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One FTSE AIM the stock I was looking at has a fast growing business and trades more overseas than in the UK.
Income has been growing rapidly. But the icing on the cake is the base the business has in the North American market.
If momentum builds in the US in the coming months and years, the stock is likely to perform well from where it is now.
Strong opportunities for future growth
The business is already stable, profitable and growing like crazy. How I love you, with the jam today and the power of things in the future!
That's right Tristel (LSE: TSTL), a global infection prevention company that manufactures and supplies products using its proprietary chlorine dioxide (ClO2chemistry.
The company's products go to hospitals, and about 87% of sales come from them Tristel symbol for decontamination of medical devices. Another top seller is the A repository brand of sporicidal disinfection of natural areas, which brings about 8% of the total sales.
There has been a wide acceptance of the company's offering and that is reflected in the trading figures for many years. Double-digit annual salary increases have become the norm. City analysts predict more to come in the current trading year to June 2025 with an increase of around 20%.
Today's report (October 21) for the full year to June 2024 is strong again “before what was expected“. The directors also included a positive outlook statement. That is not surprising because the business is developing a lot abroad.
The sale of the oceans and the profits
For example, today's figures show that the company has earned more revenue from overseas than from the UK. Just under 48% of revenue came from the UK and the rest from overseas markets.
However, those UK sales brought in an estimated 86% profit before tax, most of which came from the company's biggest customer, the NHS. That result suggests selling products in places like Australia, Germany and the rest of the world may involve significant costs. It is also possible that profit margins are low.
So another risk here is that the company's focus on international expansion may not be as profitable as expected. For example, the US market is a known graveyard for the hopes and dreams of many former UK companies. Tesco it is one that tried and failed to conquer the market.
Tristel said that today he is together “bureaucracy to buy more” in the US than expected. So it takes longer than expected for some customers to use the products. However, “the pressure is on” across the pond, and the American health care market is the largest in the world.
I think the reversal and uncertainty is showing in the stock price chart.
However, weakness has increased the rating somewhat. With the stock close to 388p, the forward price-to-earnings (P/E) ratio for the current trading year is just under 25. That's still a growth rate, but not overly so.
The American market is one international region where the company is developing. So, on balance and despite the risks, I'm going to do some deep research now with the idea that maybe I'll pick up a few stocks to hold for the long term.
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