Tristel plc (TSTL) Earnings Call Transcript & Summary

Good morning, and welcome to the Tristel plc investor presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. I'd now like to hand over to Chris Lee. Good morning, sir.

Good morning. Thank you. Good morning. Hi. My name is Chris Lee. I'm joined by my colleague, Anna Wasyl, our CFO, and it's a pleasure to be able to present the Tristel plc's audited results for 2026. I'd like to start by just drawing your attention to the disclaimer, which you can read at your leisure. And while you're doing so, I'd just like to tell you a bit about Tristel and what we do. We're a chemistry company who operates in the high-level disinfection space with a proprietary chemistry in chlorine dioxide. And our whole mission is to prevent powerful biocidal -- using our powerful biocidal chemistry is to prevent the transmission of microbes either from an object or a person to another. As I'm new to the business, this is my third month with the company. I thought I'd just do a brief introduction of myself. I've been in the med tech space for over 35 years. I started my career at Johnson & Johnson, where I spent 18 years across multiple specialty segments in both Europe, the U.S. and Asia and ended up my career there running the Ethicon franchise across Europe, Middle East and Africa. Since then, I've worked in multiple SME-type of organizations across the globe. And my most recent one was the CEO of Summit Medical, which is a U.K.-based private equity-backed medical device group. This is also my third public company that I've worked for as CEO or a Deputy CEO. I have extensive experience, particularly in the U.S. around customers, distribution models and channels and leadership of teams. And it's an absolute pleasure to be here as a member of the Tristel team. And although they're not my numbers, I'm delighted to present what's going to be an outstanding set of numbers for the business. With that, I'd just like to say that the Board remains unchanged. Obviously, Anna joined the Board a year ago, just over a year ago when she joined the business. And the rest -- I've just joined the Board and the rest of the Board remains as it was previously, and I'm grateful to them for their support and contribution to the business. I'd like to hand over to Anna now to talk about the financial performance. And in doing so, I'd also like to just thank the entire Tristel team for an outstanding contribution over the last 12 months to bring us to this point. Anna?

Yes. Thank you, Chris. Good morning, everyone. Let me tell you about a few financial highlights. Our Tristel team has delivered an amazing year with a double-digit growth, 10% growth in top line. Our revenues reached a record GBP 51.1 million and grew across the world in the U.K., our home market, by 5% and overseas by 13%. And Americas sales tripled. And of course, I will spend more time on these figures in later slides. Our adjusted PBT grew by 15% to GBP 11.7 million, adjusted EBITDA to GBP 15.7 million, and we have reached a great, very high margin of 31%. Adjusted EPS grew by 6% to 18.19p. In terms of cash, our operating cash flow reached GBP 11 million, was up 8% over last year and resulted in GBP 16 million balance at the end of the year of cash and short-term deposits. We remain debt-free, and we're planning to pay the final dividend of 9.23p per share, which we will pay in December of this year. And that will mean that the total annual dividend will grow by 5% year-over-year. I will now spend a bit of time on key performance indicators, which show our continuous strong track record. This last year, again, as I mentioned, we have grown 10%. This mostly came from volume, so GBP 4.3 million out of GBP 4.6 million of additional sales came from volume and the remaining came from price. That means that we've reached 10% CAGR of -- sorry, 10 years CAGR of 11.6%. And in terms of cash flow, I've already mentioned the figures on the previous slide. But what you can see here is this continuous strong growth, which gives us plenty of optionality for investments and progressive dividends going forward. Our profitability is very high with 31% of adjusted EBITDA remains very well comfortably above our commitment of 25% margin. I will walk you through our summarized P&L, our summarized income statement here. I've already touched on the top line growth. But what I would like to highlight here is that actually the 10% growth year-on-year looks even better when you look at the individual segments. So our medical device disinfection product grew by 11%, our surface disinfection by 27%, and it's actually our legacy products, which decreased year-over-year. Our gross profit increased -- so gross profit margin to 82%. That's reflecting the savings realized from bringing in-house the manufacturing of Trio Wipes, which was completed and announced previously and as expected, brought solid savings in the second half of the year. And of course, we'll continue delivering those going forward. Our gross margin for medical device disinfectants grew to 85% because of that project and our surface disinfectant grew to -- margins grew to 61% mostly due to volume. Our administrative and distribution expenses grew by 8%, and this is largely driven by increase in employees with GBP 18.8 million of our staff costs. That's related to increase in headcount. And as we've announced before, we continuously invested in commercial expansion. So we brought sales heads into the organizations and a few more sort of clinical-focused employees as well, and we will continue doing these investments in '27. Our depreciation, amortization and impairments line, you will see has increased to GBP 3.5 million by 48%, and this is largely driven by a one-off impairment of some of the intangibles related to surface line, and that was GBP 0.8 million. That brings us to adjusted profit before tax of GBP 11.7 million, which is a 23% margin, very, very solid. And finally, the tax line. So you will see here, we have the tax expense that has grown from GBP 1.8 million to GBP 3 million by 69%. And this is largely driven from -- by 2 things: firstly, by further reduction in patent box benefit; and secondly, by reclassification of our RDEC. So in the past, the R&D expense credit was recognized on the tax line as a reduced tax liability. And currently, it has been reclassified since '26 to other operating income, so above tax line. And since we consider that RDEC is not truly dependent on Tristel's actions and it's just dependent on HMRC policy, we decided to adjust it out from our adjusted profitability measures. And I will move on to balance sheet KPIs, where you will see that our net working capital remained at very healthy ratios at around 15%. And over the last 2 years, as we grew the business in total by 22%, the net working capital only increased by 16%, releasing a lot of cash into the business. Our return on capital employed is -- remains very robust at 27% in last year, speaking to our high operational performance efficiency and our ability to create long-term value for our stakeholders. And finally, our progressive dividend, which, as I mentioned, will increase by 5% and reach 14.91p per share in the year. I have a balance sheet slide here, but to be honest, I will spend very little time on it because it really serves as a reinforcement that we have a very healthy and strong balance sheet, which remains debt-free. We have seen 25% increase in cash and short-term deposits. Our liabilities remain quite low, and that gives us plenty of capacity to support our planned investments and growth initiatives. Now I would like to spend a little bit more time explaining where the growth came from. So U.K., our home market, grew by 5%. But similarly to the group level, the growth has actually been better when you look at the individual segments. So our medical device disinfectants grew by 8% in the U.K. and 21% for surface disinfectants, with the legacy products declining. When you look at Europe, Middle East and Africa, the overall growth was up 15% to GBP 24 million, and that really came from a range of markets. So starting from Germany, which grew by 8% in medical device decontamination products despite emerging competition on the market. We go to Italy, growing by 16%, also in medical device decontamination primarily. And that market grew significantly despite the fact that quite a few tenders have been delayed, which means that most of the growth came from increased adoption by, among our existing customers and moving the products to new departments such as ENT and cardiology. In Italy, we have also seen first signs of increased DUO ULT usage following the clinical studies and publications around HPV transmission with the use of ultrasound devices. That's really clearly an area where our strong cooperation with key opinion leaders and work on clinical studies helps us to raise awareness around these issues and to really influence the clinical practice. If we move on to France, also grew double digit in both medical device and surface disinfectants. We've seen significant gains, especially in surface disinfectant portfolio, where we have seen in a few hospitals were in difficult outbreak situations. We have -- chlorine dioxide products really outperformed competition and allowed us to transfer the whole surface disinfection practice to our products. Overall, we see that the surface disinfectant products globally have grown very strongly. And what we see there is that they differentiate very nicely because, not only because of higher efficacy than competing products, but also because of simplicity of use. So we have one contact time for all the different microbes, while competition refers to different contact times for different types of microorganisms, which in practice means that it's quite difficult to use the product to its full effectiveness. So we're really happy with the development there. Our Middle East team has also performed very well with 24% growth year-over-year. And in APAC, we saw a similar performance to the first half of the year, where it was quite a varied picture. So in our mature markets such as Australia and New Zealand, we've seen quite flat performance over the last year with some competitive headwinds in Australia. In New Zealand, the medical device decontamination portfolio actually grew slightly. However, the legacy products declined and sort of dragged the whole growth down. In Southeast Asia, Malaysia and Singapore grew very strongly, 21% and 16%. So very happy with that performance. And if you look at Americas finally, in Americas, we've reached GBP 0.8 million in revenues. And I would like to spend a bit more time and explain the different revenue streams related to Americas business. So firstly, the direct U.S. product sale. That's the line where our newly launched OPH product is reported, and you can see really great growth there. So the GBP 340,000 is mostly consisting of the growth in OPH product. And the second line, which is the royalties line, that's related to Parker's sale of Tristel ULT. So these are our royalties that we receive on that sale and that, of course, flows through our income statement at 100% gross margin. Our distributor sales in Americas coming mostly from Canada and Chile grew by 54%, and that overall meant that Americas grew 202%. And now I would like to pass to Chris, who will tell us more about the U.S. performance.

Thanks, Anna. U.S. has been obviously one of the high priority markets for us. And there are 2 parallel segments we run in the U.S., one on the ultrasound business and one on the ophthalmic business, and I'd like to touch on both for you now. So with the ultrasound business, we obviously work with our strategic partner, Parker Laboratories and our royalty income has grown to $355,000 in the last year, and procedures have grown from 300,000 in '25 to 736,000 last year. So it's a very significant increase in the number of procedures that we're now having Tristel products used on. There are approximately 50,000 procedures in the U.S. in this space, which just gives you some measure of the potential that we have ahead of us here, and we're looking to see how we can exploit that further. The way the U.S. works in this space is that new accounts start with small volumes as the infection prevention clinical teams trial, develop training protocols and update procedures and observe [ competency ] and performance before they get rolled out and then it becomes a management practice after that time for utilization. So to give you a good working example here, one of our biggest customers in Florida has had 10 user sites in 2024. There are now 33 user sites at the end of this financial year. And a huge amount of work has been done obviously to drive adoption and growth in that particular institution. So that gives you a sense of the time it takes for us to take an initial interest through to an exploitation of the technology across multiple sites in the hospital. What we have done in the last year is we've managed to increase our pipeline significantly. So we added 190 new user sites in the last 6 months since the March report, which means there are now 275 open opportunities in the pipeline, with 175 in different stages of completing value analysis and are in trials and implementing training. So I'm very, very excited and confident about the future of Tristel ULT in the U.S. with Parker as our strategic partner over there. And I'm also encouraged by the feedback that we've had from our customers on the ground with the testimonials. And you can revisit at your leisure. But I think if I was to try and summarize what these customers say, the 3 things that come out across the board here is one is the convenience that Tristel offers them. Secondly is the time reduction that it takes. And thirdly is just that the impact it has on their systems, on their compliance, on the Joint Commission and the overall approvals makes this a very easy technology for them to adopt, and we're actually delighted to receive these growing testimonials from our customers. Now moving on to the OPH side, the ophthalmic side of the business, and this has been a huge success for us in the last 12 months. So if I look at the revenue here that have increased to $260,000, which exceeded our initial expectations with 111,000 customer procedures performed across this marketplace. So a very substantial increase with some very significant institutions, both eye institutes and major hospitals who have adopted this technology, which gives us great encouragement for the potential for this product across the U.S. Again, the significant number of new accounts have been opened, 73 at year-end that are now using the product, and we have 304 open opportunities with 207 trial and evaluating, with 97 of those currently engaged. We have strong partners in Advancing Eyecare and Keeler, and we are looking to add a further distributor to our ranks very shortly, who will be very much focused on the government opportunities around Veterans Affairs and the military, which is another significant stream to our value that we hope -- that we're hopefully able to open up. Just to graphically show what that looks like for the business a year ago, this gives you a visual representation of where our live users were across the U.S. and the pipeline that we have built behind us. And if you now overlay what that looks like at the end of this financial year, you can see the huge increase we've had across both the pipeline and live users. And this is largely as a result of the recruitment that we've undertaken. So we have 2 new sales reps, one in the Midwest, who's been with us for about 7 months now, and one on the West Coast who just joined recently. And I draw your attention particularly to the Midwest, where you can see a vast number of new accounts that have been established or opened or trials taking place. And we can see directly the impact that our clinical specialists are having on the marketplace. We also have got more strategic partnerships with the device manufacturers, and we've now got compatibility with some of the major providers in this space. That also significantly helps us to drive adoption in this particular area. Finally, I just want to share a bit about the multicenter study that we've been carrying out, that we've been supporting to create best practice recommendations for reprocessing in ophthalmology. This study has now been complete and the lead authors are looking for an appropriate place to publish this work, which again, I think will be hugely beneficial for us as we look forward to driving future growth in this space. And once again, some nice testimonials from very significant institutions in the U.S. that have highlighted just how convenient it is for Tristel OPH to support the ophthalmic high-level disinfection opportunity at point of care use, which has not been available in the U.S. before and that gives us huge encouragement for this segment moving forward. With that, I'd like to pass back to Anna, who will talk about progress made in a couple of the areas of the business that we've been focused on.

Yes, I will tell you about some important developments, and I'll start with education. In July, we have launched Tristel Academy. And why have we done it? Well, we believe that buyers who understand our chemistry are our best defense against competition. And even though our chemistry is clearly extremely effective, it is very complex and it requires explaining. We have launched this academy as a virtual initiative to turn published studies, clinical studies, published articles into very specific kind of practical guides for IPC leads, practical answers to questions they may have. It's not only about our chemistry, it's also about guidance, the infection regulations, which are quite complex. And we believe that by explaining and educating, we can truly build a better understanding for how -- why Tristel is the best product in the market. We have currently been live in 8 regions, but we are planning further expansion. And we have seen so far really great engagement. So we see a lot of interest in the sites, and we believe that this has been truly a very good step forward. And now I would like to present to you our new product, which is called Unifoam. And that's a product addressing hospital drains. So hospital sinks and drains are now recognized as a major reservoir of bacteria and drug-resistant bacteria in hospitals. Why is that? Because there is biofilm forming in drains, which is sort of a protective slime layer that allows the bacteria to live and thrive and which makes it very difficult for chemicals to kill them. It's not a theoretical problem, though there are real-world consequences and outbreaks related to the drain living -- bacteria living in sinks. For example, what we have -- if you just look at some of the U.K. headlines, there was an inquiry in Scotland related to infections in child cancer patients that were related to actually hospital drains. The U.K. Health Security Agency, which mandated reporting of drug-resistant organisms since 2020, has already registered 22,000 of such cases. The product that hospitals use today is a wide variety of things, it's chlorine, maybe peracetic acid, hot water, cold water, different measures, but they are really ineffective against biofilm. And Unifoam, there is really a special proposition, quite unique because, of course, chlorine dioxide, as a gas molecule, has a better ability to penetrate the biofilm and kill the bacteria. It's a product, which the key opinion leaders have been asking for, for a while. And here, you can see Phil Norville -- Dr. Phil Norville and Jincy Jerry, who are some of the very recognized voices in the U.K. in this -- in IPC community, really asking for a product which could be used consistently to make a difference and prevent the creation of biofilm or destruction of the biofilm once it builds up. And therefore, we are very happy that we have done a soft launch of the product already in September in a U.K. conference for IPC, the IPS conference in Leeds. And we've seen great interest from customers there with 14 NHS trusts registering for trials just on this conference itself. The trials are ongoing. And we believe that in January, we will bring to the market the first phase market -- so a few core European markets in the U.K. The product will be launched then. And then, of course, as the registration and regulatory approval continues, it will spread to more countries. And finally, I would like to spend a little bit of time on 3T. You have seen us presented it before and what has happened there. The product has really developed tremendously in the last year. So as you know, hospitals have had to evidence their decontamination process for years, especially in the U.K., especially in some markets. And we believe that they've obviously found a way to log it, whether it's a manual log or digital log. We think that just offering a digital log is not enough anymore to be a true differentiator. And that's why 3T is aimed at becoming more of a real virtual member of the IPC teams. And what does it do? Well, it allows to not only train and certify staff, but it also allows to verify that the right product is used on the right device, that the product hasn't expired. It enforces the steps of cleaning and decontamination, and it can also track devices through its life and finally provide IPC leads with not only ability to monitor how different users disinfect and how the devices are disinfected, but also can provide dashboards and reports that they may want to use as preparation for audits. And commercially, this is really important for us because as the compliance of the hospital rely more on 3T, it becomes harder to switch away from our chemistry as well. So what we've done in the last year, as you know, in the Capital Markets Day in July '25, we have said that we will launch the product in '26, and we have done so. So end of June, we have gone live with the product in the key markets that cover 80% of our current 3T users. So that's U.K., U.S., Australia and New Zealand. And already now the 3T is a product which is quite widely used. So it's used by more than 270 customers. Just in last year, 1/4 of the decontamination cycles were logged in it and 48,000 -- more than 48,000 staff certificates were issued. And we believe that now with the introduction of the paid tier, we will signal the value to customers. We will, of course, encourage daily usage that will bring reliance and that will really build the product loyalty as well. And finally, the multiyear subscriptions can actually help us contract in a way the customer to continue using our chemistry throughout the years that they use in the software. So it's really kind of a reinforcing product. And with that, I would like to pass back to Chris, who will tell us more about the outlook.

Thank you, Anna. So I think Tristel is in a fantastic place. I mean, not only have we developed a proprietary chemistry, which underpins a great business that's been built so far, but we operate in a space that's highly attractive. If you just take ultrasound as an example. A lot more of the ultrasound is moving to the point of care well beyond what used to be all centrally reprocessed through imaging departments. And there are more image-guided procedures being done with probes that need fast, compliant, high-level disinfection, either close to or at the bedside. And all of that builds a bigger marketplace for us to play in. The other key significant thing is guidelines. Every time guidelines are altered or changed with chlorine dioxide or Tristel is named, that opens the space and the opportunity for us to grow our market. And just over the last year, we've had 3 more guidelines that have been released. We've had the American Institute of Ultrasound in Medicine, who have specifically mentioned chlorine dioxide as an approved method for high-level disinfection of ultrasound probes. We have the American College of Emergency Physicians and the Maternal-Fetal Medicine Society as well. Both of those have referenced chlorine dioxide as a technology for the disinfection of the space, and Tristel has been named specifically as well. So these are all hugely beneficial for us as we seek to expand and get adoption across the marketplaces that we play in. Infections remain extremely high profile. Ever since COVID, there has been a much greater awareness and knowledge around infection prevention. And with the antibiotic resistance growing with 1 in 6 infections now being resistant to antibiotics, it keeps compliance in real focus and therefore, guidelines changing contributes to our opportunity. We've also added a further 20 device manufacturers to our list of devices that have been approved for compatibility. So we now have 72 medical device manufacturers that we work with, and that relates to over 2,150 actual individual models of products, whether they're scopes or ultrasound probes that have got compatibility with Tristel, which means the consumer, the customer has got confidence that the product not only works but is safe and efficacious to use. When budgets across many health care systems in the world are becoming tighter and more difficult, capital projects are becoming harder to find and therefore, point of care and high-level disinfection is a very viable alternative that's been attractive to our customers. So in terms of the outlook, I think we've got huge opportunities that we can focus on. We certainly want to make sure that we exploit the significant opportunities in the U.S., where ultrasound and ophthalmology remain significant growth opportunities, not just this year, but over the coming years. And we're looking to try and accelerate that and put more headcount in to drive that growth as we move forward. In addition, we're looking at all of the markets that we currently play in to see whether, a, we can grow faster in the existing markets or whether we can actually enter new markets that may take longer time because of the regulatory perspective to enter, but ensuring that we've got medium to long-term growth opportunities around new markets that we enter. We'd like to underpin all of that with a program of work that looks at Tristel having a clinical leadership position across the globe with key opinion leader engagement, podium presentations and clinical support that wraps a halo around the business that demonstrates that Tristel is a significant partner in the infection prevention space, and we're supported by the professional bodies and by the clinicians who operate at the highest level within that market space. Within our existing opportunities, the markets we currently play in, some analysis has demonstrated to us that there is a significant opportunity just by bringing all of our direct markets up to the median distribution of the number of products bought by customers that would give us an opportunity somewhere in the magnitude of GBP 40 million just by focusing on that piece. And there's further opportunity up to GBP 60 million from our own internal benchmarks by looking at the market that we operate in with a range of maturity levels if we were to focus on driving more revenue potential for existing customers. This is probably the fastest single way for us to grow the market alongside the new market expansion that will provide longer-term growth and the R&D pipeline, again, which is something that we'll be looking at for long-term growth potential organically. Anna has touched on Unifoam and 3T Pro. These are both new revenue streams that we're excited about. Unifoam is in a completely unmet space that has enormous market potential and opportunity, and we're very excited to see what that does. And the development of 3T Pro has given us a whole new opportunity to both offer our customers additional features and benefits around not just compliance, but also education and learning and also is a huge protective barrier for our business going forward. And finally, we'd like to fuel our future growth by having a much more robust R&D pipeline. And in that context, we're looking to put a team together that is much more connected from a product development perspective to our customers and to their needs and understanding so that they can translate through our development teams and our scientific teams to develop products that will give us a future pipeline of growth both from our organic pipeline and from our existing portfolio. So I think in terms of our financial commitments, I think we can firmly commit to the promise, which we made out to 2030 of revenue growth that's not less than double digit on an annual basis, an EBITDA margin that exceeds 25% and currently is significantly above that and a progressive year-on-year dividend growth policy. So in summary, I think results remain in line with expectations and the business is firmly on track to meet its financial targets. We're committed to the U.S. growth, both with our partners and with our direct team and are looking to accelerate investments into that marketplace in particular that will allow us to get there quicker than we've been able to achieve so far. But we are encouraged by the performance of the last 12 months. We expect to increase penetration across selected existing markets and our new product launches and our digital platforms will give us significant new growth revenues as well and support that. So all in all, I think Tristel is well positioned to deliver long-term shareholder value. With that, I would like to say thank you very much indeed for your attention and for listening to our presentation today, and we'll be delighted to take any questions you might have.

[Operator Instructions] I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. Paul, if I could just hand over to you just to chair the Q&A, and I'll pick up from you at the end.

Thank you very much. Chris and Anna, we have a couple of questions pre-submitted regarding competition out there. So how would you -- or how do you compete against trophon?

Yes. Trophon and Nanosonics is clearly a very established competitor. But I think it's important to remember that it very much operates in the disinfection space in capital systems. They don't really operate or play in the manual high-level disinfection area. And they continue to grow their business and help the industry generally by establishing disinfection across multiple sites in the hospital as the standard of care and norm and that compliance to that grows for all of us and grows for the market. And we've had a lot of success with moving the high-level disinfection to the manual operation. And some of that has been at the expense of some of our competitors, but a lot of it as well is just bringing high-level disinfection to areas that were either employed low-level disinfection previously or not complying in any way before as well. So I think there's plenty of room. It's a big enough market space. It continues to grow, as I alluded to. And we're very comfortable with the position that we've been able to achieve in the marketplace, and we'll continue to focus on what we do really well.

And then what about other technologies? So ultraviolet lamps and other technologies regarding sterilization. Are they beginning to impact you?

Yes. I think UV-C, there's a lot of interest in UV-C and the potential for these systems. But I think there are some well-known shortcomings that have been identified in studies that have been done with UV-C. And I don't -- I think there's a lot of the jury's out on that and there's a lot of questions remain just about the viability of UV-C because inevitably, with the static systems, they cast shadows around the environment with which they operate. And it's very difficult to establish just how in the real-world environment, how well they work, and they're actually performing the task at hand. And I think a lot more work needs to be done. We're certainly working on a lot of studies ourselves to show our efficacy and what we can prove with our high-level disinfection technology. And we look forward to more evidence as that arises from that space.

You've had a bit of time to get your sort of feet under the table. One of the questions is, have you identified anything having come on board that you would like to change or like to implement?

So I've identified 2 things that we're already doing. I'd like to do faster and do more of. And those are that I'd absolutely like to drive acceleration of the U.S. opportunity. I think we've had a very encouraging year. Our confidence level in the ophthalmology business is huge right now given the success we've had in the last 12 months. And we're really looking to see how we can enhance the outstanding team we've got there in the U.S. to drive a much superior performance. On the ultrasound side, I had a recent visit with Anna and myself to the U.S. and met with our strategic partner, Parker, there. We're absolutely aligned on the potential of the opportunity there, currently discussing ways we can drive growth across the board, both with additional clinical specialists, but also with a much more robust clinical platform to support the business going forward. So that's one of my areas that I think we can really do more of. The second one is -- relates to the second part of that is that globally, we identified before my time that we should be a stronger clinical advocate for infection prevention and that Tristel is a leader in that space. So we've hired a dedicated clinical director, and we've hired a team of clinical portfolio leads. And across that group of people, we'll be looking to connect much closer to the customer, produce more clinical evidence in support of infection prevention using high-level disinfection and chlorine dioxide and also to get a much more prominent place at conferences and meetings on the podium in presentations and clinical presentations around Tristel and its overall performance and contribution to that area.

Thank you. A few questions on cash, so probably for you, Anna. Obviously, it's not gone unnoticed by many of the investors that you've generated quite significant free cash flow in these set of results. So there are questions about what are you going to do with these cash reserves? The first question is, are you considering another special dividend?

Yes. So as you said, we have closed the year with a record high balance in cash. And at the moment, we really want to keep the optionality for our investment. So we do have some needs around the investment in commercial areas as Chris has already mentioned. So increasing commercial plan in the U.S., increase in clinical -- kind of clinical outreach and engagement with key opinion leaders and sort of clinical generation of clinical evidence. So that will be our key investment areas. We will also have some need for capital for CapEx going forward, and that would be related, for example, to Unifoam, our new product that I spoke about. We currently are planning to produce it on our existing line. But of course, if the product is as successful as we hope, we will be building -- investing in a separate line. And of course, there are other potential opportunities. Maybe, Chris, you want to mention a little bit more on your views as well.

Sure. Yes. I think one of the obvious areas is there a potential for Tristel to engage with more M&A activity. Historically, we've had a track record of growing markets very nicely with competent distribution partners that we then engaged and brought into the Tristel family. And that served us very well in terms of the growth we've achieved at this point in time and they remain an important part of our business going forward. But I think we'll obviously have a diminishing return and a limited opportunity to be able to bring more of those on board. So we would like to look at technologies that are either adjacent or in our space, whether that's chemistry or whether that's other products that would be additions and complementary to our portfolio or potentially even enhancing our market entry into certain tricky markets like Japan or China or Brazil, for example, where we could get a better foothold quicker by making some investments in those spaces. So we're actively looking to see what could be done at this period of time to complement all the other investments that we touched on.

So I think you've answered -- answer a couple of questions that we've already got on here, but there was a specific question about the priority of those. Are you able to give an idea of priority? And of course, as well as the word special dividend, buyback also comes back -- comes up in many of the questions. So is there a way to prioritize at the moment? And are buybacks on the table?

So let me touch on the priority piece first, and I'll let Anna talk to the buyback. So the prioritization process, and I'm in my 10th week, and I've had a chance to get around all of the business and speak to all of our teams. And we're formulating a good idea and an understanding of where the opportunity lies for us. And that's exactly what we're doing now is doing that prioritization of those opportunities. But I'm absolutely certain that will incorporate more focus and attention around our existing markets where we think we've got significant opportunity for growth, both with our existing portfolio and those new products that we touched on. And we'll be looking at how we can accelerate that growth in those markets. And clearly, the U.S., the biggest medical device market in the world with some of the most attractive prices in the world as well. We've made good progress, but we think we can do an awful lot more. So I would say those 2 are the most significant priorities with certainly making some bets around long-term market entry and building an R&D pipeline that gives us long-term growth.

Yes. I can address maybe the buyback part of the question. So of course, we get this question quite often from investors, whether we are planning that. Some people may say that arranging for a share buyback actually sends the message that the management think the shares are undervalued, which we can definitely confirm that is the case. But on the other hand, it may also mean that we believe that we don't have a more attractive way of investing it ourselves that would generate even higher returns for shareholders. So we believe that actually being -- to be able to move a needle in terms of share price, we would need to spend significant amounts of cash, and that would really limit our ability to have the options to invest. And actually, it's not even a given that the share price would be really impacted. And we have a great example actually of our competitor, Nanosonics that we referred to before also on this call. They have gone -- they have spent significant amounts of cash last year and this year on share buyback, and they continuously run a share buyback program. And their share price is currently at 40% below last year. And why is that? Because the market values more the ability to deliver on the results on the guidance in line with expectations and deliver growth rather than the share buyback itself. So I think it really gives us a strong feeling that we need to invest in the business.

But I would just add I accept the shareholder view that, that capital deployment needs to take place. And that's absolutely uppermost in our minds of how we utilize that in the best possible way for shareholder return.

Another question comes back to the point you made earlier. You obviously, you were talking about priorities and about how investing in the U.S. growth opportunity. There was a question here about, would you add people in the U.S. in the next 12 months? And would they be sales? Or is that just Parker's job? Would you put more Tristel feet on the ground?

We would do both. I think, yes, the ultrasound side is Parker's job. And we've had a very open dialogue about how we grow that business faster. They are absolutely supportive and open to further investment, in particular, around clinical specialists who can help drive adoption. I referred to my example earlier with the Florida institution where we built a very nice business across multiple user sites. We believe addition of clinical specialists would help us drive that faster. And that's certainly one of the areas that we're looking at. But also unquestionably, the confidence we have in the ophthalmic opportunity, we are currently looking and surveying just how we can accelerate that with more both sales specialists, clinical specialists and marketing support in order to drive that further, even though we've already put 3 additional heads on the ground in the last 12 months.

Do you mind if we stay on cash, Anna? There was a question about where do you keep your cash? In terms of cash reserves, how do you hold them?