Tristel PLC

Good morning and welcome to the Tristell plc interim results investor presentation throughout recorded presentation investors will be in listen any mode questions are encouraged and they can be submitted anytime just by using the Q&A tab that's situated on the right corner of your screen simply type in your questions and press send the company may not be in a position to answer every question it received in the meeting itself however the company can review all the questions submitted today and publish responses where it's appropriate to do so before we begin I'd like to submit the following poll and now, like Tanya, to Chief Executive Matt Sassoni. Good morning to you, sir.

Good morning, and good morning to everyone that is joining us online today. Thank you ever so much for taking the time to listen to our 2024 interim results. I appreciate many of the people that are joining us this morning are aware of the Tristell story and what we do. But for those that are new to Tristell, I'm just going to take the first couple of slides to explain who we are, what we're about and what we do. So our company is an infection prevention company. Our purpose is to prevent the transmission of microbes from one object or person to another. How we achieve this is by applying our very powerful chemistry, which is chlorine dioxide, to the target environment, surface, or medical device. Our products fall into sort of two categories, really. We have our tri-style range, which is focused on the decontamination of medical devices. And we have our cash range, which is focused on the disinfection of hospital surfaces. You can see there we have an ambition to be a leader of the Tristell leader in the point of care decontamination of medical devices. And with regards to cash, our ambition is to be the global market leader in the niche of sporicidal surface disinfection. So not the entire hospital surface disinfection market. When you look at the split of our two businesses, you can see the Tristell represented 87% of the H1 sales, and you can see which kind of target medical devices that we apply our chemistry to. And we're mainly focused on non-lumen or single lumen medical devices that are heat sensitive, that can't be sterilized or decontaminated by normal means. And in the last 12 months, our chemistry has been used over 23 million times for the medical device decontamination. Then sort of newer portfolio, the cash portfolio, that represents 8% of our H1 sales. And we are focused on sort of the more general market and surface disinfection. And you can also see there, we've put for the first time, the number of kind of cleaning events or disinfection events with our cash range, which is 20 million. So it's a large number, but obviously generating much smaller revenues. How do we win? Well, on the tricel, it's always our value adds and our value proposition which customers really appreciate is the convenience. We have the ability to provide disinfection at the point of care. We do it in a very fast and efficacious manner with contact times between 30 seconds or two minutes, depending on the product. Our chemistry is safe and presents no risks to the users. And really, things that set us apart is our compatibility. Over the years, we have been tested and approved to be used with thousands of different medical devices. So, you know, we have a very compelling offering. We do have competitors, and these are a variety of forms. Some are manual, like soaking, and others are automated, like vaporized hydrogen peroxide. On the cash portfolio, we win again through the unique qualities of our chemistry, demonstrating higher efficacy than the products they use today, faster speed of action compared to what they're using today. And then we're addressing some of the needs that our users have. If we take antimicrobial resistance, for example, some of the cleaning products that they're using today are actually adding to the problem, whereas this is something that we do not contribute to. And also some of the chemistries they use today are quite toxic and damaging to the environment. And again, this is something that we're able to differentiate ourselves with regards. So, you know, we have some great products and an exciting market. And I myself have been with the business now for five months. So I thought it'd be worthwhile for me just to spend a little bit of time to tell you my impressions after the first five months of being with the business. First of all, it's an exceptional company, not just with regards to our people and our products, who are talented and outstanding, but also the value that we're able to deliver to our customers. And then operationally, we're excellent. We have a robust supply chain, we have first class manufacturing, and a great R&D team and a team that supports us on our day-to-day operations. We have been a business that's created the market for ourselves. We've been tremendously successful and comes with that, our competitors. And we see that these competitive pressures are increasing. It means we need to sort of sharpen our needle and to maintain our success. And what we're doing there is focusing on our execution. But I don't want people to get too concerned about the competitive pressures. There's always been competitors for our TriStell offering. We're just having to deal with more local players that occasionally pop up. But the team is well-versed in what we need to do and ensuring that it doesn't distract us too much from our day-to-day activities. When we look ahead, it's a very exciting future for the business. I can see a significant runway for growth ahead. In markets, we are taking share. We're seeing customers use high-level disinfection more and more, so the adoption is increasing. And we also recognize that, you know, we are penetrated in a few markets across the globe, but there's many other new markets waiting for us to open up and for us to start selling our chemistry in those. So, you know, the near term opportunities are very exciting. Over the last few years, we've invested significantly in our surface disinfection market. And this represents a significant opportunity for us. But also, we've got to take some care as we go forward for this market. Our secret success over the years has been focusing and being very targeted on profitable niches. And we need to apply that same rigor to a surface disinfection market. And I'll talk a bit more about this in some of the slides coming up. The near term opportunity to drive global penetration. Yeah, basically, what I'm trying to say here is our greatest opportunity for growth is going to be, you know, within our existing markets with our existing portfolio, you know, we are far from being penetrated. And we have the UK market as our core home market. But when we look across the globe, we see great opportunities to drive greater growth and also drive greater growth in the UK too. in the mid to long term we see the potential to unlock major new markets and everyone is very much focused on the usa i will provide an opportunity on the usa but the headline is you know we feel very bullish about our success that we've had so far and the future and we believe that we can win and win big in the usa market

Morning everyone, this is Liz Dixon here. I'll run through the financial highlights with you here and we're looking at a set of results here where we've delivered strong performance in this first half. It's in line with both the market expectations but also with our own internal forecasts, our internal targets. Running down the highlights themselves, revenue increased by 8%, up to 22.6 million. That's 9% of constant currency, which is, of course, slightly behind the growth rates that we have achieved in recent times. But we know where the issues are that have reduced our revenue growth percentage, and they are all fixable problems. So we feel that... Returning to double digit growth is definitely achievable for us. But running down the P&L, then we can see that adjusted profit before tax increased by 19%, which we're delighted with, up to £4.9 million in the half. Adjusted EBITDA was up by 14% to £6.3 million, and we achieved an EBITDA margin of 28%. Adjusted EPS sat at 8.17 pence per share. It was negatively impacted by an increase in the effective tax rate, which increased from 10% up to 25% as a result of patent box relief ending in this financial year. But nevertheless, our interim dividend has increased up from 5.24 pence to 5.68 pence per share, payable on 11 April with an ex-dividend date of 20 March and record date 21 March. And that leaves us with cash and deposits, which increased up to 11.7 million, up from 10.8 in the comparable period. And just a reminder, the company has no debt. Over on the next page, operational highlights. Well, Matt joined us in September last year. And I think we can state very confidently that it's been a successful transition. And he shared with you his first impressions. During the period, we made our application, our submission for a second US product clearance under a 510K. So this is for Tricell OPH. It's a high-level disinfecting foam for the decontamination of ophthalmic devices. We received a request back from the FDA for additional information. And we're... In the process of compiling that test data, it is not a surprise to be asked to provide additional information, but we're going through the process of collating that and we will submit that back to the FDA shortly and still expect clearance by the summer of this year. And then a couple of other operational highlights that refer to the regulatory landscape that we're working within. The first is that we have been included in the revised American National Standard for our Tristell Alt technology. So that's an update which now makes clear to users of Tristell the product that they can use a foam or a wipe that contains chlorine dioxide. And of course, we are the only supplier of those types of products of that technology. And they can happily use those products within the US. And then the second regulatory point relates to Germany. So we've had much slower growth in Germany over the course of the last couple of years as a consequence of a question mark hanging over whether wiping a medical device is a validatable methodology for decontaminating it in between patient use. Well, now the regulators in Germany have agreed that wiping is a validatable methodology methodology and so they've issued a new guideline which means that customers can now validly use it without any concern. Moving over onto the next slide, looking at sales growth by geography. Well, you can see we've got a couple of areas that we have had some issues with, namely Australia, also within the Western Europe line, France, and Hong Kong. So there are three areas that we need to pay a little bit of attention to. I'll run through them one by one. In Australia, we We have invested in our sales force to build it out, having had a few individuals leave the company over the course of the last year. It does take a little while to get new salespeople up to speed. So we have seen flat growth in Australasia, but we expect that to rectify itself as we move into the end of the second half and into the first half of next financial year. In France, similarly, we've had a change of leadership in the sales team. And in both markets, we also have competitive pressures, which Matt touched upon. But none of these things are permanent problems. They're all fixable issues. And we have confidence that in both of those markets, we can return to growth in the short term. And in Hong Kong, we have seen, again, zero growth in the period. And that's predominantly because of our surface products, where what we see is where there's an outbreak or an epidemic, particularly in Hong Kong, then there's very swift take-up of highly efficacious products to decontaminate surfaces, such as our cash range. But then over time, when cost pressures rise again, then we see the use of the product slowly dissipate. Well, that's a pattern that we're quite used to now in Hong Kong. But we are looking to roll out our newer cash products out in Hong Kong to address that. But looking at the more positive side of things, Central Europe, on the back of that guideline change, we see 13% growth driven by Germany. In Southern Europe, 14% growth. That's predominantly Italy. But we are going direct in having... uh set up our own operation in spain with effect from the first of january so we expect strong growth in spain as we go through the rest of the financial year malaysia and singapore also good growth and um the americas of course it's the um we're showing flat growth but that's because of the mix there of royalties product sales into the US and also Latin and Central America are playing an important part in that growth but all looking good in the US and Matt will tell you more about that as we go through the presentation and of course the UK is the big one here seven percent growth which we're very pleased with because last year we had a high level of growth as a consequence of price increasing But now growth comes almost exclusively from volume increases in the UK, which just goes to show that even in very well-established markets, there's always new opportunities for our products.

And I just want to jump in here quickly before we move off this slide, just to sort of say, look, We appreciate the 8% year-on-year growth. We are pushing hard to get us back into the double-digit top-line growth. We feel that's very important. Let's think about tri-star that we've been able to do over the years, and so we need to get back to. But when you look at this breakdown by geography, you can see it's not a million miles away, and it's not very difficult to identify what needs to happen in order to get us back up to that level. if we talk also about some other actions more tactical actions that we're putting in place with regards to sort of like our markets and and addressing uh you know some of the challenges we have with regards to australia and france for example you know it's also changing incentives uh over the past uh the incentives have been focused on local profitability and now they're focused on local revenue and some other actions we have taken in order to get ourselves back up and motoring again in those markets. So as we look Over the 10-year sales record, we've had a tremendous track record of strong growth. That continues. Over the last few years, price increase has been exceptional. They've been a big driver of our growth. That's been normalized and we've returned to more standard levels of price increases. and we remain on track to deliver our three-year financial targets. So looking towards the second half and looking towards the future, how are we going to drive greater growth in our business? So for the Tristell range, I've listed down here four key levers for the business. The first is geographical expansion. We all recognize the opportunities that we have in the US. This is a very exciting market where we've just got our clearance. And we'll talk a lot more about that in some of the forthcoming shares. Slide, sorry. With regards to expanding our reach, well, we continue to invest in direct operations. Liz made reference to Spain, but we're also going direct to Austria, and I'll mention a bit about India as well. And we're also looking at new markets, so exploring what are currently untapped markets such as Japan and Latin America. Then, you know, it's about our existing markets and how do we expand our application and our product application and extract more from what we're doing. Well, you know, we have a great opportunity with our existing portfolio and existing markets and we're far from done. We have a large runway. But we're also looking to get existing users to spend more with Tri-Style and create more value by adding more products that they can use, whether that be cleaning products. Some of the new products we're working on are digital traceability. and broaden adoption beyond our core ultrasound into other markets. We've got good penetration already into ENT, but there are other sort of like heat sensitive products that would benefit from using our chemistry and benefit from being high level disinfected. And we continue to invest in that expansion. What we need to do, though, is maintain our clinical differentiation and continue to invest in that area. You know, we're all consumers and physicians, health care practices, practitioners are no different to us. You know, if we have a colleague or a friend that recommends something, we immediately look to go and purchase that. And that's the same happens in health care. And having that influence and having our users sell a product for us is a key sort of like growth creation and saying that we need to continue to invest in. And that's something that we will be spending more money in order to push that as a strategic lever. And our fourth strategic leader is working with the original equipment manufacturers, the OEMs. What do we mean by that? Well, you know, we are very proud about our level of compatibility. But what I've seen in the first months with the company is some real examples of best practice. And I can think of many countries around the globe where we work hand in hand with these equipment manufacturers. And they are essentially an extension of our sales force. How does that happen? Well, we are present at their sales meetings. We're training them with regards to the tri-stell offering. And when those equipment manufacturers are going in and talking to the customers about their technology and they get faced with the question, how can we disinfect this? They immediately think of Tristell and are promoting us at that point. In the same way, we're actually in some countries, we're providing their staff with Tristell products. Because, you know, whether it be the sales staff or the engineering staff, they're going in and touching their products in the healthcare arena. And we're providing with our Tristel products so they can go in and decontaminate the devices and use it there. So, you know, it's great to see when I go to exhibitions around the world, trade shows around the world, The equipment manufacturers booths and their stands actually have Tri-Stell products on it. It's great to learn of examples where the sales reps and the engineers actually have the Tri-Stell products in their bags to protect themselves. And it's even better to learn and hear and say we need to do more of have those salespeople talking about Tristell at the point of sale when they're selling the equipment in the first place. So that's a good growth lever for us as we look to the future. Then on our cash range. It's interesting, you know, we talked about Hong Kong and we talk about sort of like there being periods of time when infection control is more at the forefront and we've all lived through COVID. But when it's not sort of like immediately front and center, this market tends to revert back to much more sort of commoditized offering. That being said, it is a large and a significant opportunity for us. And why do we say that? Well, there are areas of the customer base which are always focused on infection prevention. It's always front of mind. And these tend to be more versatile. high impact areas like the operating room, intensive care units, neonatal units, dialysis centers, oncology units, where infection prevention is at its most critical. And those sites are prepared to invest more in infection prevention. They value what we're able to bring a lot more, and they are prepared to pay our premium pricing. And that's something that we need to really focus on and keep. The secret to Tri-Cell success over the years has been identifying profitable niches, being very focused on those profitable niches with our very differentiated offering, and then targeting upon that. And that's exactly what we intend to do with our cash portfolio. What we have seen in the first half of the year, and it's something for us to be cautious about, is we have this full portfolio now, we have this wide range, And we have this proposition that's very attractive. And naturally, you want to do a whole house conversion. So you want to go into hospital, into a trust and get every possible department using our cash technology. And on the face value, that sounds very exciting. And it's it seems like the obvious thing to do. You're locking up the competition. What we have found, though, is that this tends to be very resource intensive. And this is where we must ensure that we have the right balance. And why is it so resource intensive? Well, when you start to do the whole hospital and you're trying to take on all of the staff in all the areas, there are not hundreds, but there are thousands of individuals that need to be trained. There are some very ingrained practices that are hard to give up. and we have experienced you know essentially huge percentages of our sales team being tied up for weeks upon time, trying to reach the different parts of the hospital and without a great amount of return on it. So when we assess the opportunity, we're excited by it, but what we're doing is just sharpening our approach to ensure that we're getting the best return on investment with our cash portfolio. So let's focus a bit more on some of the geographical opportunities we have. If I start you on the right-hand side of this slide and just talk a little bit more about Spain as an example. Over the years, Tricel has been very successful of using distributors to build up our business. And then when they reach a meaningful size, we then go direct ourselves. And Spain is another example of this, where we've had been working with a distributor very successfully. We've got to a point where we believe that would be beneficial for us to go direct. That's a process that we've been undertaking. And we've been recruiting and getting our own infrastructure in place so that when we went live in January, everything was ready and set. And we were in a few weeks in, but it's all going very well. We're very excited by it. And, you know, we can really focus on transitioning that business across before we then focus on some of the sales opportunities that we see and start to grow our presence there greater. We're looking to do that in other European markets. And Austria is the next market that's been identified for us. And we continue to look at other opportunities we've got. But there are large untapped markets that are open to us that we're also looking at. So Japan is an example of this. Excuse me. Tricel has never been present in Japan. In fact, none of our competition really has been present in Japan, but there's still a need out there. And Japan is the third largest healthcare market in the world. They tend to be able to pay a premium price for medical devices. And so on face value, this looks very attractive. It's always been scary from a regulatory perspective, but we've been investigating that market and creating a path forward where we feel that actually now is the right time to start to look for commercial partners in Japan and exploit the opportunity that is there. India, another large market that on face value offers a lot of opportunity. Tricell has tried over the last few years with distributors to get traction in that market. We now decided to take a slightly different tact and that's by recruiting directly with our own people there, but We all know India is a very large market, and I don't want to scare investors to think that we're going to try and cover the whole of the Indian market. In fact, we're taking a very small and targeted approach. So we're focusing on the cardiology ultrasound market. These are transesophageal echo ultrasounds that are used in cardiac surgery. This is the premium part of the market. Currently in India, they are using soaking technology. We've recruited two individuals from one of the largest equipment manufacturers of cardiac ultrasounds probes in India, and therefore they come with extremely strong customer relationships, deep knowledge of the market, and geographically we're being very targeted from a product segment we're very targeted and we feel that we can build and get some traction in the indian market in the near term using them the middle east continues to be an area of the world where we're getting great growth and great success And the team there are doing a great job. And in fact, in the second half of this year, we had a great wins in that region, primarily in Kuwait, where we've won two very large tenders for the Ministry of Health now. And that's a part of the world that we continue to see a greater adoption of our chemistry and will continue to invest in to get greater growth from. Latin America is a bit like Japan, an area of the world that we've never been present in, and we feel that we have got some opportunities here. We've been investing a lot in creating local clinical evidence. That's something that takes time, but we believe that now is the right time to explore the commercial partners and to drive our market entry. and then finally we get to north america which is our largest opportunity and i'll now talk about that in a bit more depth so over the years ultrasound has always been the prize that we strive towards it's taken us a long time to get there we finally got our approval after a lengthy de novo process and now it's about commercial execution On the face of it, royalties of £37,000 do not seem to be something that we can really claim to be a great success. But we are encouraged by the traction we're getting in that market. It's a very large market, as I said. But that £37,000 actually translates through to £50,000. thousand procedures. What that shows is we're getting a presence there, we're getting repeat use, we're getting a number of customers where the adoption is spreading. And that's where I really want to focus the investors thoughts and talk more about. But as Liz mentioned earlier, Normally, it takes us years to get guidelines to endorse our technology. We spoke about Germany, where those guidelines, up until now, we've been present in the German market for a long period of time, well over a decade. We've been present in the US market for 12 months now. And to already see the guidelines come out and recognize Tricel and actually have it as a recommended means of performing high-level disinfection is a real feather in our cap. and a real strong lever for us to drive greater growth. And so everything we're seeing about the activity we're doing is really giving us a lot of confidence about the US market. Our partner, Parker Labs, has invested significantly. They're keeping up with that level of investment. They believe in the opportunity too. And we're seeing the actions that we're putting into place now accelerate the sales cycle. Our local team is working with them side by side. supporting them with regards to the sales calls, but also supporting them with regards to the sales management, being present in their sales meetings, being present on regular calls to share best practice and drive our success in that market. So where are we at? Well, I made reference to the fact that we're present in 200 health systems. Quite frankly, the leads coming to us and opportunities is not a challenge. We've got more opportunities than we can deal with. What we need to do is really focus down on our land and expand strategy. And what do we mean by that? Well, we've been getting penetration into these healthcare systems, but rather than skim the market, we want them to fully adopt Tristell. Rather than Tristell be used on sort of a niche area of a few intracavity probes, We want to be used on all of their intracapity probes. We want to be used on their vascular access ultrasound probes as well. And that's what we've been focused on. And what we're hearing from those users is we are easier, we are faster, we are more user-friendly. They love the fact that they don't have to leave the patient room. Some of the feedback has also been about the fact that ergonomically, we're easier for the users. And we're seeing that now. So if I talk you through some of these examples, we just pulled out a handful here. In Boston, We got initial penetration at one account and they adopted us for their vascular access probes. Now that started to spread. We're now being used in neurology. We've been using the ICU. We've gone from being present in one hospital to now being present in four hospitals. And we're seeing that that penetration in that system not only come as a result of our Parker sales efforts, but also organically as well. You know, the physicians are talking to each other. They're praising our products and our chemistry and that's spreading to wider use. In Orlando, we're seeing the same where we are in a large health care system in Florida, Orlando. And, you know, after a lengthy sales process, we're now spreading adoption in their outpatient clinics and are now going into their hospitals as well. At the same time as trying to get this deep penetration within the health care system, we recognize that we want to try revenues as fast as we possibly can. So we have been working on some of the private practices. Why have we been doing that? Well, when you're going into the hospitals, you have a very lengthy sales cycle. It's typically 12 to 18 months. When we're going to these private practices, that sales cycle could be much shorter. It can be three to six months. And so we're trying to get that good blend. But we are getting some good success in these private practices. And it's providing us with those quick wins. So that's encouraging. But as we focus on our success in the ultrasounds, what I want to leave you with is this. Whilst 37,000 pounds sounds like a small number when you translate that through to the actual number of procedures that's 50 000 we are getting a lot of traction and this is a flywheel we will start off small we'll start off slowly but it it is picking up pace we can see on a monthly basis uh the sales are increasing and we are very encouraged and also very bullish about our ability to get success and the opportunity in the US ultrasound market. Switching gears, but staying within the US, let's talk about ophthalmology, which is another area that is open to us. This is a slightly smaller market. It's got 16 million procedures on an annual basis that we believe would require high-level disinfection. That compares to the 50 million in ultrasounds. But this is a market that is more of a greenfield that, you know, Compared to the ultrasound market where you've got an established player, the ophthalmology market is more greenfield where they're typically using soaking technology or a very low level disinfection wipe to sort of solve their needs. So it's an unmet need today. We applied for a 510K clearance from the FDA during H1. we got a request for some additional information. That is not out of the sort of usual standard practice for the FDA. Typically, when they come back and ask questions, you hope that you already have the data they want on file. But in this case, it did require us to do a little bit more of a clinical study in the US, so an in-use clinical study. That's underway. We've been working with the FDA to ensure that what we're doing will satisfy the request for information. And therefore, we feel confident that once we've completed that clinical work and presented the data back to the FDA, they will grant us with clearance sometime. Our expectation is that will be summer 2025. What's our route to market? How are we going to get success? Well, you'll notice in the presentation deck, and if you download it and look at it after my speech, on the last slide, we do show a time study that was performed in the US comparing standard practice uh to our offering and you can see there you know the efficiency that we bring and the reason why a customer will want to be swapping to our oph products but with regards to the route to market we are looking at a a mixed sales model And what do we mean by that? Well, for ultrasound, we use Parker Labs and we chose them because they seem they are a perfect partner for the ultrasound market. Parker is synonymous in ultrasound. It's very well known. They've got a very high presence. They have existing relationships and, you know, working with them, it meant that we weren't a unknown going to the market. But Parker is not focused on the ophthalmology market. This would be a new ground for them. So we will continue to work with Parker from a manufacturing perspective. We may utilize them in some means as a non-exclusive distributor to enable us for logistics and invoicing. but we will work with some ophthalmology focused or distributors so you know people that already have a presence in this market but they will also be on a non-exclusive uh perspective we want to retain a lot more control uh as we go forward in the us with ophthalmology And we have identified eight large hospital users who are very keen to move forward with our products, which we will manage directly with our own resources that are already present in the US market. And they will be our people on the ground. And as we get success, we will invest further and create our own direct presence. But I don't want people to misunderstand me on the call. We're not going to go out and recruit a sales force from day one. We're going to be using distributors and our own presence we have and then build upon it as we get success and have a very targeted approach. But we look forward to getting the approvals in the summer. We have learned from what happened with the ultrasound approval. So what happened there was we were going through a de novo clearance. You know, you're not going to sort of like do things at risk whilst you're awaiting a de novo clearance as the first in time, in kind clearance. So what happened there was we got the clearance in June 2023. We didn't start manufacturing the products until sort of November 2020. later that year. And then, you know, we made, Parker made investments in the sales team, you know, only post getting that clearance. Because we're going down the 510k track, you know, we have a much more defined path and a defined visibility to get the approval. And therefore we can start at risk to get ourselves ready so that once we get that approval, we can hit the ground running and there isn't a substantial delay between approval and commercial operations. So in summary, the fundamentals of the business are very strong. We are profitable, cash generative, debt free and continue to pay a progressive dividend. The opportunities are very clear in the medical device portfolio. They are significant and we remain excited about the runway ahead of us in that market. The surface disinfection, as we go forward, we are refining our commercial approach on some of the recent learning, but it's a large market. There are areas that really do value our premium products. offering and we feel that we can get a very good return on our investment in those markets. Looking ahead, we are continuing to unlock new geographies and the US being the main one of those, but our growth will come from our existing products in our existing markets and the US will just augment that as we go forward. So finally, the business is on track to its current market goals, financial goals. And thank you for your time. That concludes the presentation and we'll now open up for questions.

Matt, Liz, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions, and you can do so just by using the Q&A tab that's situated in the top right corner of your screen. Just while the company take a few moments to read the questions that have been submitted today, I'd like to remind you that the recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Liz, at this point, if I could hand over to you to read out the questions, that'd be great, and then I'll pick up from you at the end.

Okay, thank you very much. We've had quite a few questions about tariffs in the U.S., so what effect will potential U.S. tariffs have on exports? Well, just a reminder to you that the product is manufactured within the U.S., so predominantly the revenues, the royalties that we receive will be totally tariff-free, so we don't see that as an issue. In fact, it acts as a barrier to the alternatives which are not manufactured within the U.S., so that's a positive for us. How have the Parker USA sales team been deployed and what is the reporting structure for them? Well, they are deployed throughout the US. They are Parker's sales team and so they report into Parker management, but we do work very closely alongside them, supporting them, going on sales calls with them. So it's very much a joint venture for us out within North America. Next question. In the October 24 presentation, specific hospital groups were named as piloting Tristell products. What's the current situation regarding these pilot projects?

Yeah, they continue. As we said, we're being actively used in 200 systems. I think what I'd really like to reinforce to the investors is, is we're being very focused. In fact, we've identified seven healthcare systems that if we were to get full penetration in those seven healthcare systems, the numbers would just sort of like blow away everyone's expectation. So we continue to manage our pipeline very closely. We're on top of everything that's going on, we're tracking it, but really our focus is expanding within those markets, those systems where we already have some traction already. So yeah, we're making good success and good progress and all the ones that we mentioned in September, October.

Thank you. Next question, what revenues have been derived from the USA from July to December? Well, there's a table within the interim statement that you can see the exact breakdown of North America and the US itself with respect to royalties. Also, product which we have sold to Parker, which they then distribute out, and also Canada and Latin America. So you can find that detail within the R&S itself. Why is reported EPS falling? Well, EPS has been impacted by the tax rate, and this covers another question as well. The company has now, with the expiry of its patent for the use of a chlorine dioxide foam on a wipe, then that means that patent box has now been removed as a relief for us. And as a consequence, our effective tax rate has fallen or has increased from 10% up to 25%. And having said that, we continue to work on product development and we do continue to apply for new patents and indeed extend the patent with respect to TRIO, which is the wipe system. So for now, we don't have that level of patent relief that we had in the past, but it certainly has helped us enormously over the years and we will work to replicate that with future products. What do you consider a safe level of cash for unexpected events, and what do you intend to do with the surplus? Do you, Matt, have any plans for expansions, either bolt-on or more strategic? Well, I'll answer the first part of that, which is to say that with our current cash balance of 11.7 million, then we've got plenty of comfort there. Certainly, a good half of that can be considered to be excess to our operational requirements, but I'll hand over to Matt to talk to plans for expansions and bolt-ons.

No, absolutely. You know, we're always looking at what's the best deployment of our capital to give the greatest return to to our shareholders. So that's something we're always focused on. You know, as you can imagine, the business gets presented with opportunities all the time. And, you know, we we review them and we make our decisions accordingly. we won't rule out anything right now but i would just like to reinforce that you know we remain committed to investing in in the business and and generating the best returns for shareholders we can thank you

Okay, so next question, what is R&D spend as a percentage of revenue? Well, it comes in around the 4% to 5% mark if we're looking at capitalised R&D. Of course, we can capitalise product development, pure research goes through the income statement. And we do do a little bit of that, but that's not included in that calculation, but would probably be another £100,000 or so. But it's sitting at the 4% to 5% mark. If your emphasis is on moving to direct sales, then how can you incentivize distributors in new markets?

Absolutely. You know, in some markets, it always makes sense to go through the distributor model. Some markets lend themselves to being a distributor model. You know, over the years, Tristell has worked with distributors and then taken the opportunity to go direct where it's right. This is something that, you know, We're not alone in doing. It's a model that's used by many people around the world. So when we're working with distributors, they get excited by the opportunity of the tri-style offering. And we work with them to build the business up as best as possible. Then when we do decide to go direct, we obviously work with that distributor at that time. So it's something that we do regularly. hand in hand. But the focus has always been and always will remain on getting traction in those markets and getting success.

Thank you. So we have two questions left. So if you want to get any more questions in, then do it now. But to work through those two, do the competitive pressures mean that you lose greenfield contracts or are you substituted?

I wouldn't say that we are losing business. You know, it's just it's a distraction and a frustration. You know, it's a frustration that you can get some small local players that come in and make claims which are quite fictitious. And you have snake oil salespeople out there, you know, sort of like saying whatever they want to try and get the sale. And we have to work hard to go into those hostels and provide with the evidence and demonstrate that not everything is on face value and you need to look a bit deeper. So I don't want to alarm investors and say that we're losing business. That is not the case. It's just a frustration that we have to deal with companies out there making claims that really they shouldn't be making. last question for today will your ultimate goal be to do your own manufacturing in the usa no i you know um partnering with parker was a you know the best decision for the business um they they are they make you know i was trying to work i think but the the volume that they're making with regards to ultrasound gel they are extremely efficient i don't think that's something that we we could have replicated with a small manufacturing site in the US. So working with them was definitely the right way forward. We have a contract in place which works very well for us and enables us to make a significant amount of profits in the local market. So it ticks all the boxes. Wonderful. I think that concludes our questions.

Perfect. Matt, Liz, thank you very much for answering the questions from investors. Of course, the company can review all the questions submitted today, and we will publish those responses out on the InvestorMeet company platform. Just before redirecting investors, provide you with their feedback, which I know is particularly important to the company. Matt, could I just ask you for a few closing comments?

Absolutely. Well, thank you so much for attending and listening today. Let me leave you with this. Tristel has delivered a strong financial performance in the first half of the year, with adjusted profit before tax increasing 19% to 4.9%, supporting an 8% increase in our interim dividend. Looking ahead, we see significant... growth potential in our core medical device business, using geographic expansion as our primary driver, and our largest opportunity remains the U.S. market, and we are committed to building upon that. We are confident in our ability to maintain and build on our current trajectory, leveraging and expanding our current global footprint and innovative product portfolio, and the business remains stronger than it ever has done. So thank you for your time. And as you said, if you have any follow-up questions, please send them in.

Thank you very much.

Matt, Liz, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but some should be greatly valued by the company. On behalf of the management team of Tristell PLC, we'd like to thank you for attending today's presentation and good afternoon to you all.