other ROW | 0.60 | 0.50 | 0.10 | (20%) |
| Cache Global | 3.40 | 3.30 | 0.10 | (3%) |
| Other revenue: various brands | 2.10 | 1.90 | 0.20 | 11% |
| Group | 41.90 | 36.00 | 5.90 | 16% |
Revenue by geography
Strong sales in the UK saw the sales percentage increase to 39% of total revenues. The below table shows the 5 year history of this metric.
| 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 | |
| Revenue split % | |||||
| UK | 40% | 37% | 35% | 35% | 39% |
| Overseas | 60% | 63% | 65% | 65% | 61% |
| Annual revenue growth % | |||||
| UK | 7% | -10% | -3% | 12% | 31% |
| Overseas | 32% | 3% | 2% | 18% | 9% |
*Sales made to international distributors are included within overseas in the above table to align with the location of the end customer. As these sales originate within the UK subsidiary, for segmental reporting purposes they are included within the UK.
We have 16 subsidiaries selling directly into the hospital marketplace in the United Kingdom, Belgium, the Netherlands, France, Italy, Germany, Switzerland, Poland, Hong Kong, China, Malaysia, Singapore, Australia, and New Zealand, India and United States. We have subsidiaries in Japan, Spain and Ireland which are not yet active in terms of selling. We closed our Russian subsidiary early in FY22.
During the year, in another 45 countries, we sold products through national distributors.
Geographic expansion is a key growth driver for the business, our regulatory programme succeeded in attaining 26 approvals for 17 products in seven countries during the year. Including the approval for Tristel ULT from Health Canada.
Our Strategic Assets
We consider the assets that enable the Group to achieve its strategic goals to be:
Our chlorine dioxide chemistry
There are three critically important elements that account for the unique positioning of our chlorine dioxide chemistry:
1. The proprietary formulation,
2. Our focus over two decades on exploring the potential for chlorine dioxide in the decontamination of medical instruments. There is another application for chlorine dioxide chemistry which all other businesses have concentrated upon which is water treatment. From the inception of our business in the 1990's we looked in a different direction - towards medical device disinfection - a direction which others have not followed, and this has given us the pioneer's advantage,
3. The length of time that we have enjoyed this pioneer position has allowed us to collate a significant body of knowledge, including published scientific data, the testimony of almost two decades of safe use, a significant global footprint of regulatory approvals and a library of proven compatibility with hundreds of medical instruments, all of which would take a new entrant significant time and cost to match.
Intellectual property protection
On 30 June 2024, we held 149 patents granted in 32 countries providing legal protection for our products.
In its broadest sense, our intellectual property relates to:
1. Patents, trademarks and registered designs,
2. The scientific validation of our chemistry and our products that have entered the public domain, via a number of peer-reviewed and published papers,
3. The certification by medical device manufacturers that our chemistry is compatible with their products. We enjoy official compatibility with the instrumentation of 56 medical device manufacturer, with respect to 1,449 of their individual models.
Our people possess an unrivalled body of knowledge relating both to infection prevention and to chlorine dioxide, and they are a key asset for the future of our business. Their domain knowledge relates to the manufacture of chlorine dioxide-based products and their development. The Company's R&D investment focusses exclusively on our proprietary technology, searching for improvements in microbial efficacy, reductions in hazards, and greater efficiency in manufacture. In parallel, we invest in the creation of packaging and delivery forms that enhance and simplify the delivery of the chemistry and the user experience.
Outlook
This year has been all about delivering on the solid foundations that have been put in place across the business to support growth.
The main driver of our growth has been our Tristel branded products for medical device disinfection, which have benefitted from a continued rise in sales volumes, but also from increased pricing, primarily from the UK due to an increase in longer term fixed price supply agreements. We expect to see further growth across all of our markets in FY 25, and we are particularly focussed on making the most of the significant opportunity that last year's FDA approval for Tristel ULT presents : access to the largest healthcare market in the world. This also gives us the opportunity to leverage the significance of an FDA approval in countries that look to the USA regulator for their own practice, such as countries across Central and South America. We also expect to see future growth from the successful execution of our North American strategy for Tristel OPH, with sales already building up in Canada, and FDA 510(k) clearance targeted for the end of this calendar year.
On the surfaces side, we believe that following UK MDR and EU MDR certifications for our TANK ClO₂ Sporicidal Disinfectant system, we will be able to accelerate growth in Cache sales across Europe and other regions that recognised these high regulatory standards. Sales of these products, for environmental surface disinfection in hospitals, are starting from a low-base, but we believe our offering, that provides the highest level of surface disinfection whilst eliminating the need for the single-use throw-away plastic wipes, will be both commercially and environmentally attractive.
I am delighted to take on the role as Chief Executive of Tristel and at a stage when we can build on our growing and well-established global footprint for our products and technology. It is clear from my first weeks in the role that we have in place the foundations for further success: we have a hugely talented team, we have differentiated and innovative products that are already well established as market-leading, and we have a host of exciting commercial opportunities to deliver further growth. It is no wonder that as a Board we remain very confident about the outlook for the Company.
Matt Sassone
Chief Executive Officer
Tristel Plc
Consolidated Income Statement for the Year Ended 30 June 2024
| 2024 £ 000 |
(As restated) 2023 £ 000 |
|||
| Revenue | 41,933 | 36,009 | ||
| Cost of sales excluding depreciation | (7,974) | (7,661) | ||
| Depreciation included within Cost of sales | (381) | (430) | ||
| Total Cost of sales | (8,355) | (8,091) | ||
| Gross profit | 33,578 | 27,918 | ||
| Distribution costs | (327) | (323) | ||
| Administrative expenses: | ||||
| Share based payments | (1,089) | (1,061) | ||
| Depreciation, amortisation and impairments | (2,392) | (2,188) | ||
| Other | (22,788) | (19,069) | ||
| Total Administrative expenses | (26,269) | (22,318) | ||
| Other operating income | - | 4 | ||
| Operating profit | 6,982 | 5,281 | ||
| Finance income | 318 | 10 | ||
| Finance costs | (218) | (179) | ||
| Net finance income/(cost) | 100 | (169) | ||
| Profit before tax | 7,082 | 5,112 | ||
| Income tax expense | (593) | (651) | ||
| Profit for the year | 6,489 | 4,461 | ||
| Profit attributable to : | ||||
| Earnings per share from total and continuing operations attributable to equity holders of the parent | ||||
| 2024 | 2023 | |||
| Basic - pence | 6 | 13.68 | 9.44 | |
| Diluted - pence | 6 | 13.54 | 9.34 |
The above results were derived from continuing operations.
The prior year has been restated to align to IAS 2 in relation to classification of expenditure included in cost of sales, the restatement has no effect on the Profit for the year and is fully disclosed in Note 8
Tristel Plc
Consolidated Statement of Comprehensive Income for the Year Ended 30 June 2024
| 2024 £ 000 |
2023 £ 000 |
|
| Profit for the year | 6,489 | 4,461 |
| Items that may be reclassified subsequently to profit or loss | ||
| Foreign currency translation losses | (368) | (216) |
| Total comprehensive income for the year | 6,121 | 4,245 |
| Total comprehensive income attributable to: | ||
| Owners of the company | 6,121 | 4,245 |
Tristel Plc
(Registration number: 04728199)
Consolidated Statement of Financial Position as at 30 June 2024
| 30 June 2024 £ 000 |
30 June 2023 £ 000 |
||
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 3,364 | 2,922 | |
| Right of use assets | 5,538 | 4,905 | |
| Goodwill | 4,997 | 5,156 | |
| Intangible assets | 4,885 | 4,757 | |
| Deferred tax assets | 613 | 1,286 | |
| 19,397 | 19,026 | ||
| Current assets | |||
| Inventories | 4,681 | 4,569 | |
| Trade and other receivables | 7,524 | 7,081 | |
| Income tax asset | 718 | 1,146 | |
| Short-term investments | 5,650 | 2,432 | |
| Cash and cash equivalents | 6,139 | 7,113 | |
| 24,712 | 22,341 | ||
| Total assets | 44,109 | 41,367 | |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 476 | 474 | |
| Share premium | 14,933 | 14,188 | |
| Foreign currency translation reserve | (647) | (279) | |
| Merger reserve | 2,205 | 2,205 | |
| Retained earnings | 15,443 | 14,089 | |
| Equity attributable to owners of the company | 32,410 | 30,677 | |
| Non-controlling interests | - | 7 | |
| Total equity | 32,410 | 30,684 | |
| Non-current liabilities | |||
| Other non-current financial liabilities | 4,830 | 4,321 | |
| Deferred tax liabilities | 277 | 599 | |
| 5,107 | 4,920 |
| Current liabilities | |||
| Trade and other payables | 5,482 | 4,801 | |
| Income tax liability | 76 | 103 | |
| Other current financial liabilities | 1,034 | 859 | |
| 6,592 | 5,763 | ||
| Total liabilities | 11,699 | 10,683 | |
| Total equity and liabilities | 44,109 | 41,367 |
Tristel Plc
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2024
| Share capital £ 000 |
Share premium £ 000 |
Foreign currency translation reserve £ 000 |
Other reserves £ 000 |
Retained earnings £ 000 |
Total £ 000 |
Non-controlling interests £ 000 |
Total equity £ 000 |
|
| At 1 July 2023 | 474 | 14,188 | (279) | 2,205 | 14,089 | 30,677 | 7 | 30,684 |
| Profit for the year | 6,489 | 6,489 | 6,489 | |||||
| Exchange difference on translation of foreign operations | (368) | (368) | (368) | |||||
| Total comprehensive income | - | - | (368) | - | 6,489 | 6,121 | - | 6,121 |
| Dividends | (6,224) | (6,224) | (6,224) | |||||
| New share capital subscribed | 2 | 745 | 747 | 747 | ||||
| Share based payment transactions | 1,089 | 1,089 | 1,089 | |||||
| Dissolution of non-controlling interest | (7) | (7) | ||||||
| At 30 June 2024 | 476 | 14,933 | (647) | 2,205 | 15,443 | 32,410 | - | 32,410 |
| Share capital £ 000 |
Share premium £ 000 |
Foreign currency translation reserve £ 000 |
Other reserves £ 000 |
Retained earnings £ 000 |
Total £ 000 |
Non-controlling interests £ 000 |
Total equity £ 000 |
|
| At 1 July 2022 | 473 | 13,996 | (64) | 2,205 | 13,089 | 29,699 | 7 | 29,706 |
| Profit for the year | 4,450 | 4,450 | 4,450 | |||||
| Exchange difference on translation of foreign operations | (215) | (215) | (215) | |||||
| Total comprehensive income | - | - | (215) | - | 4,450 | 4,235 | - | 4,235 |
| Dividends | (4,511) | (4,511) | (4,511) | |||||
| New share capital subscribed | 1 | 192 | 193 | 193 | ||||
| Share based payment transactions | 1,061 | 1,061 | 1,061 | |||||
| At 30 June 2023 | 474 | 14,188 | (279) | 2,205 | 14,089 | 30,677 | 7 | 30,684 |
Tristel Plc
Consolidated Statement of Cash Flows for the Year Ended 30 June 2024
| 2024 £ 000 |
2023 £ 000 |
||
| Cash flows from operating activities | |||
| Profit before tax for the year | 7,082 | 5,112 | |
| 7,082 | 5,112 | ||
| Adjustments to cash flows from non-cash items | |||
| Depreciation of leased assets | 1,064 | 1,000 | |
| Depreciation of plant, property and equipment | 691 | 734 | |
| Impairment of goodwill | 67 | 68 | |
| Amortisation of intangible assets | 951 | 816 | |
| Share based payment transactions | 1,089 | 1,061 | |
| (Profit)/Loss on disposal of property, plant and equipment | (8) | 69 | |
| Lease interest | 218 | 177 | |
| Other interest | - | 2 | |
| Finance income | (318) | (10) | |
| 10,836 | 9,029 | ||
| Working capital adjustments | |||
| Increase in inventories | (112) | (149) | |
| Increase in trade and other receivables | (280) | (1,230) | |
| Increase in trade and other payables | 500 | 1,330 | |
| Lease interest paid | (218) | (177) | |
| Tax | 153 | (313) | |
| Net cash flow from operating activities | 10,879 | 8,490 | |
| Cash flows from investing activities | |||
| Interest received | 318 | 10 | |
| Acquisition of intangible assets | (1,044) | (1,570) | |
| Acquisitions of property plant and equipment | (1,138) | (853) | |
| Cash deposit to short-term investments | (3,218) | (2,432) | |
| Net cash flows from investing activities | (5,082) | (4,845) | |
| Cash flows from financing activities | |||
| Payment of lease liabilities | (1,022) | (1,126) | |
| Share issues | 676 | 193 | |
| Dividends paid | (6,224) | (4,511) | |
| Net cash flows from financing activities | (6,570) | (5,444) | |
| Net decrease in cash and cash equivalents | (766) | (1,799) | |
| Cash and cash equivalents at 1 July | 7,113 | 8,883 | |
| Effect of exchange rate fluctuations on cash held | (208) | 29 | |
| Cash and cash equivalents at 30 June | 6,139 | 7,113 |
Tristel Plc
| 1 | Accounting policies |
Basis of accounting
This financial information has been prepared in accordance with UK adopted international accounting standards and in accordance with the provisions of the Companies Act 2006.
Tristel plc, the Group's ultimate parent company, is a public limited company incorporated and domiciled in the United Kingdom.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 June 2024. Subsidiaries are entities over which the Group has rights or is exposed to variable returns from its involvement with the investee and has the power to affect those returns by controlling the financial and operating policies so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights or IP held.
Unrealised gains on transactions between the Group and its subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the acquisition method. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. These fair values are also used as the basis for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of the aggregate of the consideration transferred and the amount of non-controlling interest over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition.
Non-controlling interests, presented as part of equity, represent a proportion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the assets of the parent and the non-controlling interests based on their respective ownership interests.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group 'controls' an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Interests in subsidiaries are accounted for at cost less accumulated impairment losses.
Audit exemption
The Directors confirm that in accordance with sections 479A and 479C of the Companies Act 2006, Tristel Plc, as parent company of the below entities, has given a parental guarantee to enable those companies to claim exemption from audit. This guarantee relates to the year ended 30 June 2024. The members of these companies have agreed to the exemption from the audit by virtue of the guarantee given by Tristel Plc, for year ended 30 June 2024.
• Tristel International Limited - Registered number 07874262
• Scorcher Idea Limited - Registered number 04602679
• Tristel Solutions Limited - Registered number 03518312
Changes in accounting policy
New standards, interpretations and amendments effective
The following accounting standards and amendments were endorsed by the UK endorsement board in the year ended 30 June 2024
• IAS 12 Pillar 2
• IFRS 17 Insurance contracts
They did not have a material effect on the Group
New standards, interpretations and amendments not yet effective
The following newly issued but not yet effective standards, interpretations and amendments, which have not been applied in these financial statements, will only have a presentational effect on the financial statements in future:
IFRS 18 Presentation and Disclosure in Financial Statements
Will bring new presentation requirements related to the statement of profit or loss, including three new categories for items of income and expense - operating, financing, investing.
2. Publication non-statutory accounts
The financial information set out above does not constitute the company's statutory accounts for the years ended 30 June 2024 or 2023 but is derived from those accounts. Statutory accounts for 2023 have been delivered to the registrar of companies, and those for 2024 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The Board of Tristel plc approved the release of this Preliminary Announcement on 18 October 2024.
| 3 | Segmental Analysis |
Group revenue lines are split into fourteen geographic regions, which span the different Group entities. In accordance with IFRS 8, aggregation criteria has been applied to five operating segments where similar economic characteristics are shared. The directors consider the operating segments to have similar economic characteristics as they have similar operating margins, and the nature of products sold, and customers are similar. Management consider these operating regions under five reportable segments. The geographic segments consider the location of the sale and product type sold, which is split into three sub divisions. The Company's operating segments are identified initially from the information which is reported to the chief operating decision maker which for Tristel is the CEO.
The group uses a matrix to analyse segments, to analyse the geographic segments against product divisions. The first product division concerns the manufacture and sale of medical device decontamination products which are used primarily for infection control in hospitals. These products generates approximately 87% of Company revenues (2023: 86%).
The second division which constitutes 8% (2023: 9%) of the business activity, relates to the manufacture and sale of hospital environmental surface disinfection products.
The third division addresses the pharmaceutical and personal care product manufacturing industries, veterinary and animal welfare sectors and has generated 5% (2023: 5%) 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 adjusted profit before tax, and strategic decisions are made on the basis of revenue and profit before tax generating from each segment.
| Hospital medical device decontamination | Hospital environmental surface disinfection | Other revenue | Total 2024 | Profit Before Tax 2024 | ||||||
| £000 | £000 | £000 | £000 | £000 | ||||||
| UK to UK and Overseas distributors | 16,238 | 2,547 | 1,208 | 19,993 | 6,094 | |||||
| Australia | 3,378 | 16 | 251 | 3,645 | 164 | |||||
| Germany | 5,451 | 57 | 88 | 5,596 | 252 | |||||
| Western Europe | 7,342 | 290 | 334 | 7,966 | 358 | |||||
| Other ROW | 3,929 | 525 | 279 | 4,733 | 213 | |||||
| Total | 36,338 | 3,435 | 2,160 | 41,933 | 7,081 | |||||
| Hospital medical device decontamination | Hospital environmental surface disinfection | Other revenue | Total 2023 | Profit Before Tax 2023 | ||||||
| £000 | £000 | £000 | £000 | £000 | ||||||
| UK to UK and Overseas distributors | 11,895 | 2,381 | 1,017 | 15,293 | 4,179 | |||||
| Australia | 3,504 | 22 | 134 | 3,660 | 165 | |||||
| Germany | 4,979 | 40 | 89 | 5,108 | 230 | |||||
| Western Europe | 6,673 | 245 | 347 | 7,265 | 327 | |||||
| Other ROW | 3,766 | 608 | 309 | 4,683 | 211 | |||||
| Total | 30,817 | 3,296 | 1,896 | 36,009 | 5,112 | |||||
Revenues from external customers in the Company's domicile (United Kingdom), as well as its other major markets (Rest of the World) have been identified on the basis of internal management reporting systems, which are also used for VAT purposes. In the year the change was made to incorporate the Italy operating segment into Western Europe, as it was determined that it was similar in characteristics to the other countries in the Western Europe segment and to more accurately replicate internal management reporting systems.
Revenues derived from the UK (the largest reportable segment stated above) for 2024 were £20.0m (2023: £15.2m). Revenues from all overseas subsidiaries total £21.9m (2023: £20.7m.)
Hospital medical device decontamination revenues were derived from a large number of customers but include £9.0m from a single customer in UK which makes up 25% of this product division's revenue (2023: £6.1m, being 20%). Hospital environmental surface disinfection revenues were derived from a number of customers but include £2.0m from a single customer in the UK which makes up 57% of this product division's revenue (2023: £1.8m, being 55%). Other revenues also were derived from a number of customers, with the largest customer in the UK accountable for £0.3m, which represents 14% of revenue for that product division (2023: £0.2m, 9% from a single customer). During the year 27% of the Group's total revenues were earned from a single customer (2023: 22%).
The following table provides further information on the Group's revenues:
In addition to the segmental information disclosed product divisions are also split as follows:
| Hospital medical device disinfectants | Hospital environmental surface disinfection | Other revenues | Total 2024 | |||||||
| £000 | £000 | £000 | £000 | |||||||
| Revenue from external customers | 36,338 | 3,435 | 2,160 | 41,933 | ||||||
| Cost of sales excluding depreciation | (5,690) | (1,441) | (843) | (7,974) | ||||||
| Depreciation included within Cost of sales | (330) | (31) | (20) | (381) | ||||||
| Segment gross profit | 30,318 | 1,963 | 1,297 | 33,578 | ||||||
| Gross margin | 83% | 57% | 60% | 80% | ||||||
| Adjusted gross margin | 87% | 60% | 63% | 83% | ||||||
| Centrally incurred income and expenses not attributable to individual product divisions: | ||||||||||
| Distribution costs | (327) | |||||||||
| Depreciation, amortisation and impairments | (2,835) | |||||||||
| Other administrative expenses | (23,693) | |||||||||
| Share-based payments | (1,089) | |||||||||
| Other income | - | |||||||||
| Operating profit | 6,981 | |||||||||
| Operating profit can be reconciled to Group profit before tax as follows: | ||||||||||
| Finance income | 100 | |||||||||
| Total profit before tax | 7,081 | |||||||||
| Hospital medical device disinfectants | Hospital environmental surface disinfection | Other revenues | Restated as 2023 Total | |||||||||
| £000 | £000 | £000 | £000 | |||||||||
| Revenue from external customers | 30,817 | 3,296 | 1,896 | 36,009 | ||||||||
| Cost of sales excluding depreciation | (5,202) | (1,512) | (947) | (7,661) | ||||||||
| Depreciation included within Cost of sales | (368) | (40) | (22) | (430) | ||||||||
| Segment gross profit | 25,247 | 1,744 | 927 | 27,918 | ||||||||
| Gross margin | 82% | 53% | 49% | 78% | ||||||||
| Adjusted gross margin | 85% | 56% | 52% | 81% | ||||||||
| Centrally incurred income and expenses not attributable to individual product divisions: | ||||||||||||
| Distribution costs | (323) | |||||||||||
| Depreciation and amortisation of non-financial assets | (2,188) | |||||||||||
| Other administrative expenses | (19,069) | |||||||||||
| Share-based payments | (1,061) | |||||||||||
| Other income | 4 | |||||||||||
| Segment operating profit | 5,281 | |||||||||||
| Segment operating profit can be reconciled to Group profit before tax as follows: | ||||||||||||
| Finance expense | (169) | |||||||||||
| Total profit before tax | 5,112 | |||||||||||
| 4 | Income tax |
| Tax charged in the income statement | |||
| 2024 | 2023 | ||
| £000 | £000 | ||
| Current taxation | |||
| Current tax | 312 | 285 | |
| Current tax adjustment to prior periods | (70) | (53) | |
| 242 | 232 | ||
| Deferred tax | |||
| Arising from origination and reversal of temporary differences | 356 | 817 | |
| UK deferred tax adjustment to prior periods | (5) | (476) | |
| Tax rate effect | - | 78 | |
| 351 | 419 | ||
| Tax expense in the income statement | 593 | 651 |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of 25% (2023 - 20%).
The differences are reconciled below:
| 2024 £ 000 |
2023 £ 000 |
|
| Profit before tax | 7,082 | 5,112 |
| Corporation tax at standard rate | 1,773 | 1,048 |
| Adjustment in respect of prior years | (75) | (529) |
| Expenses not deductible for tax purposes | 405 | 285 |
| Increase (decrease) from effect of foreign tax rates | (1) | 46 |
| Other differences | (303) | 464 |
| Tax rate differences | 78 | |
| Enhanced relief on qualifying scientific research expenditure | (172) | (98) |
| Patent box relief | (1,034) | (643) |
| Total tax charge | 593 | 651 |
| 5 | Dividends | ||||
| Amounts recognised as distributions to equity holders in the year: | |||||
| 2024 | 2023 | ||||
| £000 | £000 | ||||
| Ordinary shares of 1p each | |||||
| Final dividend for the year ended 30 June 2023 of £7.88p (2022: £3.93p) per share | 3,734 | 1,856 | |||
| Special dividend for the year ended 30 June 2023 of £nil (2022: £3.00p) per share | - | 1,417 | |||
| Interim dividend for the year ended 30 June 2024 of £5.24p (2023: £2.62p) per share | 2,488 | 1,238 | |||
| 6,222 | 4,511 | ||||
| Proposed final dividend for the year ended 30 June 2024 of £8.28p (2023: £7.88p) per share | 3,936 | 3,728 | |||
The proposed final dividend is subject to approval by shareholders at the forthcoming Annual General Meeting and has not been included as a liability in the financial statements.
| 6 | Earnings per share | ||||
| The calculations of earnings per share are based on the following profits and number of shares: | |||||
| 2024 | 2023 | ||||
| £000 | £000 | ||||
| Retained profit for the financial year attributable to equity holders of the parent | 6,489 | 4,461 | |||
| Shares | Shares | ||||
| '000 | '000 | ||||
| Number | Number | ||||
| Weighted average number of ordinary shares for the purpose of basic earnings per share | 47,421 | 47,247 | |||
| Share options | 423 | 111 | |||
| 47,844 | 47,358 | ||||
| Earnings per ordinary share | |||||
| Basic | 13.68p | 9.44p | |||
| Diluted | 13.54p | 9.34p | |||
The Group also presents an adjusted basic earnings per share figure which excludes share-based payments charges:
| 2024 | 2023 | |||||||
| £000 | £000 | |||||||
| Retained profit for the financial year attributable to equity holders of the parent | 6,489 | 4,461 | ||||||
| Adjustments: | ||||||||
| Share based payments | 1,089 | 1,061 | ||||||
| Tax on share-based payments | (303) | (483) | ||||||
| Net adjustments | 786 | 578 | ||||||
| Adjusted earnings | 7,275 | 5,039 | ||||||
| Adjusted basic earnings per ordinary share | 15.34p | 10.67p | ||||||
| 7 | Share capital | |||||||
| Number | £000 | |||||||
| 30 June 2023 | 47,309,993 | 474 | ||||||
| Issued during the year | 226,500 | 2 | ||||||
| 30 June 2024 | 47,536,493 | 476 | ||||||
Allotted, called up and fully paid shares
| 30 June 2024 |
30 June 2023 |
|||||
| No. | £'000 | No. | £'000 | |||
| Ordinary of £0.01 each | 47,536,493 | 476 | 47,309,993 | 474 | ||
211,500 ordinary shares of 1 pence each, related to the exercise of employee share options were issued during the year. (2023: 85,000). The weighted average exercise price was £3.20 (2023: £2.07). The exercise of employee share options in the year resulted in a movement in the share premium account of £745,000 (2023: £192,000). An additional 15,000 ordinary shares of 1 pence each were issued in relation to the settlement of the contingent element of the Falcare acquisition.
| 8 | Prior Year Restatement |
Group
IAS 2: Cost of sales restatement
Within the prior year Income Statement elements of the cost of production were erroneously included within Administrative expenses, excluding share-based payments, depreciation, amortisation and impairment and Depreciation, amortisation and impairments. £1,257,000 has been reclassified to Cost of sales, £430,000 from Depreciation, amortisation and impairments and £827,000 from Administrative expenses, excluding share-based payments, depreciation, amortisation and impairment to align to the requirements of IAS 2. This has no overall effect on the total profit for the prior financial year. The adjustment does not impact the amounts previously presented on the Balance Sheet at 30 June 2022 and therefore a third Balance Sheet is not considered to provide a user of the financial statements with any additional information.
| Group Income Statement | 2023 previously reported | Restatement | 2023 Restated |
| £'000s | £'000s | £'000s | |
| Revenue | 36,009 | - | 36,009 |
| Cost of sales excluding depreciation | (6,834) | (827) | (7,661) |
| Depreciation included within Cost of sales | - | (430) | (430) |
| Total Cost of sales | (6,834) | (1,257) | (8,091) |
| Gross profit | 29,175 | (1,257) | 27,918 |
| Distribution expenses | (323) | - | (323) |
| Administrative expenses: | |||
| Share-based payments | (1,061) | - | (1,061) |
| Depreciation, amortisation and impairments | (2,618) | 430 | (2,188) |
| Other | (19,896) | 827 | (19,069) |
| Total Administrative expenses | (23,575) | 1,257 | (22,318) |
| Other operating income | 4 | - | 4 |
| Operating Profit | 5,281 | - | 5,281 |
| Finance income | 10 | - | 10 |
| Finance costs | (179) | - | (179) |
| Net finance cost | (169) | - | (169) |
| Profit before tax | 5,112 | - | 5,112 |
| Income tax expense | (651) | - | (651) |
| Profit for the year | 4,461 | - | 4,461 |
| 9 | Non-GAAP Measures |
Non-GAAP measures
Income statement reconciliation
The group presents adjusted profit measures (gross profit, operating profit/EBIT, Profit after tax, Profit before tax and EBITDA) by making adjustments for costs and profits, which management believes to be significant by virtue of their size, nature or incidence. Such items may include, but are not limited to, share based payments expense, impairments, fair value movements on investments and restructuring. In addition, the group presents gross profit and adjusted gross profit, EBITDA and adjusted EBITDA (adjusted in the same manner) as management believes that this is an important metric for the shareholders. The group uses adjusted measures to evaluate performance and as a method to provide shareholders with clear and consistent reporting. See below reconciliation of gross profit, operating profit (EBIT), profit before tax, net profit and EBITDA to the respective adjusted measures.
| Adjusted profit measures | 2024 Statutory | Adjustment 1 | 2024 Adjusted | |||||
| £000 | £000 | £000 | ||||||
| Operating profit (EBIT) | 6,982 | 1,089 | 8,071 | |||||
| Net finance costs | 100 | 100 | ||||||
| Profit before tax | 7,082 | 1,089 | 8,171 | |||||
| Income tax expense | (593) | (303) | (896) | |||||
| Profit attributable to equity shareholders | 6,489 | 786 | 7,275 | |||||
| Effective tax rate | 8% | 11% | ||||||
| Profit before tax margin | 17% | 19% | ||||||
| Profit for the year | 6,489 | 786 | 7,275 | |||||
| Income tax expense | 593 | 303 | 896 | |||||
| Net finance cost | (100) | (100) | ||||||
| Depreciation, amortisation and impairments | 2,773 | 2,773 | ||||||
| EBITDA | 9,755 | 1,089 | 10,844 | |||||
| Revenue for the year | 41,933 | 41,933 | ||||||
| EBITDA margin | 23% | 26% | ||||||
| ROCE | 2024 Statutory | |||||||
| £000 | ||||||||
| Total assets | 44,109 | |||||||
| Current liabilities | (6,592) | |||||||
| Capital employed | 37,517 | |||||||
| EBIT | 6,982 | |||||||
| ROCE | 19% | |||||||
| Adjusted profit measures | 2023 Statutory | Adjustment 1 | 2023 Adjusted | ||||||
| £000 | £000 | £000 | |||||||
| Operating profit (EBIT) | 5,281 | 1,061 | 6,342 | ||||||
| Net finance costs | (169) | - | (169) | ||||||
| Profit before tax | 5,112 | 1,061 | 6,173 | ||||||
| Income tax expense | (651) | (483) | (1,134) | ||||||
| Profit attributable to equity shareholders | 4,461 | 578 | 5,039 | ||||||
| Effective tax rate | 13% | 46% | 18% | ||||||
| Profit before tax margin | 14% | 17% | |||||||
| Profit for the year | 4,461 | 578 | 5,039 | ||||||
| Income tax expense | 651 | 483 | 1,134 | ||||||
| Net finance cost | 169 | - | 169 | ||||||
| Depreciation, amortisation and impairments | 2,618 | - | 2,618 | ||||||
| EBITDA | 7,899 | 1,061 | 8,960 | ||||||
| Revenue for the year | 36,009 | - | 36,009 | ||||||
| EBITDA margin | 22% | - | 25% | ||||||
| ROCE | 2023 Statutory | ||||||||
| £000 | |||||||||
| Total assets | 41,367 | ||||||||
| Current liabilities | (5,763) | ||||||||
| Capital employed | 35,604 | ||||||||
| EBIT | 5,281 | ||||||||
| ROCE | 15% | ||||||||
Specific adjusted items are as follows:
1. Share-based payment charges under IFRS 2
Gross profit margin reconciliation
The Group presents adjusted gross profit measures by making adjustments to cost of sales regarding production costs. The Group presents these adjusted measures as a method to provide shareholders with clear and consistent reporting.
| Adjusted profit measures | 2024 Statutory | Adjustment 1 | 2024 Adjusted | ||||||
| £000 | £000 | £000 | |||||||
| Revenue | 41,933 | - | 41,933 | ||||||
| Cost of sales excluding depreciation | (7,974) | 966 | (7,008) | ||||||
| Depreciation included within Cost of sales | (381) | 381 | - | ||||||
| Total Cost of sales | (8,355) | 1,347 | (7,008) | ||||||
| Gross Profit | 33,578 | 1,347 | 34,925 | ||||||
| Gross Profit Margin | 80% | 83% | |||||||
| 2023 Statutory | Adjustment 1 | 2023 Adjusted | |||||||
| £000 | £000 | £000 | |||||||
| Revenue | 36,009 | - | 36,009 | ||||||
| Cost of sales | (7,661) | 827 | (6,834) | ||||||
| Depreciation included within Cost of sales | (430) | 430 | - | ||||||
| Total cost of sales | (8,091) | 1,257 | (6,834) | ||||||
| Gross Profit | 27,918 | 1,257 | 29,175 | ||||||
| Gross Profit Margin | 78% | 81% |
Specific adjusted items are as follows:
1. Reallocation of costs of production to Administrative expenses.
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FR FLFFAIRLIFIS