Shares in infection prevention and contamination control specialist Tristel (TSTL:AIM) are trading just above pre-Covid-19 levels. This is despite the company’s total addressable market increasingly significantly, driven by increased awareness and demand for infection prevention caused by the pandemic.

There is significant pent-up demand for patient examinations which were put on hold during the pandemic. Resumption of examinations should see the company get back to growth after the temporary lull in 2021.

More importantly, the company has barely scratched the surface of the global market opportunity for its patented products. The strategy is to replicate UK success overseas and increase the global footprint.

There is good growth potential in India and South Korea from the company’s recently approved high-level disinfectant Tristel Duo ULT for ultrasound devices.

In the US Tristel is perusing marketing approval to sell its high-level disinfectant for ultrasound probes and ophthalmic devices. It has appointed Parker Laboratories to manufacture and supply the products and hopes to submit its regulatory application by 30 June 2022.

Tristel’s products are used by hospitals and laboratories to effectively and safely disinfect non-invasive medical devices used in ophthalmology and endoscopy and any device which needs disinfecting between uses.

The company has patented chlorine dioxide formulae that are recognised by regulatory bodies worldwide as high level and safe to handle disinfectants.

The unique products come in the form of wipes and foams which means they can be applied manually. The company generates its revenues by selling consumables.

Competitors on the other hand sell machines which use liquid soaking chemicals or gaseous vapours to protect the user from the disinfectant.

Tristel’s unique products and patent protection give the company competitive advantages which should support increased penetration of the global market over time.

Recent share price weakness is due to a combination of temporary factors which have impacted the business in the past 18 months.

Hospitals over-stocked all disinfectant products amid panic buying at the beginning of the pandemic which caused a build-up of inventories.

During the lockdowns most outpatient departments were closed as priority was given to Covid patients which impacted volumes of device consumables sold by Tristel, although sales of surface disinfectants compensated in the early part of the pandemic.

As the world normalises post-pandemic, increased awareness of the need for effective, safe infection control should provide a durable tailwind for Tristel.

It made £5.4 million adjusted pre-tax profit in the year to June 2021, down from 2020’s £7.1 million. FinnCap forecasts pre-tax profit will move up to £6 million in 2022 and progress to £6.4 million in 2023.

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