We are somewhat surprised by the decline in the share price of Byotrol given the fact that it is involved in infection prevention and control. The shares have fallen back from 9.75p last autumn and we believe that at the current price the shares offer good value.
Byotrol is quoted on AIM and is a specialist infection prevention and control company. The company operates globally in the healthcare, industrial, food manufacturing and consumer sectors. The company has a number of products that have been used to combat coronavirus such as chemical and sanitising wipes, surface disinfectant, hand rub and hand sanitiser. The company also supplies detergent and disinfectant to clean medical devices as well as foam spray and airborne disinfection products. Other products include odour elimination products for pets, products for the equine and agricultural sectors and veterinary instrument and equipment cleaner.
The most recent results issued by the company cover the six-month period to 30 September and these revealed a significant improvement in performance. Sales trebled to £6.7m compared with the prior year (2019: £2.2m) and were in fact more than the £6.1m generated in the financial year to 31 March 2020. Adjusted pre-tax profits for the period were £1.1m compared with a loss in the same period in 2019 whilst earnings per share on the same basis were 0.25p. At the end of the period the group had net cash and cash equivalents pf £1.7m and this was despite a large increase in working capital as stock levels and debtors increased due to the increase in revenues.
More recently the company has announced that it has developed and externally validated a new test for determining whether cleaning and sanitising products have long-lasting efficacy against viruses in real-life use. This is clearly important when looking for protection from COVID-19. The new test could therefore help minimise the spread of the virus when used in conjunction with the cleaning and sanitising of shops, schools and offices when these re-open.
The company has expressed the view that its market opportunities have increased significantly over the last few months and it expects its full year results to reflect the progress that has been made. If the company can even match its first half figures, then earnings per share for the year would be 0.5p, putting the shares on a p/e ratio of just 11.4x. We believe that the company will exceed first half earnings, and this would make the shares look very cheap given the company’s prospects. BUY.
RECENT TIPS – The highs and the lows
For a flavour of our performance recently, we list below some of our recommendations that we have made in the last few weeks.
Journeo – 117.5p at close on 23 March (tipped at 70p on 25 January) – gain of 68%.
*The company continues to win new orders which have prompted the share price rise.
Duke Royalty – 38.75p at close on 23 March (tipped at 29,75p on 16 February) – gain of 30%.
*Recent announcement of dividend increase
LPA Group – 74.5p at close on 23 March (tipped at 91p on 26 January) – a loss of 18%.
*Customers deferring orders until later in the year
To read about some of our other recent top performing share tips, head to https://www.cityconfidential.co.uk/recent-top-share-tips
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