REG - Creo Medical Group - Final Results
23/05/2022 07:16
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RNS Number : 3506M Creo Medical Group PLC 23 May 2022
Creo Medical Group plc
("Creo", the "Group" or the "Company")
Final Results
Building momentum: Strong strategic and operational progress
Creo Medical Group plc (AIM: CREO), a medical device company focused on the
emerging field of surgical endoscopy, announces its audited final results for
the 12 months ended 31 December 2021.
Financial Highlights:
· Total sales in the period of £25.2m (FY 2020: £9.4m)
· Cash and cash equivalents of £43.5m at 31 December 2021 (FY 2020:
£45.1m), including £34.3m net raised through Placing and Open Offer in
September 2021
· R&D expenditure in the year was £12.9m (FY 2020: £10.2m)
· Operating loss of £29.9m for FY 2021 (FY 2020: £23.5m) including
£2.6m share based payments (FY 2020: £0.7m), in-line with management
expectations
· Net assets of £73.3m at 31 December 2021 (FY 2020: £62.8m)
Commercial Highlights (including post-period end):
· Over 1,000 Speedboat Inject procedures performed to date
· Speedboat Inject procedure volumes doubled over previous year
· Pipeline of clinicians to be trained under Clinical Education
Programme has doubled
· 25% increase in the Group's direct sales force since the start of 2021
· New market penetration with multiple cases of Peroral Endoscopic
Myotomy ("POEMS") procedures in the US using Speedboat Inject
· Heads of terms ("HoTs") agreed with multiple partners, with advanced
discussions ongoing
· Strengthened IP portfolio with 376 granted patents and 870 pending
patents
· Health economic study indicated that savings of up to £10k could be
saved per Speedboat Inject procedure versus traditional surgical outcomes,
with the NHS saving over £2m cumulatively to date
· Positive outcome on first pancreatic ablation using MicroBlate Fine
Operational Highlights:
· Strengthening of supply chain and R&D capabilities through
acquisition of Aber Electronics Limited ("Aber") in November 2021
· Fully integrated Albyn Medical and Boucart Medical into the Creo
family, operating in-line with expectations under the Creo brand
· Completion of the purchase of the freehold of Creo House, Chepstow,
and the adjacent building for £4.25m to support the Company's planned and
sustained growth
· Opening of US office on the East Coast in Danbury, Connecticut, to
provide a base for US operations and enable in-person clinical and education
programmes
· Established APAC Hub based in Singapore
Craig Gulliford, Chief Executive Officer, commented:
"It has been a year of strong progress for the Group, as we continue to build
momentum and make progress against our mission of improving patient outcomes
through our 'Build, Buy and Partner' strategy. We doubled our pipeline of
clinicians who are to be trained under our Clinical Education Programme, with
a significant proportion of those trained during the year now being product
users. Our US office opening, as well as the purchase of the freehold of Creo
House, and the post-period end opening of our Singapore regional hub, have all
been key steps for the Group's commercial growth and the increased education
of clinicians across our target markets.
"Our acquisition of Aber Electronics during 2021 has added specialist
expertise to our team whilst enhancing a key element of our supply chain. Our
prior acquisitions of Albyn Medical and Boucart Medical have proved to be
successful, with both having expanded our commercial footprint across Europe,
and are now fully integrated within the Group.
"We have signed non-binding heads of terms with a number of carefully selected
partners, in order to leverage our core Kamaptive technology in therapeutic
areas that the Group is not already operating.
"Looking ahead we remain well-positioned to continue our commercial growth and
will continue to evaluate further potential strategic acquisitions. We expect
that as restrictions related to the COVID-19 pandemic continue to ease
throughout 2022, we will see increased rates of clinical education and
increased rates of use of our technology in elective cases."
Creo Medical Group plc www.creomedical.com (http://www.creomedical.com)
Richard Rees (CFO) +44 (0)1291 606 005
Cenkos Securities plc +44 (0)20 7397 8900
Stephen Keys / Camilla Hume (NOMAD)
Michael Johnson / Russell Kerr (Sales)
Numis Securities Limited (Joint Broker) +44 (0)20 7260 1000
Freddie Barnfield / James Black / Duncan Monteith
Walbrook PR Ltd Tel: +44 (0)20 7933 8780 or creo@walbrookpr.com
Paul McManus / Sam Allen / Mob: +44 (0)7980 541 893 / +44 (0)7502 558 258 / +44 (0)7867 984 082
Phillip Marriage
About Creo Medical
Creo Medical is a medical device company focused on the development and
commercialisation of minimally invasive electrosurgical devices, bringing
advanced energy to endoscopy.
The Company's vision is to improve patient outcomes through the development
and commercialisation of a suite of electrosurgical medical devices, each
enabled by CROMA, powered by Kamaptive. The Group has developed the CROMA
powered by Kamaptive full-spectrum adaptive technology to optimise surgical
capability and patient outcomes. Kamaptive is a seamless, intuitive
integration of multi-modal energy sources, optimised to dynamically adapt to
patient tissue during procedures such as resection, dissection, coagulation
and ablation of tissue. Kamaptive technology provides clinicians with
increased flexibility, precision and controlled surgical solutions. CROMA
currently delivers bipolar radiofrequency ("RF") energy for precise localised
cutting and focused high frequency microwave ("MW") energy for controlled
coagulation and ablation via a single accessory port. This technology,
combined with the Group's range of patented electrosurgical devices, is
designed to provide clinicians with flexible, accurate and controlled clinical
solutions. The Directors believe the Company's technology can impact the
landscape of surgery and endoscopy by providing a safer, less-invasive and
more cost-efficient option for procedures.
For more information, please refer to the website www.creomedical.com
(http://www.creomedical.com)
Chairman's statement
Like most PLC Chairs, I would have rather not been talking to shareholders
about the COVID-19 pandemic for a third successive year. The CEO statement
below details how restrictions on travel, limited access to hospitals and
delays in elective procedures have unavoidably slowed the clinical adoption
and commercial rollout of our CROMA Advanced Energy Platform around the world.
But despite these challenges, we have further broadened and deepened our range
of products during the period to treat a longer list of medical indications
and so improve the lives of a broader group of patients. This continues to
stimulate interest in adopting CROMA from our clinical champions, especially
in Europe and the US where patients are benefitting from Creo's technologies.
Governance
We have not allowed the COVID-19 pandemic to hinder our corporate governance
efforts, which remain front and centre of our work. In the 2021 Report and
Accounts, which will be published in May, we set out details in respect of our
continued ESG commitment, information regarding our s172 compliance with
examples from the year, as well as the summary of our compliance with the
Quoted Companies Alliance (QCA) Corporate Governance Code. As we continue to
grow, both organically, through acquisition and through partnerships, the
Board is unanimous in its view that it is strong governance that underpins the
success of our activities and provides a sound framework for the business to
operate within.
Management and staff
As in previous years, the Board would like to applaud our management team and
all our employees for another year of important strategic milestones. Together
they have shown perseverance, flexibility and inventiveness in developing
Creo's products and their international markets, despite the headwinds
described above which have limited the rate at which we were able to train new
users globally. Thankfully, our rightly celebrated colleagues in the vaccine
sector have been remarkably successful in developing and rolling out effective
vaccines in our priority UK, Continental European and North American markets.
We have been encouraged to see the cautious lifting of travel and other
restrictions in our key markets in recent months.
Integration of acquisitions
The successful integration of the two acquisitions completed in 2020 has been
a strategic priority during the year. This nicely illustrates our Build - Buy
- Partner strategy in action and lays the groundwork for significant
shareholder value creation. The Board thanks the commercial teams led by David
Woods and Luis Collantes who have worked tirelessly together across
geographies, time zones and specialities to leverage Creo's growing and unique
set of strengths and skills.
Albyn Medical and Boucart Medical are both well integrated into the Group and
have been rebranded under the Creo Medical umbrella. This offers an unrivalled
one-stop solution across Europe in the fields of gastroenterology, urology and
endoscopy, backed by strong customer service and Creo's outstanding
innovation, to deliver a unique and winning combination to our customers. The
timing of the acquisitions was ideal as it has given the business a sound
commercial footing that would not have been feasible to build organically
during a global pandemic.
Shareholders
It is customary for the chair on behalf of the Board to thank fellow
shareholders for their continuing support during the year under review and we
continue that custom sincerely. The successful Placing and Open Offer raising
£34.3 million (after costs) in September 2021 was another important strategic
milestone. Executed in volatile and challenging small cap capital markets, the
placing has widened our already strong and deep shareholder base. We
appreciate the patience and support of our longstanding shareholders and
welcome our new holders onto the share register.
The Company is deploying the proceeds of the Placing to accelerate our growth
strategy and further product development. With a strengthened balance sheet we
can continue on the path to being a truly global independent MedTech innovator
able to operate in a market led by much larger US and Asian companies. We need
these resources to optimise the opportunities for our world class technology
and products to compete with competitors, support our partners in all
applicable markets and strengthen our position in negotiations with potential
licensing partners.
We encourage active dialogue with all shareholders to ensure our strategy and
business model is well understood and that we, in turn, understand the
priorities of our shareholders. Notwithstanding the restrictions on in-person
meetings, both the Executive and Non-Executive Directors have maintained and
developed frequent contact with shareholders backed by regular updates via RNS
and plan more of the same in 2022.
In November, we announced the appointment of Numis as Joint Broker alongside
our Nominated Adviser and broker, Cenkos Securities. This provides
shareholders and potential shareholders with widened equity research coverage
and enhanced international share trading facilities in the Company's shares.
ESG
Ever since our foundation, Creo Medical has taken seriously our responsibility
to the environment, our diverse stakeholders (led by the patients) and to
ethical, transparent and well governed business practices. As we grow
internationally, we are putting in place a sector leading ESG framework which
is outlined in our 2021 Report and Accounts.
Outlook
Creo Medical continues to innovate, to educate and to commercialise. While
nothing can be guaranteed in an uncertain world, the Board looks forward to
further updating shareholders during 2022 on important product advancements,
meaningful commercial progress and landmark partnerships. The sound progress
made over the past year underpins the Board's strong confidence in the Group's
opportunities in 2022 and beyond.
Charles Spicer
Non-Executive Chairman
22 May 2022
Chief Executive's Review
I am immensely proud of our progress this year, despite difficult
circumstances in all our regional markets as COVID-19 restrictions persisted.
During the year we continued to make strong progress against our strategic
objectives and build momentum through sustained commercial progress. Revenue
from the Group's core Creo product portfolio is growing and is in-line with
management's cumulative revenue forecasts at the time of IPO in December 2016
despite the adverse conditions over the last two years.
We have seen significant growth in commercial orders and adoption of Speedboat
Inject in the US and Europe. Pleasingly, we have made significant progress
against our target to leverage our IP through our Kamaptive brand by agreeing
Heads of Terms ("HoTs") with a number of carefully selected partners to
provide access to our advanced energy in large and growing markets where the
Group is not currently operating.
The opening of the Group's US headquarters during 2021 has helped to support
Creo's commercial roll-out in the key US market. Post-period end, we also
opened our regional hub in Singapore to support the commercial roll-out of
Creo's products in the APAC region and this is expected to satisfy the backlog
of demand, following numerous distributor agreements being signed throughout
2021. In addition, Creo completed the purchase of the freehold of Creo House,
our head office in Chepstow, along with the adjacent building, to support the
Group's planned and sustained growth.
These all represent important steps on our journey to commercialisation. Our
successful Placing and Open Offer in September 2021 positions us well to
deliver our strategic objectives and take the business to the next stage of
its development: to strengthen our product portfolio and enhance our Kamaptive
Advanced Energy Technology for licensing and partnerships.
Building momentum
We have taken great strides in delivering against our three strategic pillars:
Build, Buy and Partner.
Build
Over the course of 2021, Creo's pipeline of doctors waiting to be trained
through our Clinical Education Programme has more than doubled compared to
2020. This demand continues to build.
The number of global training centres across our direct markets increased
threefold during 2021. Creo trained a significant number of leading clinicians
in 2021, who are now product users, and the Group expects this number to rise
in 2022.
Even at this early stage, clinicians have identified additional uses, for
Speedboat Inject in new procedures in the upper gastrointestinal tract ("GI"),
including successful application in Peroral Endoscopic Myotomy ("POEM")
procedures, opening up additional markets where our technology can be
effective.
Once the final FDA clearance has been received for SpydrBlade Flex, all
products in our four technology families - Speedboat, MicroBlate, SlypSeal and
SpydrBlade - will be cleared for clinical use in both the US and Europe. Our
focus this year has been on delivering our best-in-class Clinical Education
Programme to provide training for leading clinicians in the use of our
Speedboat technology and CROMA Advanced Energy Platform.
The recently opened US office in Danbury, Connecticut includes a learning
centre and fully equipped training laboratory where our US based team has been
able to demonstrate products and provide lab-based training sessions. With
on-going travel restrictions across the world and the postponement of elective
procedures to, understandably, focus resources on caring for patients with
COVID-19, we have used remote technology extensively for live events, which is
yielding positive clinical results and building an active user community.
Our decision to purchase the freehold of Creo House in Chepstow, UK
strengthens our infrastructure and provides additional manufacturing capacity
for our full suite of devices. It also provides our team with a secure base to
allow us to continue to build a world class MedTech company.
Buy
We have made excellent progress in integrating our Albyn Medical and Boucart
Medical acquisitions into the Creo family. Both businesses now operate under
the Creo Medical brand and the extensive European sales-force is now equipped
to sell Creo products across the European markets. This approach is already
delivering benefits which will only accelerate as we introduce the full
product range into other regions.
Towards the end of 2021, we announced the acquisition of Aber Electronics
Limited, a UK based manufacturer and designer of power amplifiers and radio
frequency products. As an existing supplier to Creo, this acquisition fits
well with our 'Buy' strategy, whilst adding manufacturing operations and
specialist microwave and radio frequency capability to Creo's product
development for Kamaptive as well as securing a key element of our supply
chain.
Partner
Early in 2022, I was pleased to report that we had signed non-binding heads of
terms with a number of parties which relate to the Group's SpydrBlade, Cool
Plasma and MicroBlate technologies. This is accelerating the development of
the "powered by Kamaptive" brand, by enabling partners to leverage our core
Kamaptive technology.
We believe that such partnerships have the potential to create shareholder
value through granting third-party access to Creo's advanced energy Kamaptive
technology in large and growing markets adjacent to those where the Group is
already operating. This includes fields such as laparoscopic surgery,
robotically assisted surgery, and non-thermal plasma sterilisation.
With the right partners, the Group believes that Creo's technology has the
potential to fundamentally change the way that patients are cared for and to
improve patient outcomes.
Our people and responsibilities
We are a fast growing organisation - now 290 strong. I have been impressed
with the way our management teams have retained and reinforced our strong
culture, in particular as we scale up our operations, manufacturing
capability, international growth and integrate our acquisitions into the Creo
family. We have enhanced our human resources function to support our growth
and ensure we operate and think as a global organisation from the start.
Our people are clearly the critical element within this. Without their
innovation, can-do spirit and commitment to the business, we would not have
delivered the progress we have during the year and I would like to thank each
and every one of them for making this possible.
Looking forward
Our mission remains the same: to improve patient outcomes by bringing advanced
energy to therapeutic endoscopy.
We see our strong progress in the commercialisation of our innovative,
minimally invasive, electrosurgical endoscopy devices accelerating as our user
community continues to grow. We anticipate that high vaccination rates in both
Europe and the US will lessen the impact of COVID-19 during 2022 and allow
clinicians to focus on the huge backlog of elective cases, increasing activity
in our key areas of clinical focus - core GI and soft tissue ablation. Whilst
continued restrictions in Asia have slowed progress in the region, we have
continued to recruit distributors in APAC and in those other markets where we
don't have a direct presence. We are well placed to support these distributors
as they start to satisfy a backlog in demand in their markets as they emerge
from the COVID-19 pandemic.
The successful integration of Albyn Medical and Boucart Medical have
transformed our commercial footprint in Europe and we will continue to
evaluate other strategic acquisition opportunities to accelerate our reach in
other regions including the USA. Along with the development of licensing
partners, we will continue our transition to a fully integrated specialty
medical device manufacturer with product origination, development and
commercialisation capabilities.
2022 has already started positively, with strong performances seen from our
core product portfolio. Throughout the rest of the year, we look forward to
continuing to execute and expand our three-tiered organic strategy through the
education and training of clinicians, the roll-out of our product portfolio in
APAC and further commercial orders and adoption of Speedboat Inject in the US
and Europe. With our strong cash position and clear strategy, Creo is well
positioned to drive shareholder value in 2022.
Craig Gulliford
Chief Executive Officer
Financial Review
I am pleased to announce the results for the 12 months to 31 December 2021.The
adversity faced by the business from COVID-19 has, in part, been mitigated
through the strength of the balance sheet following the 2021 fund raise.
Following our Build, Buy Partner strategy, the acquisitions of Albyn Medical
and Boucart Medical have been successfully integrated into the business and
have brought immediate revenue and positive cash flow to the Group, which
strengthens the business and confirms Creo as a platform for future growth.
Revenue and other income
Despite COVID-19 disrupting sales channels and restricting access to clinical
training and travel, the Group has made significant progress in establishing
sales channels through new products as well as development of our commercial
footprint via acquisitions and organic growth. We opened offices in the US,
and APAC as well as purchased the land and additional buildings at our UK
headquarters. The acquisition of Aber Electronics has helped to secure our
supply chain and the acquisitions of Albyn Medical and Boucart Medical in 2020
are generating revenues and positive cashflow to the Group.
Revenues billed in the period in relation to Speedboat Inject and CROMA
totalled £0.3m (2020, £32k). £24.9m was generated through distribution
sales of Creo Europe (formally known as Albyn and Boucart). Other operating
income of £0.05m in the 12-month period to 31 December 2021 (December 2020:
£0.05m) relates to research grants.
Gross Margin
Gross margin improved from 42.8% in 2020 to 46.0% in 2021.
Operating loss
The operating loss for the period increased to £29.9m (December 2020:
£23.5m), reflecting the increased operating expenses in relation to clinical
and development activities together with further investment in headcount and
business infrastructure including securing US and APAC offices to support the
business and enable it to continue to develop and commercialise its
technology. This continued investment in the business will support anticipated
growth and development in the coming periods.
The underlying operating loss (also referred to as adjusted EBITDA) for the
period was £19.0m (December 2020: £18.0m).
Whilst EBITDA is not a statutory measure, the Board believes it is helpful to
include for investors as an additional metric to help provide a meaningful
understanding of the financial information as this measure provides an
approximation of the ongoing cash requirements of the business as it continues
to pursue its future development and begins to commercialise its approved
products. The adjusted EBITDA position excludes share-based payment expenses
which are non-cash and incorporates the recovery of research and development
expenditure which the Group is able to benefit from through R&D tax credit
schemes.
12 months to 12 months to
(All figures £'000) 31 December 2021 31 December 2020
Operating loss (29,907) (23,484)
Loss before Income tax (30,339) (23,462)
Total comprehensive loss for the period (26,260) (20,745)
Underlying operating loss adjustments:
Share-based payments 2,564 728
Depreciation and amortisation 2,562 1,597
R&D expenditure recovered via tax credit scheme 5,744 3,146
Underlying operating loss (non-statutory measure) (19,037) (18,013)
Tax
The tax credits recognised in the current and previous fiscal year relate
mainly to R&D tax credit claims. A deferred tax asset has been recognised
in respect of the business combination relating to our Albyn subsidiaries. A
£0.75m deferred tax asset has been recognised in respect of tax losses in
Creo Medical Limited which we will utilise through group relief of the future
profits in Creo Medical UK Limited. No further tax assets in relation to these
losses has been recognised due to the uncertainty over the timing of future
recoverability.
Expenses
Administrative expenses comprising R&D, operational support, sales and
marketing, and finance and administration costs totalled £41.5m (December
2020: £27.6m). R&D spend for the year totalled £12.9m (December 2020:
£10.2m) reflecting the continued innovation and development of our technology
during the year. Adjusting for share-based payments, depreciation,
amortisation and tax income as shown in the table above, underlying
administrative expenses are £30.6m (December 2020: £22.1m).
This annualised increase of £8.5m reflects a full year of trade through Creo
Europe, the continued investment made by the Group in clinical and development
activities and the move from small discrete production batches into full-scale
manufacturing. Personnel costs continue to be the largest expense and
represent approximately 65% of the Group's underlying administrative expenses.
Loss per share was 15 pence (December 2020: 13 pence).
Dividend
No dividend has been proposed for the period to 31 December 2021 (31 December
2020: £nil).
Cash flow and balance sheet
Net cash used in operating activities was £26.0m (December 2020: £16.3m),
driven by the continued investment in research and development and,
establishing a US and APAC presence. Net cash used in investing activities was
£7.8m (December 2020: £21.0m) driven by the acquisition of Aber Electronics
and purchase of land and buildings for UK headquarters. Cash generated from
financing activities was £32.0m of which £34.3m was raised through an Open
Offer and Share Placement during the period.
Total assets at the end of the period increased to £100.6m (31 December 2020:
£92.5m), a 8.8% increase, reflecting the increase in assets and goodwill as a
result of the business combination, offset by the operating cash outflow for
the period. Cash and cash equivalents at 31 December 2021 was £43.5m (31
December 2020: £45.1m). Net assets were £73.3m (31 December 2020: £62.8m),
a 16.7% increase due to fund raise offset by operating loss and share based
payment expense.
Accounting policies
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards. The Group's accounting policies
have been applied consistently throughout the period and are described in the
2021 Report and Accounts.
Key Performance Indicators
As the Group continues to develop and commercialise its core technology, the
Directors consider the key financial performance indicators to be the level of
cash held in the business, sales and operating expenses controlled to budget.
The Board performs regular reviews of actual results against budget, and
management monitors cash balances on a monthly basis to ensure that the
business has sufficient resources to enact its current strategy.
Certain KPIs concern non-financial measures, such as the number of trainees
for our clinical education programme, integration of acquired entities, ESG
metrics such as carbon emissions and diversity ratios and progress against our
build buy partner strategy. All non-financial measures are monitored on a
monthly basis.
The Board will continue to review the KPIs used within the business and assess
them as the business grows.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out in the 2021
Report and Accounts.
Richard Rees
Chief Financial Officer
Consolidated Statement of Profit and Loss and Other Comprehensive Income
(All figures £'000) 31 December 2021 31 December 2020
Revenue 25,161 9,429
Cost of sales (13,576) (5,394)
Gross Profit 11,585 4,035
Other operating income 52 49
Administrative expenses (41,544) (27,568)
Operating loss (29,907) (23,484)
Finance expenses (463) (173)
Finance income 31 195
Loss before tax (30,339) (23,462)
Taxation 5,744 3,146
Loss for the year (24,595) (20,316)
Exchange loss on foreign subsidiary (1,896) (429)
Changes to the fair value of equity investments at fair value through other 231 -
comprehensive income
Total comprehensive loss for the year (26,260) (20,745)
Loss per Share
Basic and diluted (£) (0.15) (0.13)
Consolidated Statement of Financial Position
As at As at
(All figures £'000) 31 December 2021 31/12/2020*
Assets
Non-current assets
Intangible assets 8,692 10,268
Goodwill 18,563 18,262
Investments 1,733 500
Property, plant and equipment 8,603 3,378
Deferred tax 1,705 474
Other assets 146 112
39,442 32,994
Current assets
Inventories 8,504 6,812
Trade and other receivables 4,830 4,593
Tax receivable 4,299 2,973
Cash and cash equivalents 43,534 45,092
61,167 59,470
Total assets 100,609 92,464
Shareholder equity
Called up share capital 181 158
Share premium 149,448 115,263
Merger reserve 13,603 13,603
Share option reserve 7,940 5,376
Foreign exchange reserve (2,325) (429)
Financial Assets at fair value through other comprehensive income 231 -
Accumulated losses (95,760) (71,165)
Total equity 73,318 62,806
Liabilities
Non-current liabilities
Interest-bearing liabilities 5,175 6,542
Other liabilities - 1,873
Deferred tax liability 1,786 1,996
Provisions 593 1,219
-
7,554 11,630
Current liabilities
Interest-bearing liabilities 3,705 4,023
Trade and other payables 9,921 8,504
Non interest-bearing loans 1,676 1,790
Other liabilities 4,221 3,474
Provisions 214 237
19,737 18,028
Total liabilities 27,291 29,658
Total equity and liabilities 100,609 92,464
*Prior year restatement of debtors and creditors, which has no impact on the
profit or loss. See restated balance sheet for prior year in the 2021 Annual
Report and Accounts.
Consolidated Statement of Changes in Equity
Changes to the
fair value of
equity
instruments
at fair value
Called up Share through other Foreign
share Accumulated Share Merger option comprehensive Exchange Total
(All figures £'000) capital losses premium reserve reserve income Reserve equity
Balance at 1 January 2019 120 (34,938) 65,836 13,603 3,093 - - 47,714
Total comprehensive loss for the year
Loss for the financial year - (15,911) - - - - - (15,911)
Total comprehensive loss - (15,911) - - - - - (15,911)
Transactions with owners, recorded directly in equity
Issue of share capital 30 - 49,276 - - - - 49,306
Equity settled share-based payment transactions - - - - 1,555 - - 1,555
Balance at 31 December 2019 150 (50,849) 115,112 13,603 4,648 - - 82,664
Total comprehensive loss for the year
Loss for the financial year - (20,316) - - - - - (20,316)
Other comprehensive loss - - - - - - (429) (429)
Total comprehensive loss - (20,316) - - - - (429) (20,745)
Transactions with owners, recorded directly in equity
Issue of share capital 8 - 152 - - - - 160
Equity settled share-based payment transactions - - - - 728 - - 728
Balance at 31 December 2020 158 (71,165) 115,264 13,603 5,376 - (429) 62,807
Total comprehensive loss for the year
Loss for the financial year - (24,595) - - - - - (24,595)
Other comprehensive loss - - - - - 231 (1,896) (1,665)
Total comprehensive loss - (24,595) - - - 231 (1,896) (26,260)
Transactions with owners, recorded directly in equity
Issue of share capital 23 - 34,184 - - - - 34,207
Equity settled share-based payment transactions - - - - 2,564 - - 2,564
Balance at 31 December 2021 181 (95,760) 149,448 13,603 7,940 231 (2,325) 73,318
Consolidated Statement of Cash Flows
(All figures £'000) 31 December 2021 31 December 2020
Cash flows from operating activities
Loss for the period (24,595) (20,316)
Depreciation/amortisation charges 2,562 1,596
Equity settled share-based payment expenses 2,564 728
Fair value adjustment to derivatives 100 0
Finance expenses 463 173
Finance income (31) (195)
R&D expenditure credit - (2)
Taxation (5,744) (3,146)
Impairment of intangible assets - 141
(24,681) (21,021)
(Increase)/decrease in inventories (2,967) 767
Increase in trade and other receivables (3,170) (394)
Increase in trade and other payables 1,875 1,686
(28,943) (18,962)
Interest paid (463) (173)
Tax paid - 153
Tax received 3,395 2,702
Net cash used in operating activities (26,011) (16,280)
Cash flows from investing activities
Purchase of intangible fixed assets (146) (91)
Purchase of tangible fixed assets (5,976) (485)
Acquisition of subsidiary net of cash acquired (1,752) (20,586)
Interest received 31 195
Net cash used in investing activities (7,843) (20,967)
Cash flows from financing activities
Capital repaid in respect of loans (1,844) (497)
Proceeds of new loan 144 2,055
Capital repaid in respect of lease liabilities (515) (391)
Share issue 34,208 159
Net cash generated from financing activities 31,993 1,326
(Decrease) in cash and cash equivalents (1,861) (35,921)
Effect of exchange rates in cash held 303 (35)
Cash and cash equivalents at beginning of the year 45,092 81,048
Cash and cash equivalents at end of the year 43,534 45,092
Notes to the financial statements
1. Financial information set out in this announcement
The financial information set out above does not constitute the Company's
statutory accounts for the period ended 31 December 2021 or 31 December 2020
but is derived from those accounts. Statutory accounts for the period ended 31
December 2020 have been delivered to the registrar of companies, and those for
the period ended 31 December 2021 will be delivered in due course. The auditor
has reported on those accounts; their reports were (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
2. Revenue and other operating income
The revenue split between the Group was as follows:
12 months to 12 months to
(All figures £'000) 31 December 2021 31 December 2020
Albyn subsidiaries 24,823 9,397
Creo Medical Limited subsidiaries 338 32
Total 25,161 9,429
Segmental reporting
Operating segments are identified on the basis of internal reporting and
decision making. Creo currently has one operating segment which is the
research, development and distribution of electrosurgical medical devices
relating to the field of surgical endoscopy.
The Group has started the process of integrating the previous Albyn and
Boucart brands into the Creo brand and offering customers our full suite of
products. As such the Group is still operating in a single segment. As the
Group continues to grow we expect the internal reporting structure to change
to meet the changing goals and objectives of the business and additional
operating segments may be identified in future reporting periods.
As there is only one reportable operating segment whole profit, expenses,
assets, liabilities and cashflows are measured and reported on a basis
consistent with the financial statements, with no additional disclosures
necessary.
Other operating income
Other operating income relates to research grants. Income is recognised as
necessary to match it with the related costs in the profit or loss on a
systematic basis over the periods in which the entity recognises expenses for
the related costs for which the grants are intended to compensate.
Furthermore, income is recognised only when there is reasonable assurance that
the Company will comply with any conditions attached to the grant and the
grant will be received. Grant income received during the year was £0.05m
(2020: £0.05m).
3. Loss before tax
The loss before income tax is stated after charging/(crediting):
12 months to 12 months to
(All figures £'000) 31 December 2021 31 December 2020
Depreciation - owned assets 782 582
Depreciation - assets on hire purchase contracts - 36
Depreciation - right of use assets 651 321
Amortisation 1,129 658
Impairment of Intangible Assets - 141
Research and development expenditure 12,869 10,193
4. Loss per share
Loss per share has been calculated in accordance with IAS 33 - Earnings Per
Share using the loss for the period after tax, divided by the weighted average
number of shares in issue.
12 months to 12 months to
(All figures £) 31 December 2021 31 December 2020
Loss
Loss attributable to equity holders of Company (basic) (24,594,919) (20,315,725)
Shares (number)
Weighted average number of ordinary shares in issue during the period 164,433,455 155,797,600
Loss per share
Basic and diluted (0.15) (0.13)
5. Share Capital
31 December 31 December
(All figures £'000) 2021 2020
Balance at start of period 158 150
Issue of share capital
Number of shares 23,208,005 7,512,423
Price per share (£) 0.001 0.001
Share value (£'000) 23 8
Balance at 31 December 181 158
6. Subsequent events
Heads of Terms signed
The Company has entered into non-binding heads of terms with a number of
parties which relate to the licensing of the Company's SpydrBlade, Cool Plasma
and MicroBlate technologies. As outlined previously, Creo is developing its
business through a three tiered Build, Buy and Partner strategy. Having
already demonstrated execution on the Build and Buy elements, the Partner
strategy aims to create shareholder value through granting third-party access
to Creo's advanced energy technology in markets adjacent to those where the
Company is already operating. This includes fields such as laparoscopic
surgery, robotically assisted surgery, and non-thermal plasma sterilisation.
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