Tristel profits remain flat amid Brexit uncertainty

Tristel’s shares dipped on Wednesday as revenue growth was at the lower end of the target range and said it had warned customers about potential supply chain disruption from Brexit.

For the year ended 30 June the company’s revenue increased by 10% compared to the prior year, rising to £22.2m, while profit before tax increased by 1% to £4m as share based payments rose to £0.7m from £0.1m.

Paul Swinney, chief executive of Tristel, said: "We made solid progress during the year. Whilst sales growth was at the lower end of our target range, adjusted pre-tax profit and net margin exceeded both market expectations and our internal plan. Once again, the driver for top-line growth was our overseas activity which now accounts for more than half of the group's business."

The infection prevention and contamination control products manufacturer’s 19% increase in overseas sales acted as the driver behind the revenue increase, outpacing UK sales for the first time in the company’s history.

Non-UK sales stem from wholly-owned subsidiaries in Germany, Poland, Russia, Hong Kong, China, Australia, New Zealand and via third party distributors, though operations in the United States are currently being assembled.

"Our plans to enter the United States market remain on track and continue to progress well," Swinney said, having secured a first product approval and established capability to manufacture and sell in the US. "We are waiting for additional approvals from the EPA for enhanced product claims for Duo and state registrations before we will start active promotion and marketing in the USA."

However, Swinney also expressed concern about Brexit and stated that the company has recommended that continental customers increase their stockholdings in preparation for potential supply chain disruption.

The AIM traded company had cash and cash equivalents of £6.7m at 30 June, up from £5.1m at the same point the year before, and increased its dividend per share by 14% to 4.58p.

Tristel’s shares were down 7.41% at 259.24p at 1035 BST.