Shares to watch: Tristel tipped to clean up

WITH so-called superbugs such as MRSA continuing to pose a major challenge for hospitals around the world, healthcare firm Tristel is seeing strong demand for its products.

Sales in its health division, which produces germ-killing wipes, sprays and other disinfectants, increased by more than 50 per cent to £5.5 million in its latest six month period. The turnaround in the company’s fortunes since it embarked on a restructuring programme to focus on key areas of potential for its products has resulted in shares in the company tripling from the lows of under 20p seen in the past year.

The recent growth in sales has been led by the firm’s wipes products which it believes is the most widely used decontamination method in UK hospital departments such as ENT, cardiology and ultrasound. It has gained footholds outside the UK, particularly in Germany, Italy and Australia, and in 2012 launched a range of products for animal health, including disinfectants, hand hygiene products and odour eliminators.

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Analysts at Equity Development, which last week initiated coverage on the Aim-quoted stock, said it expects revenues and adjusted earnings per share to rise from £13m and 2.56p in this year to £15.7m and 3.88p by 2016. They also believe Tristel’s 2.3 per cent dividend yield has scope for expansion too.

“In terms of valuation, this science rich stock trades at a discount to its peers, which we believe is unjustified given Tristel’s superior prospects,” said the research report.

Equity Development currently has a 68p price target on the stock but said that if the board achieves its medium term target of 15 per cent annual growth then their target price increases to 85p.

n Investors in video editing technology specialist Forbidden Technologies will be eager for any update on early progress at the firm’s newly established US subsidiary when it reports final results tomorrow.

Forbidden, whose key product ForScene provides cloud-based facilities for broadcasters to store, review and edit professional video footage, set up the California office to take advantage of the growing demand for sports and news video clips.

At around 30p and valuing the firm at around £38m, shares in the firm have made little headway in the past six months but signs that the new subsidiary is leading to increased take-up in the US could spark investor interest.

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