Cambridgeshire-based Tristel (TSTL:AIM) is a specialist in infection prevention whose products are used in the high-level disinfecting of medical equipment.
While its primary focus is on acute treatments, which typically take place in major hospitals, the trend towards more medical procedures being outsourced to clinics and community healthcare settings mean the market for its products is continually growing.
Due to fact its products are made in-house, the company has a high gross margin on sales (82%), while it is also cash-generative and debt-free, with a 4% dividend yield and a progressive policy policy,
New chief executive Matt Sassone, who arrived last year, has set a target to grow revenue by between 10% and 15% annually from 2024 to 2027, and so far the firm is on track.
Revenue for the year to June 2025 increased by 11% to £46.5 million, but impressively growth in the second half was 15% in line with the top of the target range.
Profit before tax for the year was up 23% to more than £10 million, and the firm had a cash balance of £12.8 million, giving it the flexibility to invest in the business, buy back shares or increase the dividend.
The group’s largest market, and the one which promises the fastest growth, is the US, where it already has a commercial partner in Parker Labs, which supplies ultrasound gels, and where it has already had some notable successes this year.
Both Tristel ULT, the company’s proprietary product for use in ultrasound treatments, and Tristel OPH, for use on ophthalmic medical devices, have received approval from the FDA (Food & Drug Administration) this summer, opening up large markets.
Analysts at Cavendish believe OPH in particular offers a number of advantages over current US disinfectant products, noting the firm has already received approaches from numerous leading eye institutes to become early adopters.
Assuming the company can continue to deliver revenue growth in line with its target, while improving its operating margin and cash generation, which will support its progressive dividend policy, we think Tristel represents an attractive combination of growth and income.
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