AIM-listed infection prevention firm Tristel (LON:TSTL) posted double-digit revenue growth in FY26 after sales in the Americas more than doubled. While still modest, there is enormous potential for the company to continue growing sales, especially in the US market.
Double-digit sales increase
The Cambridgeshire firm increased turnover in the year to June by 10% to £511 million, in line with its internal targets. The gross margin, which is turnover minus the cost of sales, increased further to 82%.
The company said H1’s strong momentum continued through H2 thanks to growth in Europe, the Middle East and Africa (EMEA) in particular. The US also saw a ‘material increased contribution’, driving Americas sales from £03 million to £0.8 million.
Adjusted pre-tax profit increased 15.8% to £11.7 million, while adjusted EPS rose 6% to 18.19p against 17.15p. Cash and short-term investments rose 25% to £16 million, giving the firm flexibility to raise the dividend.
Tristel FY26 sales and earnings (in £ millions)
| FY26 | FY25 | Change | |
| Group sales | 51.1 | 46.5 | +10.1% |
| UK | 18.2 | 17.4 | +4.6% |
| EMEA | 24.1 | 21.0 | +14.8% |
| Asia Pacific | 8.0 | 7.9 | +1.3% |
| Americas | 0.8 | 0.3 | +166% |
| Pre-tax profit | 11.7 | 10.1 | +15.8% |
| Cash | 16.0 | 12.8 | +25% |
Source: Company accounts
Strong, profitable growth
Newly-appointed CEO Chris Lee described FY26 as ‘another year of strong, profitable growth for Tristel’. Strategically, the group made good progress with increased adoption of its disinfectants in the US and new product launches.
‘Having joined Tristel in August, I have been impressed by the quality of the business, the scale of the opportunity ahead and the passionate, dedicated team behind it all’, added Lee. ‘Together these elements provide Tristel with a significant scope for long term growth and I look forward to building on these strong foundations.’
We initiated coverage of Tristel just under a year ago and in March we flagged the opportunity in the US market. Since then the shares have risen a modest 10%, in line with sales, but we think there is much more to go.
The pace of growth in the Americas, driven by the US, means the region will account for an increasing proportion of sales. At the same time, a gross margin of 82% suggests the firm has a genuine economic ‘moat’ which will be hard for competitors to breach.
‘Tristel continues to deliver revenue growth, margin improvement and cash generation, supporting its progressive dividend policy and creating an attractive investment proposition’, say analysts at Cavendish. ‘The company is targeting additional growth opportunities; further developing the US market, adopting a focused Tristel Surface strategy and launching its digital platform offering, with these drivers expected to support and enhance growth.’
We have adjusted our earnings forecasts for FY27 and FY28, and they reinforce our conviction in the double-digit trend of the past 20 years. Yet the shares currently trade more than one standard deviation (SD) below their 20-year average valuation.
Therefore, if they were just to revert to the lower SD band over the next two years the target price would be around 670p. That represents an increase of more than 50%, and the stock would still be materially undervalued.
Disclaimer: The author (Ian Conway) owns shares in Tristel
