Tristel PLC

Well good afternoon everybody and thank you so much for joining us here for our interim results presentation. I think we've had a few people struck down by the weather and so our numbers are down a bit but it's good to see you. So we're presenting our results for the six months of the 31st of December. And let's flip to our next slide, our first slide. Well, that first slide of ours, we titled Refocusing the Business, and we really should have, and on reflection, have written Focusing the Business, because we're not changing direction. During the half, we have simply got rid of the activities that were distracting us and slowing us down. And a key feature of the announcement today is the discontinuation of a large number of the products so that we can focus ourselves upon our chlorine dioxide chemistry and the hospital marketplace. If we delve into the reasons for that, for some time we had planned to discontinue or withdraw from some of the peripheral activities outside of our hospital marketplace. And in October, with the year-end results, we shared that with our shareholders that there was a product discontinuation program that we were going to work on. We actually had an internal project name for it, which is Project 23, because we thought we would take until 2023 to complete the program. But we acted, I think, very decisively as a management team with the full support of the board. And we actually got on with it. And during the half, we discontinued a very large number of SKUs. The reasons for doing this, I think are worthy of explanation for you all. Up until the COVID, up until the pandemic striking, tri-sellers, you're very well aware, I think, have been charting a pretty steady course. But with COVID, demand for our products skyrocketed. in order to meet that demand in the initial phase of the pandemic we stretched we strained we stressed the organization to meet that demand and i have to say various weaknesses were revealed and the root cause of those weaknesses was a simple fact that 47 percent of our product portfolio was generating just 12 percent of our revenues so in this half We discontinued the manufacture and sale of almost all those products. And these results, which Liz and I are presenting, tell their story. We finished the project. We've completed it. And what we now reveal is a business totally focused on the hospital and our proprietary chlorine dioxide chemistry. And when our hospital customers around the world return to normal levels of service, which we can detect is happening, a faster growing and more profitable business will emerge. The rationalization that we completed is not simply for the purpose of freeing up manufacturing. It frees up the organization to focus on growth. And it also enables us to release our best people to lead the charge into North America. So let's talk about the United States and Canada. We have resumed the state-by-state registration of our product duo. that has an EPA approval. We received that approval a couple of years ago and some of you will recall that we had started the state by state registration process and then we put it on hold for reasons which I'll explain. In conjunction and in discussion with our business partner in the United States, Parker Laboratories, we have taken the decision during the half to reignite that process and to, we will have with the target date of end of June, Duo targeted at the ultrasound marketplace approved for sale throughout the United States. At the same time, we continue to prosecute our submission to the FDA for Duo, the same product in essence, but for approval as a high-level disinfectant by the FDA as the regulatory body for that use pattern. And I'll draw your attention to the graphic of the ultrasound console to explain the distinction between EPA approval and FDA approval and what that means for the use of our product. What you can see there is an ultrasound console and it involves a keyboard and a monitor and the gubbins within the body of the machine and And the ultrasound transducer, the probe, which comes into contact with the body is attached to the console via a cord. Now the EPA has jurisdiction over all of the surfaces that are in grey. So it includes the keyboard and the monitor and the cord. And in this graphic, the grey section stops at the transducer itself. And that's because the transducer shown is what's called an intracavity transducer. As you can see by its shape, it's designed to go into one of the two orifices that it's intended for use within. If the transducer that is shown attached to the cord was of a different design, they tend to be flatter, fatter, it would be what is called a skin surface ultrasound probe. The key distinction between those two ultrasound probes, the technology is exactly the same in terms of imaging with inside the body, but in terms of regulation, the skin surface probe is classified as non-critical. and therefore can be disinfected with a product that has been approved by the EPA. And the intra-cavity probe coming into contact with the mucosa inside the body is classified as semi-critical and as a consequence has to be approved by the FDA. And a disinfectant approved for that use has this classification of being a high-level disinfectant. With both EPA and FDA approval, we will be unique in the United States in that we have one solution for the entire ultrasound system, including semi-critical transducer use, non-critical transducer use, and all the other surface areas of the console itself. We expect to complete our FDA submission by the end of June, before the end of June is our target of course. We're well advanced in the preparation of the de novo submission dossier. Once submitted, we will then be looking at a 12 to 18 month period of time during which the FDA reviews our submission, and of course we all hope that we will succeed, prevail, and get an approval The reason why we have decided to restart the state-by-state registration is that increasingly ultrasound probes are being used in conjunction with needle site procedures. By which I mean if you're going to have a line insertion into the venous system, whether it's a central line or a peripheral line into the back of the hand or the arm, We might all have nice, plump veins, but lots of people, aged, obesity is a real problem. It's difficult to find that vein. And ultrasound skin surface probes, which classically are defined as being non-critical, are being used in close proximity with the skin puncture site. Our main competitor worldwide for the high-level disinfection of intra-cavity probes is a company in Australia with a product called Trofon. And they have been lobbying very hard in the United States to get the clinical bodies and CDC to, if you like, upgrade the classification of a skin surface probe from non-critical to semi-critical when it's being used in conjunction with the skin puncture site. Parker has a very strong relationship with the ultrasound marketplace. They're the market leader in the United States in the sale of the ultrasound gels that are used with every ultrasound procedure. The intra-cavity probe shown here, if it was going into one of these drawer offices, you always put a sheath on the probe. In part, it's a hygienic thing to do, but it also keeps the conducive gel on the transducer tip. And they're market leader in the sale of ultrasound gels and ultrasound sheaths. And they are very aware of the pushback from the societies in the United States against this move, lobbied for by Trofon to see these skin surface procedures be upgraded to semi-critical decision. Of course Trofon is doing it because it's driving demand towards its own product. And so Parker consulted with us and said, let's enter the market with our EPA approval for Juro as quickly as we possibly can because there we can help the American Society of Sonographers and others to push back against this lobbying by Trofon, because we, with our Giro product, although we are presenting it with our EPA approval, it will one day, and it will be known by the prospective customers, it will one day have FDA approval. So that is a reason, and I hope I've explained it well enough for everybody here to understand, and of course we can go over it in questions. But that is the reason why we've restarted the EPA approval. So just to summarize that, the EPA state by state should be finished by the end of June. The FDA submission should be in by the end of June. We're looking at a year to a year and a half window before the FDA decision is made. And we will be able to, with the EPA approval, once it is state by state, to start marketing our duo product. So the strategic intent between us and Parker is to get into the market, establish our brand, acquire a user base, and position ourselves for when the FDA approval is ultimately granted to us. Elsewhere in North America, we were approved last year for our Duo OPH, which is ophthalmic. So it's a Duo, same product essentially, but it's labeled for use on ophthalmic devices. It's the equivalent Canadian regulator as the FDA is in the States. And we are in the final stages, I hope, of appointing a national distributor for Duo's market introduction in Canada.

Okay, so if we go into the detail of the discontinuations a little bit more. On the left hand side of the screen, you'll see a graph which shows if you strip away everything that's non-hospital and non-chlorine dioxide, what's left is our core business. And our core business has grown through the pandemic. In the half that we're reporting upon, the underlying continuing sales are 5% higher than the comparable first half and 17% higher than the period before that, which was before COVID started. And these are the highest margin products that we sell. So our underlying business of chlorine dioxide hospital products have grown through the pandemic. They achieve the highest gross margin of our product sets. They are almost exclusively based upon chlorine dioxide and they represent 195 of our SKUs which was roughly 50% of our SKUs. In contrast on the other side of the screen you'll see our discontinued sales and these are the non-core products which fell by a third during the period and earned a much lower and declining gross margin. They represent 173 SKUs, and they, as opposed to a single active, which chlorine dioxide we would class as, these represented 15 active substances. So when we talk about actives, we mean the chemical ingredient within the product which allows it to perform its function. So it dissolves the dirt or it kills the bugs on the surface or on the medical device. The cost of supporting those actives under the biocidal products regulation can be as much as £100,000 per active. And so the cost of continuing with this product range is disproportionate to the value which it had been creating for the company, which is one of the reasons why we chose to discontinue. And then of course the quantity of products, when we look at roughly half and half between continuing and discontinuing SKUs in this category, they require substantial support from our UK teams. Our product team, our regulatory team, our quality team. And again, it's disproportionate to the level of revenue and profit that is generated from them. By removing those discontinued products from our portfolio, we pave the way for higher growth rates. for higher gross margins and, most importantly, the time of our teams to focus on, at this time, projects which are much more significant to the future of the organisation. In the first half, having made the decision to discontinue the products, we were obliged to, at that point in time, write down any remaining intangible assets associated with them. And the impairment that we are reporting in this first half totals £2.4 million. It principally relates to the intangible associated with the veterinary range, but it also includes patents and trademarks and goodwill associated with all of those products. So what are the outcomes that we expect from the discontinuation programme? Well, revenue growth will no longer be held back by the decline in non-core sales. And we note here that we will reset our financial targets at the end of the financial year, covering the three years to 2025. By then we will be able to see how our overseas markets are progressing out of COVID and that will give us better visibility on what those targets should be. If all the countries in which we have a sales presence were as well advanced as the UK is in terms of the pandemic, then we feel a return to normality for Tristell would be imminent. Other outcomes that we envisage from the discontinuations include an increase in gross margin, so we're reporting an 83% gross margin in this period for continuing products compared to 80% last year which was being dragged back by these non-core areas. A repositioning of internal resource to follow a single technology in a single market. And as we operate in an ever more demanding regulatory environment, with the removal of the more complex products from the range, our regulatory and quality teams will be able to focus on what really matters. and that is the high growth, high margin products that are our core. And similarly, we'll be able to look forward to simplified manufacture, so smaller pack sizes but higher volume campaign production, leading to the possibility of in-region production, which will shorten the supply chain and have a positive environmental impact as well.

So this is what... the Tristell PRC product range looks like today? Tristell is the brand for medical device decontamination products and Cash is the brand for sporosidal surface disinfection products. Almost all of them contain chlorine dioxide as the active ingredient and we have a few instrument cleaners and detergents sitting alongside them to complement chlorine dioxide's disinfection use.

So bringing all of this together and looking specifically at continuing operations, I'll run down the financial highlights. So first of all, underlying revenues. Now when we speak of underlying revenues, what we're doing here is removing the adjustment caused or the disruption caused by the Brexit stockholding by NHS supply chain. over the course of the last 18 months. So in half one of the last financial year the NHS purchased an excess of product amounting to £900,000 and they've put it in a dedicated warehouse and left it there so that as we move through the Brexit timetable they were protected, NHS hospitals were protected from any potential disruptions we would have as a supplier into the NHS hospitals. Then in the first half that we're reporting upon they released that £900,000 and so they stopped buying from us for that period. So we saw a jump up in our sales in 2021 financial year and then we see a hole in 2022 financial year and the distortion amounts of a year-on-year impact of £1.8 million. So we've removed that distortion from these numbers and refer to that sales trajectory as underlying sales. So strip out the Brexit distortion, looking purely at continuing operations, then our underlying revenue growth was 5%. Gross margins were 83% against 53% for the discontinued products, so again that rationale of discontinuations. Adjusted EBITDA was 3.3 million and an EBITDA margin of 24%. Adjusted PBT, so this is adjusted for share-based payments now, came in at £1.9 million and that compares to £2.6 million in the previous period, so of a decline, and that was caused by that Brexit £1.8 million shift between the two years. Diluted EPS, 2.5 pence, and an interim dividend of 2.62 pence per share. We omitted to say in our chairman's statement the payment date for that dividend, and it is the 29th of April. And that's going to shareholders on the register on the 8th of April, and that's the next dividend date of the 7th of April. Cash generated from operations during the half was £3.4 million and cash balances at the end of the six months £8.8 million and today the balance on the bank account is £9.4 million. So here we see the sales growth by geography. And again, we're focusing upon the continuing products. The APAC region performed well with growth of 10%, perhaps reflective of the zero tolerance COVID approach taken in those countries. Europe remains static, although Europe's progression through COVID is closely following the UK's. And so we expect a return to growth within Europe very soon. Our distributors business fell by £300,000. And the key reason for that is the stocking up of product in the comparable period, but also the impact of COVID hampering product use. And in the UK, we report here a decline of 21%. However, this includes the distortion caused by NHS supply chains, Brexit stockholding. And if you remove that £1.8 million between the two years, then you can show within the UK underlying growth of 18%. So that decline of 21% turns into 18% if you add back that 0.9 specifically to the UK. And if you add back the 0.9 on the global perspective, then you come to the 5% underlying growth for the group. I do appreciate that all of this adding back and adjusted and discontinuing and continuing numbers muddy the picture. I appreciate it's difficult to grasp and it's been a challenge for us to explain. But the shape of the business as we move into half two is a cleaner and more simple product set. And we are seeing continued growth. We've seen continued growth through COVID of our underlying product set. And now that we're free of the Brexit distortions and we've dealt with this discontinuation, then I do believe that as we move into half two and into the next financial year, we will see much stronger growth, a much clearer picture and also a much higher gross margin. So a quick slide here with respect to ESG. What we can tell you is that our board has a good gender split between male and female. We have a good level of independent non-exec directors. And within the company itself, we've got a strong split between male and female for leadership roles and salary levels. And we've got some good ESG actions to date, which our staff have really bought into. all leading to us working towards being a company that does what we do, but we do it properly and ethically.

Finally, before we can move to questions, we take the whole ESG issue very seriously, as Liz says, but the product strategy that we use have developed contributes into the future at least enormously to the environmental part of the ESG initiative so at the heart of our cap of our cash system concept is the capsule a picture a photograph of which is shown at the bottom and that contains our two chlorine dioxide active ingredients that when they come together form chlorine dioxide And the whole thrust in the development has been to miniaturize the packaging holding the concentrates in these small plastic packs. And the three graphics that surround the picture of the capsule are some of the marketing collateral and part of the sales pitch which we make against plastic wetted wipes, which is what we're seeking to replace. So we save space. One pallet of capsules is the equivalent of six lorries of the leading sporosidal surface wipe that's used throughout the NHS. we have so much less plastic in our capsule than would be the case in the equivalent number of packs that would be formed from the chemistry. And a very important part of healthcare systems' concerns over product sourcing throughout the pandemic, it was exposed by the pandemic, I think, is security of supply. This is a pitch against our competitor set. Most of those wipes that are used in hospitals, indeed in the home, are manufactured in China and shipped across the world to their use destination. In this case, we make reference to the NHS supply chain hub in Alfredton to demonstrate the fact that our product travels 134 miles and our competitor's product traveled 12,000 miles to get into your local hospital. So this is unashamed marketing collateral. But it just does demonstrate, I think, a truth, and that is our format of our products and our whole product strategy can contribute enormously to the ESG initiative.

Well, I was just going to say that it's not just from an ESG perspective. Our customers are very interested in this. Increasingly, emission levels is a key part of the purchasing decision-making. So we do need to demonstrate that our products are environmentally friendly. So this is a key feature of the product from our customers' perspective as well.

Absolutely.

So we'll just have a...

Ah, summary and outlook.

Summary and outlook. So all the things that we've just spoken about, underlying first half growth through the pandemic and continuing, Brexit distortions are gone, COVID impact receding, And we see that day by day, certainly within the UK. And we have sharpened our focus on the higher margin, higher growth products. And we, of course, remain profitable, cash generative and debt free. And that broad geographical based growth strategy continues to deliver. So we don't have a single reliance upon a single market. So we believe that the long term prospects continue to be very encouraging.

Thank you. OK, so questions?

Last October, this is about the Indian distributor, you said that they hadn't placed any orders during the nine months since they were appointed. I think you said, Paul, that it was a price issue. I wasn't clear whether that was the distributor margin or the price to the hospitals. But what is the current position with India, please?

We've made no progress. Thank you for that. We've made no progress at all with our distributor in India, and that is in large part due to COVID within the country. We know the company very well, Genworks. We're in frequent contact with them. I do think it's one of those difficulties. It is a pricing issue, unquestionably, but until we can actually travel to the country and sit with them, attend some conferences or trade shows together, it's going to be very difficult to make any progress. I hope that's going to free up. I was reading over the weekend that we can now travel to India. And this is true of so many countries around the world. I think when we talk about returning to normal, there are two themes to that statement. One is hospitals returning to the level of service that they were providing and the number of patient examinations that they were conducting before COVID. And the second theme is us, our sales teams, our management team being able to go into hospitals and go and meet our distributors and resume that sort of face-to-face engagement that has been denied us for the last two years. So it's frustrating and it's disappointing that India hasn't delivered on anything at all other than a very cooperative and collaborative set of discussions with Genworks in India, but no business yet.

Just on the discontinued operations, the annual report said last year that other revenue was 3 million. And the statement today says discontinued is 3.8 million. It looks like you've reallocated some surface revenue into discontinued. So can you just explain about that, please?

Yes, so there have been in both our healthcare or medical device disinfectants and surface product ranges, there have been non-chlorine dioxide products in there. So quaternary ammonia compounds, which are an intermediate level disinfectant. Predominantly, I think you would have found them within the surface product range. And yes, you're absolutely right, we have discontinued those.

So is the economics of the service division as good as it was? Because if you look back at the annual report, looking at a gross profit of 2 million, oh, sorry, it's 2.7 million, and now you've restated it as 2.1. So it's not as profitable.

The remaining product range is not as profitable. In terms of gross profit, no, it's not because it's a smaller revenue number. But what's left in the surface range is all chlorine dioxide, which has a greater potential for growth and has a greater potential in terms of gross margins.

And also the UK revenue. Have you restated that as well from last year? Because looking back at the notes from this time last year, the UK revenue or hospital revenue was 5.9. Now you're saying it is 4.7. So has that been rejigged at all?

When we talk of continuing operations, we are now talking about cloned outside products. in a comparable period that could be cloned outside and other chemistries. And those are the products that have been subject to the discontinuation program. So there is reclassification trying to marry up prior period.

Perhaps if I go back to the slide, it might be clearer. So here we've got discontinued products at the bottom in grey. So the UK continuing of 3.6 million. That excludes the discontinued products.

Okay.

Does that answer your... I'll have to... Yeah? I'll have to do this meeting.

Okay.

Yeah, no, you do, you do, Maynard. To marry it all up and... I've got a copy of last year's report, or presentation, so we can compare that. No, please do, please do. Just two quick ones as well. US costs, I mean, can you... How much was that?

Yeah, to date, we have spent £2.8 million, and we expect the total by the end of June to be £3 million.

And other operating income? That's 162 or something.

Other operating income. This was a payment through from an investment that we had made back in, gosh, I don't know, 2007, 8.

A long time ago. So when we have a distributorship, we've had a distributorship with an American company that makes sodium chloride. And sodium chloride is one of the two components that we bring together to make our chlorine dioxide. And back in 2005, we made an acquisition of a company called Vernagene. We'd just gone public and we bought a company called Vernagene. And it was in the water treatment business, Legionella Control Marketplace. And it was the distributor for this American company's sodium chloride. One of the benefits of making that acquisition, it was to create the relationship with Bioscience International, which is this American company. And they, Bioscience themselves, were one of three, possibly four companies at the time, that had joined together to invest in and see through the biocidal products regulation, sodium chloride, so that it would become approved for use as a disinfectant throughout Europe. And we, part of our reason for buying Vernagine, creating this relationship with biocides, and becoming their appointed distributor and representative in the whole BPR process, we asked them whether we could share the cost of the investment to generate the data to get BPR approval in due course under the BPR. And they said yes. For us, strategically, it was important, a bit complex this, but it was strategically important because the whole future of our chlorine dioxide technology is dependent upon sodium chloride, one of the two components that makes the chlorine dioxide, being approved under the BPR. And we wanted to have a seat at the table and be involved in the process. The total investment by the various different companies who were supporting BPR sodium chloride was probably about 600 000 pounds and we participated 100 000 pounds being one third so it was that one sixth of the 600 000 pounds that was invested well the way that the bpr thing works is you generate this data and then other companies want to have access to sodium chloride And they'll pay for access to your data so that they can get their product registered. When Liz mentioned earlier that product approval under the BPR process can cost as much as £100,000 per product, it's because you're having to go to the source data to support that particular chemistry and you're paying someone else for the data that they've generated. was a distribution of the pool of funds by the group that we're a member of because we've been paid or the group has been paid for data and the and the profit has been made effectively and there was a distribution and our share of it was i think was a hundred thousand pounds during the half and that's where it came from so we made a successful investment in supporting um sodium chloride through the bpr and there has been a distribution and there was a very small amount distributed again in january So it's kind of an asset that sits there on our balance sheet and we had a return from it. Another contributor to that other income line is that the parasitic acid chemistry that has been manufactured and sold by us and is part of the discontinuation product. We sold or we transferred some formulation detail to our South Korean distributor for which we charged them £50,000 and they paid that to us. So it's odds and sods, if you like, of different miscellaneous revenue streams.

Thank you.

Could you tell me on the discontinued products, are there any further sales that we're going to see in H2 and equally well, are there going to be any write-offs of stock?

There was a little bit of product that was manufactured by the end of the year that has been sold out. It'll be less than £100,000 in the second half. And there would be next to no continuing costs that were registered in the second half. So we really did work very hard to try and draw a line under it all by the 31st of December.

Second question. On the skin puncture site topic, I'm not sure I've fully got that. If I understand correctly, Trofon is trying to make it sort of an FDA required product. Procedure, yeah. Yeah, procedure. And we seem to be sort of trying to keep it as an EPA. I'm a little bit confused.

Could you help clarify? Okay, I'll be perfectly honest. If we had FDA approval, we might be on the same side of the debate as Trofon, but the fact is we don't at the moment. And we want to... We have an opportunity to... enter the ultrasound market with our EPA approval because it's closer to us in terms of chronology. So we are going to take that opportunity so that we can start marketing with Parker and through their distribution network, start presenting our duo product and our brand to the ultrasound marketplace in the hope that we will have that FDA approval in due course. Then there is an interesting scenario that unfolds, which is we have a intermediate level disinfectant which has got EPA registration and we have a high level disinfectant that has got FDA approval and that's tomorrow's issue really as to how we reconcile two different price points. I mean, there are two differently approved products with two completely different use patterns. So I think it is a good dilemma to have and one we'll find our way around in the next couple of years as this very good problem presents itself to us.

FDA period of 12 to 18 months, a good guesstimate on your part, or Parker's as well? And possibly could it be a lot longer? We don't know, or are we convinced?

We can look at the FDA's website and we can see how long on average de novo submissions are taking from submission through to approval. A lot get abandoned on that journey. We're assuming ours won't be abandoned. And so we have, as a public body, they have to make all of that information clear to everybody. So that's one guide. Yes, Parker has a view. We have a view. Our lawyers have a view. Our advisors have a view. The technical consultants that we work with. And it kind of is a consensus view arrived at from those very different, you know, those various different perspectives. It is our best guess.

I might be wrong on this but your UK patents for the the wipe system I think they're due to expire or they look like they're due to expire in the next few years so is that the case and if it is can we expect sort of generic competition to come in and compete?

The white base pattern, which is called the traceability pattern, expires in 24 and in 26 across different geographical jurisdictions. Will there be a generic market entrance? I don't think there will be, because it's more than the patent that gives us our protection as proprietary know-how within the formulation. It is what it is. The patents have come to the end of their patent lives. What we have been investing in is the next generation of manual disinfection processes using our chlorine dioxide chemistry, building upon manual application via wiping of our foams and a stronger focus on duo than the wipe system. innovating to address some of the concerns that prospective users and existing users and regulators have with the manual process, which fundamentally means, how do I know that with your hands you have covered the entire exterior surface of the instrument? It's the biggest challenge that we have day in and day out, have always had and will always have. And we've been looking at various technologies that we could combine in our manual application process, including markers, dyes, other methods to map the hands and be able to determine, verify that the surface area has been covered. Many of you will be aware that we developed an app which we call 3T. That app was developed to enable the user to be guided through the disinfection process. It provides prompts to the user. It tells the user when to stop and wait for something to happen. But it is doing this with observation via the camera that's embedded in the smartphone. And this, because we're taking images, because we can capture images throughout the whole process, means that we can train those images and create algorithms that achieve all sorts of different things, which would include the movement of the hands. And to go to your point, Maynard, and that's what I really want to... We've laid down four new patent applications that have gone to grant that give us technology, which I think acts as a, you know, gives us protections into the future, gives us a new generation of manual work. reprocessing and addresses will address the greatest concern that users have with our product that that that surface coverage can't be assured and verified independently of the individual doing the job so uh patents coming to their end of their of their life and another generation of patents that would give us protection way into the future

That new generation, will they come in before the existing ones expire?

Yes, if our product development process succeeds in delivering what I've just described most definitely.

Okay, thank you.

Can I just ask, is there a... Is there any chance that sales could commence in Canada before the USA, or is that also dependent on any federal drug agency?

Canada has a completely different and separate regulatory body, and we have our approval for duo-OPH, which is the ophthalmic use pattern. It's come from the regulatory body in Canada that is the equivalent of the FDA. And we're in advanced talks with a distributor that will have national coverage and represent Duo throughout the whole Canadian hospital system. I hope that we don't encounter the same slow progress that we've had in India. I suspect not. It's a completely different marketplace and the pricing difficulties that you have perhaps in a developing country won't exist in Canada. So yeah, I think we'll be in business in Canada, if not before the end of this financial year, certainly in the first half of next.

Right, so I think we're going to take some questions from the webinar. Thanks for everyone for dialling in. We have received quite a few, so if we don't get through them all, I promise that we'll drop you an email with an answer. So let's start. First question. I recently read an article that stated hospitals are being sterilized and sanitized more efficiently thanks to AI robotic laser technologies. How does this leave the future business for TriStellar? Are any actions being taken to incorporate this information?

I'm going to make a guess that that question relates to UV disinfection. rather than laser but I think that's probably what the person who's asked the question is referring to so UV UVC light is effective against microbes it kills them but it has to reach the microbes to be able to do so it also has challenge in its application because you can't deploy it and have anybody in the room at the time so if you want to disinfect a theatre an operating theatre or ward you have to vacate it and you have to get your UV bank of bulbs and lights, lamps into the room and turn it on, but you've got to get out before the UV starts to flood the room. So people in our marketplace realise that to deal with that problem, what they should do is put a robot in the room, you know, like your lawnmower. You can buy Hoovers, can't you, that sort of go up to the skirting board and then they turn around and you can programme them. Well, they've done that with, they call them robots, and they've done that with the UV bank of UV bulbs. So what it means is every time you want to move where the UV lamp is, you don't have to open the door, go back in, reposition it, get back out of the room and so on and so forth. You can program a robot to travel around a room. so that the UV light can get to every surface area within the room. I think that's what the question probably is referring to. It's a good idea. And in combination with other disinfection methodologies like ours, it can be very effective. But the fact is you have to vacate the area. So if you've got a ward and it's a six bed ward, you can't have UV in and around the patient. And it's a sort of a once a day or in a deep clean situation where there's been an outbreak. Our products, and we're talking about our surface products here now, not talking about medical devices, our products are there to be used every five minutes, every hour, every half hour, whatever the regime is. Every time you touch a door handle, you deposit microbial presence upon it. So our whole methodology is based around repeat application of a very effective and safe disinfectant. Those UV processes are almost, I would say, almost exclusively used in a deep clean situation because of the way they have to be deployed.

The sales growth by geography slide is much truncated compared to previous presentations. Can you provide an insight as to how regional areas have performed, e.g. Central compared to Western Europe?

Yes. Well, we've combined them because the list was getting longer and longer and wasn't going to fit on the page. But what we can, with respect to Europe, what we can tell you is that Central Europe during the period, sales were 2.7 million. That compares to 2.8 in the prior period, so a very slight decline. Western Europe was 2.3 in the period versus 2.4 in the previous year. And Italy, 0.6, so £600,000 versus £400,000 the previous year. So we've seen a little bit of decline in Western and Central Europe, and it's all very much COVID-related. As I said at the beginning, Europe has followed the UK in its struggle with COVID, but we are seeing now that they're starting to come out of that situation. Italy is doing very well. Italy, we bought in-house from a distributor. We held a 20% stake in that business up until July 2019. We bought the business in-house and one of our existing staff, Italian staff, moved over and took that business over in terms of managing it. And she achieved very positive growth for us over the course of this last six months. So a little bit of a mixed bag but Europe as a whole has stood still but a bit up and a bit down in the mix.

And a slight follow-on from that, why have overseas distributor sales declined by 20%, particularly given that distributor sales in some newer areas have presumably increased?

I think I covered that in the presentation. So there was some stock building by some of those distributors, principally in Ireland, of the cash products early on in the first half of our comparable period. I guess it was enthusiastic purchasing thinking that our surface disinfection market was about to explode. Well it didn't and as a consequence there's a distortion in the year on year numbers.

Okay, brilliant. And I think we probably have time for one more. Can you talk about the impact on Tristil of the NHS waiting lists? Do waiting lists only include operations or do they include procedures where Tristil products are in use?

Well, the impact upon our business of COVID worldwide has been that hospitals have reduced the number of patient examinations that they've undertaken. Is it true in the UK? It's true in all of the markets we're present. In the UK, that manifests itself in an ever-growing waiting list. Those waiting lists are defined as elective procedures, which are procedures that can be scheduled. That's what elective means. Some of them will be surgical and we're not for the most part involved in surgical procedures and a number of them will be for scans ultrasound scans and small instrument endoscopies and other diagnostic procedures which we are involved with. So a proportion, and I couldn't begin to tell you what proportion it might be of that 6 million on our collective NHS UK waiting list, is latent demand for our products. Let's look at the ultrasound probe. Every time it's used on a patient, before it's used on the next patient, it needs to be disinfected. We have a large share of that marketplace in the UK and in other countries. So as hospitals resume the levels of service, and when I refer to levels of service, what I mean is the numbers of patient examinations that they were processing before COVID, when they return to those levels, the demand for our products will directly and immediately pick up. And we can feel that in the UK now, Our intelligence is via our sales teams. Yes, we can read about waiting lists and it's a huge number, but I can share with you that the level of sales activity, our access to hospitals for our sales people in the UK is on the rise. Hospitals have got waiting lists. There's a clear mandate from government. It's a political imperative for them to be reduced. and we will benefit from that in a pickup and demand for our products as this Covid situation recedes.

One further question from that same investor, why do you believe that Tristell can adjust prices to mitigate supply chain and other issues?

Well it's in part what we are witnessing is across many industries companies that have got pricing power increasing their prices whether it's in retail I was reading at the weekend that You know, fashion, high street fashion brands that we would all know are putting up their prices and considerably so Unilever, Diageo, all of those companies are exercising their pricing power and we're doing exactly the same. We have unique products. They're not generic products. So there is no comparable price match that would make putting prices up a difficult challenge for us. We're trying to be reasonable and sensible. And for the most part, the audience on the other side of the buying equation is understanding of the pressures that we're all under as suppliers.

Brilliant. Like I said, we have received a lot of questions, so we'll promise to get back to those investors. But that kind of wraps it up within the hour.

Very good. Well, many thanks to all of you.