My Sold Shares

29 October 2021
By Maynard Paton

Results summary for Tristel (TSTL):

• A disappointing pandemic-disrupted performance, with H2 revenue and profit down 15% and 36% respectively on the preceding H1.

• Progress was curtailed as NHS outpatient clinics closed and orders “dried up“, which left certain UK product sales running at a six-year low.

• Overseas revenue up 3%, a resilient 16% H2 margin, net cash of £10m and a 2% final-dividend lift suggest the business is not broken just yet. 

• A re-introduced timetable for product launches in the United States provides hope of the seven-year FDA process concluding during 2023.

• The £236m market cap remains elevated, and is supported by a sector rival implying the US market for ultrasound-probe disinfection is worth up to $180m. I continue to hold.

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09 March 2021
By Maynard Paton

Results summary for Tristel (TSTL):

• A satisfactory pandemic-assisted performance, with revenue up 14% and profit up between 12% and 31% depending on the adjustments made.

• Sales were bolstered by Brexit stock-piling, which will unwind during H2, with underlying UK progress still difficult to interpret.

• Overseas sales improved a useful 20% although the United States regulatory project and other ventures remain very slow burners.

• The 21% operating margin seems impressive in light of “one-off” payroll costs and the headcount increasing 19% to prepare for future growth. 

• The 48x P/E looks stratospheric, but permanently greater demand for hospital disinfectants, further expansion plus growing economies of scale may justify a lofty rating. I continue to hold.

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05 November 2020
By Maynard Paton

Results summary for Tristel (TSTL):

• Revenue and profit reached new highs following very satisfactory 20%-plus growth, bolstered in part by the pandemic.

• The UK performance appeared odd, given H2 sales were lower than H1 despite the Covid-19 boost.

• Overseas sales surged 35% during H2, with the purchase of Ecomed during 2018 now proving to be a great success.  

• The accounts remain in good shape with high margins, appealing equity returns, net cash and respectable cash generation. 

• A possible P/E of 39 might be justified if the pandemic leads to permanently greater demand for hospital disinfectants. I continue to hold.

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29 February 2020
By Maynard Paton

Results summary for Tristel (TSTL):

• Bumper first-half figures showed very satisfactory double-digit growth following superb sales increases within the UK and various overseas markets.

• The underlying profit performance was complicated by undisclosed acquisition contributions, US regulatory costs, hefty option charges and cheeky bookkeeping.

• Following these results, the coronavirus outbreak has led to an emergency “special exemption” order from China and prompted “substantial” extra purchases by the NHS.

• The accounts remain in good shape with high margins, net cash and respectable cash generation.

• The valuation has become extremely punchy with an estimated underlying P/E of 43. I continue to hold.

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12 December 2019
By Maynard Paton

Results summary for Tristel (TSTL):

• Record annual figures for the sixth consecutive year, supported by satisfactory progress both within the UK and abroad.

• The underlying performance was complicated by Brexit stock-piling, an acquisition, US regulatory costs and option expenses. 

• The publication of new three-year financial targets was impressive, and suggested the company could grow organically at 10-15% per annum. 

• The accounts are still healthy with high margins, net cash and respectable cash generation. 

• The valuation remains understandably rich with an estimated underlying P/E of 30. I continue to hold.

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