REG - Creo Medical Group - Final Results
19/05/2025 07:00
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RNS Number : 1424J Creo Medical Group PLC 19 May 2025
Creo Medical Group plc
("Creo", the "Company" or the "Group")
FY24 Final Results
Strong Core Technology revenue growth and continued cost management
Significantly improved balance sheet
Creo Medical Group plc (AIM: CREO), the medical device company focused on the
emerging field of minimally invasive surgical endoscopy for pre-cancer and
cancer patients, announces its audited final results for the 12 months ended
31 December 2024 ("FY24"), which are in-line with market expectations.
Note: following the agreement to sell a 51% stake in Creo Medical Europe
("CME") announced in September 2024 and the decision to sell Aber Electronics
("Aber") in December 2024, CME and Aber were classified as assets held for
sale assets and are reported as discontinued operations in the FY24 results.
Strong Core Technology performance, continued cost management and a 74%
increase in Core Technology revenues:
· Total group revenues of £30.7m with £4.0m from continuing
operations and £26.7m from discontinued operations, following the sale of
Creo Medical Europe
· Commercial roll out of Speedboat UltraSlim driving a strong orderbook
and a 74% increase in Creo Core Technology sales vs FY23
· Cost reductions of c.£5.0m (annualised basis) on continuing
operations made during H2 FY24, with the full c.£5.0m benefit to be realised
in FY25
· £12m before expenses raised through a placing and open offer in
October 2024
· Strategic partnership with Micro-Tech (Nanjing) Co. Ltd and sale of
51% of Creo Medical Europe, realising approximately €30m net cash to
strengthen balance sheet (post period) with a €36m investment asset held on
the balance sheet, providing future balance sheet strength
· Remaining 49% stake in Creo Medical Europe to provide cash inflows
going forwards, via an ongoing share of profits
· Board refresh with a new Chairman and additional NED to bring
additional strength, industry expertise and experience to the team
· Amendment to the collaboration agreement with Intuitive to accelerate
controlled market release of MicroBlate Flex, increasing the number of sites
able to undertake combined robotic diagnostic and ablation procedures
Financial summary
(£m) FY 2024 FY 2023*
Core Technology revenue from continuing operations £4.0m **£2.3m
Total Revenue (continuing and discontinued) £30.7m £30.8m
Adjusted
Underlying operating loss from continuing operations† £22.3m £20.9m
Basic loss per share (p) 0.08p 0.08p
Cash and cash equivalents £8.7m £3.0m
* Restated following the completion of the sale of 51% of the issued share
capital of Creo Medical S.L.U. ("Creo Medical Europe")
** Total revenue from continuing operations for FY23 was £4m including £1.7m
of non-recurring Kamaptive revenue
† Underlying operating loss is loss after adjusting for share-based
payments, depreciation and amortisation, R&D tax credits, earnout and
other one-off settlements.
Regulatory and operational highlights:
· Significant progress made in the roll-out of Creo's Core Technology
with over 5,000 procedures performed globally to date with Speedboat UltraSlim
being used in over 3,000 resection procedures in its first year on the market
· Multiple upper and lower GI procedures performed with Speedboat
UltraSlim, further enhanced by the launch of Speedboat Notch post period end
in April 2025
· NHS Supply Chain case study published setting out significant cash
and operational savings from the use of Speedboat for lower GI tract Speedboat
Submucosal Dissection ("SSD") procedures
· King's Award for Innovation received for Creo's Speedboat technology
· World's first robotic-guided microwave ablation of lung tissue
performed in the same sitting as a diagnostic procedure using MicroBlate Flex
· Launch of SpydrBlade Flex following CE marking during the year
Current trading and outlook:
· Creo continues to build on the momentum from the introduction of
Speedboat UltraSlim. With the commercial launch of Speedboat Notch, Creo
expects to see increasing utilisation of its CROMA platform and related
devices which, in turn, we expect will positively support revenue generation
· Positive start to 2025, with strong performance in Q1 driven by
Speedboat UltraSlim and Speedboat Notch.
· Reassuring interest from clinicians from the release of SpydrBlade
Flex
· Positive outlook for the year underpinned by the full-year effects of
the cost savings implemented in FY24 and visibility of growth in revenues. The
Company is targeting 40%-60% Core Technology revenue growth in FY25
Commenting on the results and outlook, Craig Gulliford, Chief Executive
Officer, said:
"The transition from development to commercial profitability is the most
challenging phase for any company. The consolidatory steps taken in 2024 and
our renewed focus will only help us as we continue to drive towards our goals.
We will continue to look for efficiencies and cost reductions where possible
to maximise the use of the funds we have. We look forward to another year of
strong growth in our Core Technology from both existing and new users, helping
drive us towards our goals of self-sustaining cashflows and improving lives."
For further information please contact:
Creo Medical Group plc www.creomedical.com
(https://protect.checkpoint.com/v2/___http:/www.creomedical.com/___.YzJ1OmludHVpdGl2ZTpjOm86NWJlYzBmMzJjY2MyZTBiZWFkNmJkZmVmNzdhM2MwMTI6NjoyYWU4OjczNzQyNWUwODBjYTEwNzAxYWMzNWEyZDQ3YzI1ZmEwYWMzYTc4M2Q2M2NjYzEyNTQwZWM3ODc4NTk3NTE4YTQ6cDpUOk4)
Richard Craven, Company Secretary Via Walbrook PR
Deutsche Numis (Nominated Adviser, sole Broker and Financial Adviser) +44 (0)20 7260 1000
Freddie Barnfield / Duncan Monteith / Euan Brown / Sher Shah
Walbrook PR Ltd Tel: +44 (0)20 7933 8780 or creo@walbrookpr.com (mailto:creo@walbrookpr.com)
Paul McManus / Alice Woodings Mob: +44 (0)7980 541 893 / +44 (0)7407 804 654
About Creo Medical
Creo 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
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Chairman's statement
Introduction
I am delighted to present my first statement as Chairman of Creo Medical Group
plc. Before discussing the progress of Creo since coming onboard, I want to
take a moment to thank our previous Chair, Charles Spicer who oversaw Creo's
transition from a small MedTech start-up to a commercial operation during his
eight-year tenure. This transition left Creo in a stronger position to achieve
its mission of improving lives.
I did not hesitate to join the Board of Creo in July 2024. Having held a
number of senior executive positions in the technology sector over the last
three decades, the quality of Creo's technology and, more importantly, the
opportunity to use that technology to improve lives, resonated with me
personally.
But I knew then - and know now - that there is work to be done. We immediately
set some key objectives when I joined the Board and conducted a
top‑down/bottom‑up review of Creo's overall business plan and product
development and release strategy. It was imperative to assess the business
through an objective, practical set of lenses and generate a business plan
that was executable, removing the uncertainty of the timing and size of any
Kamaptive programmes and the timing/adoption of new products in the pipeline.
This review served as a catalyst to ensure that the business was right-sized
to match the revised business plan outlook.
On top of this major business plan review, our primary objectives were to
continue to grow revenue from our Core Technology, complete the strategic
transactions that were already underway, remove non-core activities, and to
ensure that the Board was appropriately structured to match generally accepted
industry/market practice. In this statement, I aim to illustrate our
performance against these objectives, acknowledging that our job is not yet
done.
Overview
Creo Medical remains focused on driving a paradigm shift in surgery. Through
the clinical and commercial adoption of our suite of electrosurgical
endoscopic products, we aim to provide medical devices that deliver minimally
invasive surgical treatments via endoscopic procedures.
In late 2023, Creo's Speedboat UltraSlim device was cleared for use. A key
theme during 2024 was the successful use of this device worldwide to treat
cancerous and precancerous lesions in the colon, oesophagus and stomach, as
well as being used in oesophageal and gastric POEM procedures (to address
swallowing disorders and gastroparesis). Sales continue to grow
internationally.
In early 2024, Creo's MicroBlate Flex device was utilised by Professor Pallav
Shah and Dr Christopher Orton, of the Royal Brompton Hospital, becoming the
first specialists in the world to perform a robotic guided microwave ablation
of lung tissue in the same sitting as a diagnostic procedure. In collaboration
with Intuitive, we were pleased to announce in July that the number of sites
in the UK and Europe which are able to offer such services would be expanded.
This is part of an accelerated controlled market release of MicroBlate Flex to
support the collection of post-market clinical evidence. We expect each site
to become revenue generating once the initial cases are completed.
In the business plan review, we sought to focus the team on developing and
delivering a broader suite of advanced energy products in the right timeframe
with the highest potential of returns. The execution to this plan has been
superb, with the executive team aligned and engaged with the plan.
The Company was already working on the strategic sale of 51% of Creo Medical
Europe when I joined. This transaction heralds a new era for Creo. It is
obvious to state that the transaction strengthens Creo's balance sheet.
However, there are potential opportunities that will come to pass over the
next few years. By forming a joint venture with Micro-Tech, a strong
international MedTech company, the transaction represents a strategic
partnership with a number of opportunities to collaborate. These include
broader access to the APAC region, the potential for product co-development,
and even for a lower cost manufacturing relationship. We look forward to
working closely with Micro-Tech to continue to build on the successes of Creo
Medical Europe.
In October, we successfully raised additional financing for the Group against
a backdrop of significant global economic and political uncertainty. The
raise, together with the proceeds from the sale of Creo Medical Europe, gives
a strong balance sheet that allows us to focus on our core objectives in a
careful and prudent manner. I thank all shareholders for their continued
support.
During the year, Creo continued to build on its sales growth and pipeline.
Along with the ongoing product releases, Creo achieved a 74% increase in Core
Technology revenues, with £2.4m of sales in H2 24, representing 50% growth
half-on-half.
In early 2025, we announced the UK & EU launch of our SpydrBlade Flex
device, a unique multi-modal endoscopic device designed for precision and
adaptability in endoscopic procedures. We will continue to roll this product
out further during 2025, and look forward to sharing clinical and commercial
updates in due course.
As committed, actions to reduce costs in the second half of the year resulted
in a decrease in operating costs of approximately £5.0m with the full benefit
of this to come through in FY25.
These operational changes underpin our platform to drive towards our goals of
increasing revenue and achieving self-sustaining cashflows. The Board has
undertaken a rigorous review of its going concern position, and the steps that
have been taken to date together with downside scenario modelling support the
going concern assumptions and conclusions made.
This all being said, there remain continued global and local geopolitical and
economic challenges to which we are not immune - global markets remain
uncertain. This volatility is exacerbated in the smaller cap stock markets. We
remain diligent and flexible to be able to respond to these challenges and are
steadfast in our mission.
Management and Employees
Creo invests in talented and experienced individuals across the full range of
business functions needed for success. Our headcount peaked during the second
half of 2022, from the intensity of our R&D investment since IPO. The
business has been gradually reducing its headcount wherever possible by taking
advantage of natural attrition. However, we made an active decision during Q4
of 2024 to reevaluate the needs of the Group as it emerged from this intensive
R&D and regulatory clearance stage of growth but also in alignment with
the revised business plan.
Post the announcement of the sale of 51% of Creo Medical Europe and following
the divestment of Aber Electronics, our headcount has further reduced and the
Group has been simplified significantly.
Through our Remuneration Committee, chaired by Ivonne Cantu, we have revised
our remuneration policy to emphasise close alignment with the interests of our
shareholders and other stakeholders and completely in alignment with the
long-term vision of the Company. We made an active decision in 2024 to not
issue LTIP awards due to the number of corporate transactions that were taking
place within the business, as well as the significant performance misses
versus plan in 2024. Going forward, these transactions have a fundamental
impact on Group revenues and EBITDA but also redefine the future performance
criteria of the business. As announced, a LTIP was granted in March 2025 with
forward looking performance conditions that are appropriate for the newly
defined Group. Please see the Remuneration Report in the 2024 Annual Report
and Accounts for further details of Creo's remuneration practices.
The Board thanks all our employees for their hard work, commitment and
patience during the year which, most critically, laid the foundations for the
commercial roll out of Speedboat UltraSlim, the continued roll out of
MicroBlate Flex and the commercial launch of SpydrBlade Flex and Speedboat
Notch.
Governance and Board Make-Up
We have continued to build the Company's governance framework during the year
in alignment with the QCA Code of Conduct through the existing committees,
additional Board oversight, and regular discussion with shareholders and
advisers.
Along with myself, Brent Boucher joined the Board of directors on 1 July 2024
as an additional Independent Non-Executive Director and a member of the
Remuneration Committee. Brent is recognised as a business leader of multiple
innovative growth businesses and has extensive experience in the
commercialisation of novel medical devices. He brings to Creo an impressive
record of success in growing and transforming businesses across a range of
medical device specialities, including technologies, oncology interventions,
surgical solutions and respiratory care. His in-depth knowledge of the MedTech
space, coupled with his track record of success, brings area specific
expertise and guidance to Creo's Board and team.
At the 2024 AGM we announced that John Bradshaw, Creo's Senior Independent
Non-Executive Director and Audit Committee Chair had informed the Board of his
intention to retire and step down from his role before the 2025 AGM. During
John's nine-year tenure since IPO, John has helped guide and lead Creo with
professionalism and pragmatism. John has been instrumental to maintaining
stability during the last 12 months whilst the Company transitioned to its new
leadership model. As we work to identify an appropriate candidate to replace
John, Ivonne Cantu has agreed to act as interim Audit Committee chair. John
has agreed to be available to support Ivonne during this interim role and to
ensure that he can provide a handover to any future incoming Audit Committee
chair. I thank John for his support and in welcoming Brent and myself to the
team.
As part of the review to ensure Creo's Board is appropriately structured to
match generally accepted practice, David Woods and Christopher Hancock have
agreed to not stand for re-election at the 2025 AGM and to step down from
their roles as plc Board directors. This will result in a non-executive
majority on Creo's Board. David and Chris will continue in their day-to-day
executive functions and will remain as advisors to the Board. In addition,
both Chris and David will be senior contributors to Creo's operational Board
tasked with putting into effect the decisions and guidance of the main Board.
I look forward into the remainder of 2025 and beyond with optimism. We are
starting to see some of the benefits from the actions taken since joining the
Board. With steadfast conviction, the roll out of additional products, and a
laser focus on the continued transformation of the Company, I am convinced we
will continue to deliver on our objectives, improve lives and generate
shareholder returns.
Kevin T. Crofton
Non-Executive Chairman
18 May 2025
Chief Executive Review
Introduction
2024 was characterised by new product launches and foundations for growth
across a broader product range, with the launch of Speedboat UltraSlim into
the market, the initial launch of SpydrBlade Flex in the EU in the second half
of the year and a robotic ablation world's first. These foundational product
launches now delivering in clinical practice enable increased focus of
resources on commercial growth and moving beyond the R&D phase of the
business.
In late 2023 we launched Speedboat UltraSlim, our smallest resection device to
date. The enthusiastic reception from existing and new users for this device,
helped to drive revenue. With a team focused on the commercialisation of our
Core Technology, Creo ended the year with record sales of £4.0m achieved from
our Core Technology, representing 74% year-on-year growth.
Delivering the strategic agreement with Micro-Tech (NL) International B.V., a
wholly owned subsidiary of Micro-Tech (Nanjing) Co. Ltd (SHA: 688029)
("Micro-Tech") for the sale of 51% of Creo's Spanish subsidiary, Creo Medical
SLU ("Creo Medical Europe") during 2024 was significant. Micro-Tech was
selected after considering a number of potential partners. The transaction
closed in early 2025, delivering a significant non-dilutive cash injection,
strengthening our balance sheet and providing new opportunities to collaborate
with our new partner. The deal also:
· Strengthens our ongoing strategy with Creo Medical Europe to secure
long term continuity of supply of the product portfolio;
· Broadens the Creo branded portfolio in Europe as well as our US,
LATAM and APAC channels;
· Offers an opportunity to improve pricing and margin within Creo
Medical Europe;
· Provides for potential access to the Chinese market; and
· Offers strategic joint development and manufacturing opportunities.
This is an excellent deal for Creo and Micro-Tech. With Micro-Tech as a joint
venture partner, we have the opportunity together to be a significant force
within the industry enabling us to focus on our Core Technology business.
Our remaining 49% stake in Creo Medical Europe will bring cash inflows going
forwards, via an ongoing share of profits, plus a €36m investment asset held
on the balance sheet, providing future balance sheet strength.
Early in 2024 we were delighted to learn that the world's first robotic-guided
microwave ablation of lung tissue had taken place in the same sitting as a
diagnostic procedure with our MicroBlate Flex device being used in conjunction
with ION by Intuitive.
A controlled market release of MicroBlate Flex also commenced during 2024.
With cases now being performed in two sites in the UK and further European
sites expected to come online soon, this valuable collection of post market
clinical data aims to assist further adoption of the technology and future
revenue generation for Creo. This is really exciting. By treating patients we
are demonstrating safety and early efficacy. Working with such a huge industry
partner who shares our values and approach to early market development is both
rewarding as well as a validation of our approach with our broader product
range.
Whilst our intensive R&D phase is, in the main, complete, we continue to
hone and develop additional products to remain at the forefront of technology
development in our field.
During 2024 we worked hard to bring our SpydrBlade Flex device to market. We
also finalised a variation to Speedboat UltraSlim, called Speedboat Notch.
This is an enhanced device adapted following user feedback, making it suitable
for additional complex endoscopic procedures.
Our innovation doesn't go unrecognised. NHS Supply Chain published data in
2024 demonstrating significant cost and operational savings arising from the
use of Speedboat. Creo's original vision was to utilise Microwave energy to
treat cancer. To achieve this, as well as delivering cost and operational
benefits to healthcare providers, drives home that we are succeeding in our
mission to improve lives. In addition, it was with immense pride and gratitude
that I was invited to attend Windsor Castle to receive the King's Award for
Enterprise and Innovation from His Majesty King Charles. This award is a true
accolade for the hard work and effort we have all contributed to Creo, with
our technology treating patients around the world.
We continued to grow our user base and pipeline during 2024. Core Technology
users grew from 175 at the end of 2023 to 214 at the end of 2024. With a focus
on increasing utilisation and the introduction of additional products, this
c.20% growth in users led to an increased utilisation of c.35%, supporting the
74% growth in Core Technology revenue. The introduction of additional products
also helped our pipeline grow significantly, from c.650 potential users to
c.850 potential users at the end of 2024. Moving forward, we will continue to
focus on generating growth through increasing utilisation, supported by the
launch of additional products.
As a Board, we sharpened our focus on commercialisation during 2024. Charles
Spicer, who chaired the Company from IPO, stepped down at the end of June.
Charles was succeeded by Kevin Crofton who hit the ground running, leading an
in-depth review of our business plan and commercialisation strategy. Brent
Boucher also joined the Board, bringing a wealth of MedTech industry and
commercialisation expertise which is proving invaluable. At a personal level
and on behalf of the Board, I thank Charles for his guidance and work to grow
Creo from IPO to where he left it with multiple devices cleared in major
markets with early commercial traction. I also welcome both Kevin and Brent to
the Board and look forward to continuing to build on the great working
relationship we have established so far.
Revenue and cost base
Group revenues in 2024 were £30.7m (FY23: £30.8m) (with £4.0m (FY23:
£4.0m) from continuing operations and £26.7m (FY23: £26.8m) from
discontinued operations following the sale of Creo Medical Europe) reflecting
significant growth in our Core Technology and growth in Creo Medical Europe
consumables offset by forex headwinds.
The launch of Speedboat UltraSlim in Q4-23 was a significant milestone,
helping to drive record sales of Core Technology during 2024. Core Technology
sales increased by 74% to £4.0m (FY23: £2.3m), with £2.4m of sales in H2-24
representing 50% growth half-on-half. Core Technology revenues include sales
from all core products such as Speedboat UltraSlim and CROMA platform from
both existing and new customer additions during the period and remains as
continuing operations in the Group's FY24 results.
Creo Medical Europe consumables revenues were up 2.6% in constant currency
during 2024, in line with management expectations. Reported revenues of
£26.7m (FY23: £26.8m) are reflective of FOREX headwinds in the period. Creo
Medical Europe consumable sales are held as discontinued activities in the
Group's FY24 results.
With the onset of new leadership in the business, we undertook a
top-down/bottom-up review of the business, with an increased emphasis on
decreasing operating costs, in particular in R&D, engineering and
operations. This review led to significant headcount reductions in 2024 where
business need is now less resource intensive. Along with this, we manage an
external development programme with partners which allows us to make
significant cost savings alongside further simplification and efficiencies
from the Creo Medical Europe deal. The net effect is an approximate £5m
reduction in our annualised operating costs, the full benefits of which will
be seen during 2025.
Continuing this traction throughout 2025, and seeing our other key projects
come to fruition, positions us to achieve our goals of increasing revenues
while maintaining appropriate cost management. We are actively looking at our
manufacturing strategy, how we interact with our strategic partners and how we
deliver long term shareholder value.
An example of how we are evolving our relationships with strategic partners is
Aber Electronics Limited ("Aber"), a manufacturer, designer and supplier of
power amplifiers and radio frequency products which Creo acquired in 2021. As
part of the focus on streamlining the business now that the foundational work
is complete, our need to de-risk supply has dramatically reduced. This has
enabled discussions with Aber's management to reach the decision to sell the
business back to management having completed the design and secured the supply
of the key, innovative new Microwave component and intellectual property
embedded in the CROMA generator. The transaction completed post period end in
March 2025 and for the purposes of the FY24 accounts has been held as a
discontinued operation. We thank the Aber team for their contribution to Creo
and look forward to continuing our longstanding relationship.
Creo Medical Europe
The sale of a 51% stake in Creo Medical Europe to Micro-Tech was an excellent
deal for both parties. For Creo, the transaction brought a significant,
non-dilutive, cash injection and a large financial return on investment whilst
preserving access to the sales channel acquired in 2020. Having acquired the
business for €28m, the transaction valued Creo Medical Europe at an equity
value of €72m, reflecting the growth achieved in the business since being
acquired. With our remaining 49% ownership, we will continue to see an ongoing
share of the profits with an expectation that the ongoing dividends will
exceed those we had when we first acquired the company. This is an outstanding
return for shareholders.
Since 2020, we have integrated and developed the Creo brand across the product
range distributed through Creo Medical Europe. More than 80% of all product
sales in 2024 came from the integrated branded product portfolio across high
volume complementary GI products through to the high value advanced energy
devices.
With Micro-Tech as a partner in Creo Medical Europe, the business gains long
term product supply certainty across the range from a strategically important
manufacturer. It also gains access to an increasing range of products to
complement Creo's Core advanced energy products. Creo will have the global
rights to sell any Creo Medical branded product distributed through the Creo
Medical Europe channel in the USA, LATAM and APAC.
Funding
On the back of the Micro-Tech deal and against the backdrop of an uncertain
macro environment towards the end of the year with budget statements and
significant global elections, we took the decision to secure additional funds
in October to mitigate the risk that the process to obtain clearances required
for the sale of 51% of Creo Medical Europe could delay closing of the
transaction beyond Q1-25. We are very grateful for the shareholder support
received. The funding, alongside the completion of the Creo Medical Europe
deal in February 2025, provides significant balance sheet strength providing
the financial platform to continue to drive towards significant milestones
during the year ahead and the next stage of Creo's development. We are
committed to and focussed on the commercialisation of our Core Technologies,
to generate self-sustaining cashflows.
Products
The launch of Speedboat UltraSlim in Q4 23, our smallest device to date, was a
significant milestone. The device was enthusiastically received by existing
and new users during 2024. As already noted, the launch of this device helped
to drive record Core Technology sales during 2024 as well as generating a
strong orderbook for the first quarter of 2025.
To date, Speedboat has been used in over 5,000 cases. This is just the start
of the utilisation of this device. Talking about Speedboat UltraSlim, Dr Regi
George, Gastroenterologist at The Royal Oldham Hospital, UK said "This is a
safer technology and allows much deeper submucosal dissection. We are now
moving on to use this as our preferred and only device for endoscopic
dissection."
In 2025 we will be commercialising an additional version of Speedboat,
Speedboat Notch. Taking on board user feedback, particularly in the upper GI
space, we have enhanced the design of Speedboat UltraSlim to include
additional features designed to support a wider range of reimbursed complex
third-space endoscopic procedures, including E-, F-, and G-POEMs. Developed at
pace through 2024, the Speedboat Notch was launched at ESGE Days in April
2025.
During the year the team has worked hard to commercially launch our SpydrBlade
Flex device. SpydrBlade Flex delivers laparoscopic cut and coagulate
functionality through an endoscopic device, which has previously been referred
to by Dr Rob Hawes as "The harmonic scalpel at the end of a flexible scope."
We are particularly excited about this product and the potential it offers to
treat patients.
SpydrBlade Flex really is one of the most advanced surgical tools. Again, Creo
has pioneered the introduction of this technology into the tiny footprint of a
flexible endoscopic instrument. It was fitting that following extensive
pre-launch global clinical activity in late 2024, the first customer for the
device was St Mark's Hospital in NW London, one of the UK's leading Endoscopy
Units and recognised as a world centre of excellence by the WEO (World
Endoscopy Organisation). St Mark's Hospital is also an established and regular
user of Creo's Speedboat UltraSlim.
We continue to review how to leverage the bipolar technology we have developed
for use in additional products to complement our Core Technology and provide
healthcare providers with the tools they need. We believe that there are a
number of opportunities where we can develop products, either ourselves or in
conjunction with third parties, increasing the number of devices available for
use with CROMA to drive greater use of Creo's Advanced Energy. These bi-polar
products would also complement the EndoTherapy products currently sold
alongside our Core Technology products, positioning Creo with a full product
offering for users and generating greater cross selling opportunities.
Notwithstanding the growth that we are seeing, we are still early in our
commercialisation. Our flagship Speedboat product is clearly ahead of the
other devices in our suite of products. However, we look forward to 2025 and
beyond and are focused on ensuring that our other core advanced energy devices
advance into full commercialisation with the same passion and focus as we have
applied to Speedboat.
Kamaptive
We signed the collaboration agreement with Intuitive in May 2021 with a vision
to develop our MicroBlate Flex technology through two development phases. The
ambition was to enter clinical practice within a couple of years. I was
privileged to observe one of the first robotically guided therapeutic cases
using MicroBlate Flex in December 2023 which we announced in early 2024. This
fantastic milestone was followed by a series of further cases in conjunction
with the Ion robot from Intuitive in early 2024. This use triggered an
acceleration in our expected commercialisation programme. There is still a lot
of work to do to complete our clinical studies, but the expansion beyond
clinical studies towards commercial activity with customers is an exciting
development.
In July 2024 we announced this change, marking a move to "post-market cases"
with Ion and Intuitive, through a shared controlled market release programme.
This change is now supporting the collection of post-market clinical data
evidence across the UK and Europe as part of a controlled market release as
part of the early commercialisation of MicroBlate Flex.
Two UK sites are already performing combined diagnosis and ablation procedures
using MicroBlate Flex in conjunction with the Intuitive Ion Endoluminal
System. We expect additional commercial sites to go live in the near future.
Our expectation is that each site will become revenue generating once a small
number of cases have been completed under the limited market release
agreement. As such, whilst commercial activity through the market release
continues at pace and is expected to create additional future revenue streams,
no revenues associated with this collaboration were recorded in the period
(FY23: £1.7m).
We continue to explore additional opportunities where our technology can be
exploited with Kamaptive partners. In our annual report, Professor Chris
Hancock, Creo's founder and CTO, explains how we have utilised our technology
during the past 12 months to develop and demonstrate outstanding performance
of prototype vessel sealers that could be used with a number of surgical
robots.
Recognition
In April 2024, NHS Supply Chain published data collected from over 130 patient
procedures undertaken at East Kent Hospitals University NHS Foundation Trust
("EKHUFT") as part of their bowel cancer and therapeutic endoscopy service.
The data demonstrates significant cost and operational savings provided by the
use of our Speedboat technology in Speedboat Submucosal Dissection ("SSD")
procedures. The life changing patient outcomes and the ability to positively
impact NHS waiting lists from these 130 patients aside, EKHUFT realised
savings of £687k from these cases alone.
When compared against a similar analysis of surgical alternatives, the data
shows:
· 87% reduction in the average length of stay from 8.39 days to 1.07
days;
· 99% reduction in critical care costs;
· 91% reduction in accommodation costs per patient from £3.4k to
£0.3k;
· 62% reduction in admission costs from £8.2k to £3.1k;
· Over a 1-year period, costs were reduced from £8.8k to £3.6k (59%
reduction);
· Net cash savings from just these 130 patient procedures of £687k
realised for the NHS Trust.
In an already stretched NHS, savings and efficiencies at this level are
desperately needed but hard to come by. Furthermore, the net cash savings
referenced were calculated over a one-year period and relate only to the SSD
procedure element. They do not include additional benefits and costs savings
previously identified and reported by Creo utilising the lifetime horizon
Markov model, which included downstream costs associated with recurrence of
lesions and procedure-related complications commonly associated with surgical
alternatives to SSD.
Receiving the King's Award for Enterprise in Innovation on behalf of Creo was
a personal highlight of 2024. The King's Awards for Enterprise is the UK's
most prestigious business awards which recognise and encourage achievements in
the fields of Innovation, International Trade, Sustainable Development and
Promoting Opportunity through social mobility. I am immensely grateful to have
been able to receive this award on behalf of the Company, recognising the hard
work and effort we have all put in to enable Speedboat and CROMA to change
lives.
Current trading and outlook
Global uncertainty remains and will, no doubt, continue for some time.
Together with an increased risk of unforeseen economic impact arising from the
new US administration. This uncertainty is placing pressure on the MedTech
industry and global markets generally. This is outside of our control. We
continue to focus on that which we can control, and ensure that Creo is best
positioned to respond with positive intention to any challenges that come our
way.
There is a lot to be confident about for 2025. We continue to build on the
momentum from the introduction of Speedboat UltraSlim and SpydrBlade Flex.
With the commercial launch of Speedboat Notch, we expect to see increasing
utilisation of our CROMA platform and related devices which, in turn, we
expect will positively support revenue generation.
Creo has started 2025 positively, with strong performance in Q1 which has
continued to be driven by Speedboat UltraSlim and Speedboat Notch. Interest
from clinicians for SpydrBlade Flex is reassuring. The Company is targeting
40-60% Core Technology revenue growth in FY25, while benefitting from the
full-year effects of the cost savings implemented in Q4-24 and Q1-25.
We will continue to develop our relationship with Kamaptive partners. We
expect that more sites will come online for the use of MicroBlate Flex and,
with that, the expectation that these will become revenue generative in due
course. Having received our first paid purchase order for MicroBlate Flex in
Q125, we know this prospect is real.
We will also continue to pursue other Kamaptive opportunities which will help
utilise our IP and ensure future development continues through funded
projects. This could be through the integration of SpydrBlade into robotic
laparoscopic tools or from our Plasma technology.
We will look for all opportunities to collaborate with Micro-Tech, our partner
in Creo Medical Europe. We are excited to see how that relationship can grow
and how we can work together to continue the growth of Creo Medical Europe
and, in turn, create more opportunities for the sale of our Core Technology in
the markets that it serves.
Whilst not an easy task by any measure, the cost reduction exercise undertaken
in 2024 will show benefit in 2025. With the completion of the sale of 51% of
Creo Medical Europe and the sale of Aber in early 2025, the size of the Group
is significantly reduced, providing administrative efficiencies which will
also benefit the Group.
The transition from development to commercial profitability is the most
challenging phase for any company. The consolidatory steps taken in 2024 and
our renewed focus will only help us as we continue to drive towards our goals.
We will continue to look for efficiencies and cost reductions where possible
to maximise the use of the funds we have. We look forward to another year of
strong growth in our Core Technology from both existing and new users, helping
drive us towards our goals of self-sustaining cashflows and improving lives.
Craig Gulliford
Chief Executive Officer
18 May 2025
Chief Financial Officer Report
2024 delivered significant growth in Creo Core revenues, led by Speedboat
UltraSlim (which was cleared in late 2023). The increasing utilisation of this
device throughout 2024 helped Creo achieve record Core Technology revenues for
Q4 2024.
In September 2024, the Group announced the agreement to sell a 51% interest in
Creo Medical Europe to Micro-Tech with net proceeds of €30m payable in cash
on completion (the "Sale"). The Sale completed on 12 February 2025, with the
cash proceeds being received on 14 February 2025, increasing the Group's cash
and cash equivalents to £31.2m post sale. This transaction not only enables
Creo to continue to fund the ongoing strategic development of its Core
Technology business, but provides a strategic partner through Micro-Tech which
strengthens Creo's commercial platform in Europe and beyond. As a result of
the Sale, we accounted for Creo Medical Europe as an asset held for sale as at
31 December 2024. Prior to the end of 2024 we also reached heads of terms to
sell Aber, a Creo subsidiary, as part of a Management Buy Out. This has also
been held as an asset held for sale as at 31 December 2024. This transaction
completed in March 2025.
The sale of Creo Medical Europe, together with our October 2024 fundraise of
£11.1m (net of fees), has provided Creo with additional cash runway to
deliver future revenue growth, product development plans and deliver our
licensing partnership plans.
As committed, we initiated a raft of cost saving plans during the latter part
of 2024. This process reduced our annual cost base by more than £5m going
into 2025. These savings are in addition to the reduction in the cost base
that has arisen from the sale of Creo Medical Europe and Aber. These
operational changes underpin our platform to drive towards our goal of
achieving self-sustaining cashflows.
Revenue and other income
Total revenue was £30.7m (2023: £30.8m) with continued operations revenue
being £4.0m (2023: £4.0m). The balance of £26.7m (2023: £26.8m) is
classified as discontinued operations.
The Group achieved a 74% increase in Creo Core Technology revenues to £4.0m
(2023: £2.3m), with £2.4m of sales in H2 24, representing 50% growth
half-on-half. Creo Core Technology revenues include sales from all core
products such as Speedboat UltraSlim and CROMA platform and significant new
customer additions during the period.
Creo Medical Europe Consumable revenue was up 2.6% in constant currency with
total revenue of £26.7m (2023: £26.8m) reflecting some FOREX headwinds in
the period. Creo Medical Europe consumable sales are classified as
discontinued operations in the Group's FY24 results.
Good progress was made towards the commercial use of the MicroBlate Flex
ablation device for robotic-guided procedures for lung cancer. Two UK sites
are now performing combined diagnosis and ablation procedures using MicroBlate
Flex with the Intuitive Ion Endoluminal System. As part of the amended
agreement with Intuitive (as announced on 2 July 2024), further sites are
expected to come on stream in the near future, with the expectation that each
site becomes revenue generating once the initial cases have been completed. As
such, whilst the initial cases are being completed, no revenues associated
with this were recorded in the period (2023: £1.7m).
Other operating income of (£0.4m) in the 12-month period to 31 December 2024
(2023: £0.4m) relates to the Welsh Government grant being de-recognised in
the year as it became evident that the grant conditions will no longer be
fulfilled in relation to job growth, following the reduction in headcount
during H2.
Gross margin
Gross margin on a continuing basis decreased to 46.6% (2023: 58.6%) in 2024
driven by the decrease of £1.7m in high margin Kamaptive revenue from 2023.
Excluding the Kamaptive revenue the margin has increased to 44.5% (2023:
40.2%). As we mature as a business it is expected that gross margins will
continue to improve with increased sales of the Core Creo products along with
further revenue growth from bundled EndoTherapy products as the install base
of CROMA systems grow.
Operating loss
The underlying operating loss for the year on continuing operations increased
to £22.3m (2023: £20.9m). This increase is due to the decrease in R&D
tax credits of £0.8m to £2.0m (2023: £2.8m) as a result of the R&D Tax
relief reform changes announced in early 2023. In addition to this, £0.8m of
Kamaptive margin leaves an underlying reduction of £0.2m year on year.
Underlying Administrative expenses remain broadly flat year on year with
c.£5m of cost savings to be realised in 2025.
2024 2023
(All figures £m) Continuing Discontinued Total Continuing Discontinued Total
Revenue 4.0 26.7 30.7 4.0 26.8 30.8
Cost of sales (2.1) (14.2) (16.3) (1.7) (13.8) (15.5)
Gross Profit 1.9 12.5 14.4 2.3 13.0 15.3
46.6% 46.6% 46.6% 58.6% 48.6% 49.7%
Other operating income (0.4) - (0.4) 0.4 0.0 0.4
Administrative expenses (30.3) (12.9) (43.2) (29.6) (10.9) (40.5)
Operating (Loss)/profit (28.8) (0.4) (29.2) (26.9) 2.1 (24.8)
SIP Charge 0.3 - 0.3 0.2 - 0.2
Goodwill Impairment - 1.6 1.6 - - -
Redundancy Costs 1.1 - 1.1 - - -
Grant Income 0.4 - 0.4 (0.4) - (0.4)
PPE & Other Settlements - - - - 0.3 0.3
Earnout - - - 0.5 - 0.5
Depreciation & Amortisation 1.5 1.0 2.5 1.7 1.7 3.4
R&D expenditure recovered via tax credit scheme 2.0 - 2.0 2.8 - 2.8
Underlying EBITDA * (23.5) 2.2 (21.3) (22.1) 4.1 (18.0)
Share based payments 1.2 - 1.2 1.2 0 1.2
Underlying Operating (Loss)/profit * (22.3) 2.2 (20.1) (20.9) 4.1 (16.8)
Underlying Administrative expenses * (23.8) (10.3) (34.1) (23.6) (8.9) (32.5)
*non-statutory measure. Underlying Administrative expenses is calculated by
taking Underlying Operating (Loss)/Profit and adjusting for Gross Profit and
Other operating income
Whilst underlying EBITDA and underlying operating loss are not statutory
measures, the Board believes they are helpful to include for investors as
additional metrics 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 pursue ongoing commercialisation focus of its approved products. The
underlying EBITDA position excludes SIP charges and Earnout charges
(contingent and deferred payments on previous acquisitions), individual items
outside of business control, 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. The underlying operating loss
position is the same as underlying EBITDA but also excludes share-based
payment expenses which are non-cash.
Tax
The tax credits recognised in the current and previous financial year relate
mainly to R&D tax credit claims. As already noted above, this was c.
£0.8m less than expected due to legislative changes following the budget in
March 2023 at £2.0m (2023: £2.8m). This has a direct detrimental impact on
cash and P&L for a company such as Creo.
Expenses
Underlying administrative expenses on continuing operations totalled £23.8m
for the year (2023: £23.6m). This 0.4% rise (2023: 5.6% decrease) includes c.
£0.8m (2023: £2.0m) less than expected R&D tax credit due to legislative
changes following the budget in March 2023.
Total administrative expenses on continuing operations totalled £30.3m for
the year (2023: £29.6m).
Non-cash expenses comprising of SIP charge, share based payments expense,
de-recognising the Welsh Government grant (as noted above) and depreciation
and amortisation were £3.3m (2023: £2.7m) on continuing operations.
Loss Per Share
Loss per share was 8 pence (2023: 8 pence) on continuing operations.
Dividend
No dividend has been proposed for the year to 31 December 2024 (2023: £nil).
Cash Flow and Balance Sheet
With the support from our shareholders, we were able to execute on a £12m
fundraise in October 2024. This was secured against a backdrop of economic
pressures and difficult market conditions and represents a significant
achievement for the Company, providing us with the financial platform to
deliver growth until we were able to close the sale of Creo Medical Europe.
Net cash used in operating activities was £22.2m (2023: £21.6m). Net cash
from investing activities was £15.3m (2023 used in: £18.3m). Cash generated
from financing activities was £16.2m (2023: £29.8m) raised from the October
fund raise (net of expenses) and loans provided to Creo Medical Europe.
Total assets at the end of the year decreased to £65.0m (31 December 2023:
£76.6m), a 15.1% decrease, reflecting cash received from the equity raise
offset by the reduction in cash due to operating activities and the accounting
treatment for the asset held for sale.
Cash and cash equivalents at 31 December 2024 was £8.7m (31 December 2023:
£18.5m).
Net assets were £42.4m (31 December 2023: £59.8m), a 29.0% decrease, as
noted above due to the equity raise offset by the reduction in cash due to
operating activities and the accounting treatment for the asset held for sale
and share based payments expense. Following the completion of the sale of 51%
of the issued share capital of CME at an equivalent equity value of €72m on
a cash-free, debt-free basis on 12 February 2025, the net proceeds of €30.4m
were received on 14 February 2025.
Sale of Creo Medical Europe
In addition to the consideration received from the Sale, the remaining 49%
stake held in Creo Medical Europe will bring revenue via a share of the annual
profits of Creo Medical Europe and cash inflows via annual dividends
distributed from any annual profits going forwards. On completion of the Sale,
a €36m investment asset was recognised and held on the balance sheet,
providing future balance sheet strength to the Group.
Accounting Policies
The Group's financial statements were prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those standards. The
Group's accounting policies have been applied consistently throughout the
year.
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 and
monitored. 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 Pioneer Clinical Education Programme, integration of acquired
entities, ESG metrics such as carbon emissions, diversity ratios and employee
engagement (see Directors' Remuneration Report in the 2024 Annual Report and
Accounts). All non-financial measures are monitored monthly. 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 2024
Annual Report and Accounts.
Directors
Details of the Directors who served during the year ended 31 December 2024 are
set out in the 2024 Annual Report and Accounts. Seven Directors serving on the
Board at the year-end were male with one female.
Conflicts of Interest
To address the provisions of section 175 of the Companies Act 2006 relating to
conflicts of interest, the Company's Articles of Association allow the Board
to authorise situations in which a Director has, or may have, a conflict of
interest. Directors are required to give notice of any potential situational
or transactional conflicts that are to be considered at the Board meeting and,
if considered appropriate, conflicts are authorised. Directors are not
permitted to participate in such considerations or to vote regarding their own
conflicts.
Richard Rees
Chief Financial Officer
18 May 2025
Consolidated statement of profit or loss and other comprehensive income
(All figures £m) Note 2024 2023 Restated*
Revenue 2 4.0 4.0
Cost of sales (2.1) (1.7)
Gross Profit 1.9 2.3
Other operating income/(expense) (0.4) 0.4
Administrative expenses (30.3) (29.6)
Operating loss (28.8) (26.9)
Finance expenses (0.4) (0.2)
Finance income 0.2 0.7
Loss before tax (29.0) (26.4)
Taxation 1.2 2.7
Loss for the year (27.8) (23.7)
Discontinued Operations (0.9) 2.0
Loss for the period/year (28.7) (21.7)
Exchange gain/(loss) on foreign subsidiary (1.3) (0.6)
Changes to the fair value of equity investments at fair value through other - -
comprehensive income
Total other comprehensive income (1.3) (0.6)
Total comprehensive loss for the year (30.0) (22.3)
Loss per Share Continuing Operations
Basic and diluted (£) 3 (0.08) (0.08)
Loss per Share
Basic and diluted (£) 3 (0.08) (0.07)
*Restated following the completion of the sale of 51% of the issued share
capital of Creo Medical S.L.U. ("Creo Medical Europe"), a wholly owned
subsidiary of Creo, to Micro-Tech (NL) International B.V., a wholly owned
subsidiary of Micro-Tech (Nanjing) Co. Ltd (SHA: 688029) on February 12th
2025.
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
Consolidated statement of financial position
(All figures £m) Note 2024 2023
Assets
Non-current assets
Intangible assets 0.5 7.1
Goodwill - 19.1
Investments 2.1 2.1
Property, plant and equipment 5.9 9.1
Deferred tax - 1.1
Other assets 0.1 0.2
8.6 38.7
Current assets
Asset Held for Sale 40.9 -
Inventories 2.7 8.1
Trade and other receivables 2.0 8.6
Tax receivable 2.1 2.7
Fixed term deposits - 15.5
Cash and cash equivalents 8.7 3.0
56.4 37.9
Total assets 65.0 76.6
Shareholder equity
Called up share capital 4 0.4 0.4
Share premium 192.0 180.9
Merger reserve 13.6 13.6
Share option reserve 12.0 10.5
Foreign exchange reserve (3.1) (1.8)
Financial Assets at fair value through other comprehensive income 0.6 0.6
Accumulated losses (173.1) (144.4)
Total equity 42.4 59.8
Liabilities
Non-current liabilities
Interest-bearing liabilities 2.0 5.2
Deferred tax liability - 1.4
Provisions 0.1 0.3
2.1 6.9
Current liabilities
Liabilities held for sale 14.2 -
Interest-bearing liabilities 2.4 3.1
Trade and other payables 3.9 5.7
Other liabilities - 0.9
Provisions - 0.2
20.5 9.9
Total liabilities 22.6 16.8
Total equity and liabilities 65.0 76.6
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
Consolidated statement of changes in equity
(All figures £m) Note Called up share capital Accumulated losses Share premium Merger reserve Share option reserve Changes to the fair value of equity instruments at fair value through other Foreign Exchange Reserve Total equity
comprehensive (expense)/ income
Balance at 31 December 2022 0.2 (122.7) 149.5 13.6 9.3 0.6 (1.2) 49.3
Total comprehensive loss for the year
Loss for the financial year - (21.7) - - - - - (21.7)
Other comprehensive loss/income - - - - - - (0.6) (0.6)
Total comprehensive loss - (21.7) - - - - (0.6) (22.3)
Transactions with owners, recorded directly in equity
Issue of share capital 4 0.2 - 31.4 - - - - 31.6
Equity settled share-based payment transactions - - - - 1.2 - - 1.2
Balance at 31 December 2023 0.4 (144.4) 180.9 13.6 10.5 0.6 (1.8) 59.8
Total comprehensive loss for the year
Loss for the financial year - (28.7) - - - - - (28.7)
Other comprehensive loss/income - - - - - - (1.3) (1.3)
Total comprehensive loss - (28.7) - - - - (1.3) (30.0)
Transactions with owners, recorded directly in equity
Issue of share capital 4 0.0 - 11.1 - - - - 11.1
Equity settled share-based payment transactions - - - - 1.5 - - 1.5
Balance at 31 December 2024 0.4 (173.1) 192.0 13.6 12.0 0.6 (3.1) 42.4
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
Consolidated statement of cashflows
(All figures £m) Note 12 months to 12 months to
31 December 2024 31 December 2023
Cash flows from continuing operating activities
Loss for the year (27.8) (23.7)
Profit/(Loss) from discontinued operations (0.9) 2.0
Depreciation/amortisation charges 2.5 3.4
Equity settled share-based payment expenses 1.5 1.2
Finance expenses 0.7 0.4
Finance income (0.2) (0.7)
Impairment loss of goodwill 1.4 -
Taxation (1.0) (2.8)
Decrease in inventories 0.7 (0.4)
Increase in trade and other receivables (1.0) (1.4)
Decrease in trade and other payables 0.2 (3.7)
(0.0) (5.5)
Interest paid (0.7) (0.4)
Tax paid (0.2) -
Tax received 2.6 4.5
Net cash used in operating activities (22.2) (21.6)
Cash flows from investing activities
Purchase of intangible fixed assets (0.1) (0.4)
Purchase of tangible fixed assets (0.3) (1.2)
Acquisition of subsidiary net of cash acquired - (2.4)
Fixed Term Deposits 15.5 (15.0)
Interest received 0.2 0.7
Net cash used in investing activities 15.3 (18.3)
Cash flows from financing activities
Capital repaid in respect of loans (0.7) (1.4)
Proceeds of new loan 6.4 0.2
Principal elements of lease repayments (0.7) (0.7)
Share issue 11.1 31.7
Net cash generated from continuing financing activities 16.2 29.8
Increase/(Decrease) in cash and cash equivalents 9.3 (10.1)
Cash and cash equivalents at beginning of the year 3.0 13.1
Cash and cash equivalents at end of the year 12.3 3.0
Cashflow statements from discontinued operations:
Cash and cash equivalents at beginning of the year 1.0 -
Net cashflows from operating activities 2.8 -
Net cashflows from investing activities (0.2) -
Net cashflows from financing activities (0.0) -
3.6 -
The cash and cash equivalents per the statement of financial position of
£8.7m represents the £12.3m consolidated cash position less cash held for
sale of £3.6m. Proceeds of new loans were drawn down in discontinued
operation and subsequently loaned to the continued operation and therefore are
eliminated within the consolidated accounts. Given in the prior year the
criteria under IFRS-5 for a discontinued operation was not met no comparator
has been provided as all cashflows were from a continued operation.
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
Notes to the interim financial statements
1. Basis of preparation
1. Financial information set out in this announcement
The financial information set out in this announcement does not comprise
statutory accounts for the year ended 31 December 2024 within the meaning of
Section 434 of the Companies Act 2006 as it does not contain all the
information required to be disclosed in the financial statements prepared in
accordance with UK adopted International Accounting Standards. The financial
information in this announcement has been extracted from the audited financial
statements for the year ended 31 December 2024. The report of the auditor on
the 31 December 2024 statutory financial statements was unqualified, and did
not contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006. The statutory accounts for the year ended 31 December 2024
have not yet been delivered to the Registrar of Companies.
The financial information for the year ended 31 December 2023 has been
extracted from the Group's audited statutory financial statements which were
approved by the Board of Directors on 14 May 2024, and which have been
delivered to the Registrar of Companies for England and Wales. The report of
the auditor on these financial statements was unqualified and did not contain
a statement under Section 498(2) or Section 498(3) of the Companies Act 2006,
but did draw attention to the Group's ability to continue as a going concern
by way of a material uncertainty paragraph.
This announcement was approved by the Board of directors and authorised for
issue via RNS on 18 May 2025.
Going Concern
For the year ended 31 December 2024 the Group made a total comprehensive loss
of £28.7m for continuing operations and an underlying EBITDA loss of £23.5m.
As at 31 December 2024, the Group had cash and cash equivalents of £8.7m. An
amount of £11.1m (after expenses) was raised in October 2024 through a Share
Placement and Open Offer. In addition, following the completion of the sale
of 51% of the issued share capital of Creo Medical Europe at an equivalent
equity value of €72m on a cash-free, debt-free basis on 12 February 2025,
the net proceeds of €30.4m were received on 14 February 2025. Cash as at 31
March 2025 was £26.5m.
Underlying administrative expenses for 2024 were £23.8m. We initiated a raft
of cost saving plans during the latter part of 2024. This process reduced our
underlying administrative expense by more than £5m going into 2025. These
savings are in addition to the reduction in the cost base that has arisen from
the sale of Creo Medical Europe and Aber Electronics. These operational
changes underpin our platform to drive towards our goals of increasing revenue
and achieving self-sustaining cashflows which supports the going concern
assumptions.
The financial statements have been prepared on a going concern basis which the
Directors believe to be appropriate for the following reasons:
The Directors have considered the applicability of the going concern basis in
the preparation of the financial statements. This included the review of
financial results, internal budgets, cash flow forecasts and covenant
compliance for the period of at least 12-months following the date of approval
of the financial statements ("the going concern period").
The Directors have prepared a base case scenario which is based on the Board
approved forecast and assumes an increase in revenues, particularly from its
Core revenue streams and a decrease in underlying administrative expenses
following a strategic review of the underlying cost base. This is for the
year to 31 December 2025 compared to the year ending 31 December 2024. In
addition, the Directors have modelled severe but plausible downside scenarios
on the going concern period. These scenarios include sensitivity analysis to
delay future revenue growth. In such a case the Group would take mitigating
actions and the Directors concluded that the Group would be able to reduce
expenditure on its research and development programmes and other areas in
order to meet its liabilities as they fall due for the going concern period,
without needing to obtain waivers on any applicable debt covenants.
Based on the above, the Directors are satisfied that the Group and Company
will have sufficient funds to meet their liabilities as they fall due for the
going concern period and therefore have prepared the financial statements on a
going concern basis.
Accounting policies
The accounting policies used in the preparation of the financial information
for the year ending 31 December 2024 are in accordance with the recognition
and measurement criteria of UK adopted international accounting standards.
Whilst the financial information included has been prepared in accordance with
the recognition and measurement criteria of international accounting
standards, the financial information does not contain sufficient information
to comply with international accounting standards.
Changes in accounting policy and disclosures
New standards, amendments and interpretations
In the current year, the Group applied a number of new and amendments to IFRS
Accounting Standards issued by the International Accounting Standards Board
("IASB") that are mandatorily effective for an accounting period that begins
on or after 1 January 2024. Their adoption has not had any material impact on
the disclosures or on the amounts reported in these financial statements.
› Amendments to IAS 1 Presentation of Financial Statements.
› Amendments to IFRS 16 Leases -Lease Liability in a Sale and Leaseback.
› Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures - Supplier Finance Arrangements.
Further narrow scope amendments have been issued which are mandatory for
periods commencing on or after 1 January 2025. The application of these
amendments will not have any material impact on the disclosures, net assets or
results of the Group.
Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are described in our
2024 Annual Report. We continue to monitor the global inflationary and
economic pressures along with other geopolitical macro issues.
Critical accounting judgements and significant estimates in applying the
Group's accounting policies
The application of the Group's accounting policies requires judgements in
certain areas and to make estimates and assumptions concerning the future.
These estimates and judgements are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The following are
those areas that are deemed to involve judgements and/or estimation about
matters that have the most significant effect on the amounts recognised in the
financial statements.
Judgements
Capitalisation of development costs
Capitalisation of development costs requires analysis of the technical
feasibility and commercial viability of the project concerned. Capitalisation
of the costs will only be made where there is clear demonstration that future
economic benefit will flow to the Company.
£0.1m was capitalised in relation to development of a Bipolar snare for our
endotherapeutics offering. The product is still in its development stage and
we expect further costs in relation to the project to be capitalised in 2025.
No further development of the Speedboat and CROMA products has been undertaken
with an emphasis on developing the later versions of these devices. No further
development costs have been capitalised in the year. The Group's internal
budgets demonstrate that the products will generate probable future economic
benefits relating to Speedboat and CROMA and therefore there is no impairment
to capitalised development costs.
Operating segments
An entity is required to disclose information to enable users of its financial
statements to evaluate the nature and financial effects of the business
activities in which it engages and the economic environments in which it
operates. In previous years, management have exercised significant judgement
in determining whether presenting segment information on an alternative basis
would better adhere to this core principle.
Whilst the operations in different geographical locations form a fundamental
part of the Group's long-term strategy, they are in the early stages of
development and the Group continues to focus on the development and
commercialisation of its key range of unique endoscopic surgical devices and
CROMA Advanced Energy Platform. In making their judgement, the Directors
considered the Group's activities and the internal reporting structures and
information regularly reviewed by the entity's chief operating decision-maker
to make decisions about resources to be allocated and assessing performance.
As a result of the sale of Creo Medical Europe, the above determination is
deemed to remain consistent and under continuing operations there is in fact
less judgement in reaching this decision.
As such following the assessment, the Directors concluded that financial
information at a consolidated Group level appropriately reflects the business
activities in which the Group is currently engaged, and the economic
environment in which it operates. As the Group continues to evolve this will
be reassessed and the need for further disclosure considered.
Estimates
Recognition of deferred tax asset
Management judgement is required on whether the Group should recognise any
deferred tax assets for losses. A deferred tax asset is recognised only to the
extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised.
Given the nature and stage of development of Creo Medical Limited there are
significant losses accumulated to date. To determine whether a deferred tax
asset should be recognised in relation to the future tax deduction that these
losses represent, the Directors have considered the estimated profits over a
medium to long-term forecast and the events required to achieve such
forecasts.
Forecasts for Creo Medical Limited continue to show tax losses for at least
the medium term (to four years) as the Group continues to develop and
commercialise its products. Given the extent of uncertainty with forecasting
over a longer- term horizon, it is determined that there is not the level of
convincing evidence that sufficient taxable profit will be available against
which further tax losses or tax credits can be utilised. Thus, there is
considered to be insufficient certainty over the timing and amount of loss
recoverability for any further deferred tax asset to be recognised. The
sensitivity of this estimate is not deemed to be material.
A deferred tax asset in relation to losses will be recognise within Assets
held for sale, given this has been effectively purchase subsequent to the date
of these financial statements the estimate is not deemed to be significant.
Carrying value of goodwill
Our annual impairment assessment for Goodwill is deemed to be a significant
estimate as it involves future cashflow projections and assumptions which can
have a significant impact on the carrying value of the goodwill. At the
balance sheet date all value in relation to Goodwill in the group is within
the asset held for sale, given the sale has completed before the signing of
these accounts there is deemed to be no risk of impairment to the values on
the balance sheet and therefore the carrying value is supported by the profit
on the sale. The Asset held for sale of £27.1m has been sold for €72m,
evidence clear headroom in the carrying value.
Aber Electronics Goodwill of £0.0m (2023: £1.5m) has been fully impaired in
the year, this charge is shown within discontinued operations.
Assets and liabilities held for sale
Any non-current assets, or disposal groups comprising assets and liabilities,
are classified as held for sale if it is highly probable that they will be
recovered primarily through sale rather than through continuing use. Such
assets, or disposal groups, are generally measured at the lower of their
carrying amount and fair value less costs to sell. Any impairment loss on a
disposal group is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro-rata basis, except that no loss is allocated
to inventories, financial assets, deferred tax assets, employee benefit
assets, investment property or biological assets, which continue to be
measured in accordance with the Group's other accounting policies.
Impairment losses on initial classification as held for sale or held for
distribution and subsequent gains and losses on remeasurement are recognised
in profit or loss. Once classified as held for sale, intangible assets and
property, plant and equipment are no longer amortised or depreciated.
Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which: - represents a separate major line of business or
geographic area of operations; - is part of a single coordinated plan to
dispose of a separate major line of business or geographic area of operations;
or - is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held for sale.
When an operation is classified as a discontinued operation, the comparative
Consolidated Income Statement and the comparative Consolidated Statement of
Comprehensive Income are represented as if the operation had been discontinued
from the start of the comparative year.
Segmental reporting
An entity is required to disclose information to enable users of its financial
statements to evaluate the nature and financial effects of the business
activities in which it engages and the economic environments in which it
operates. In previous years, management have exercised significant judgement
in determining whether presenting segment information on an alternative basis
would better adhere to this core principle.
Whilst the operations in different geographical locations form a fundamental
part of the Group's long-term strategy, they are in the early stages of
development and the Group continues to focus on the development and
commercialisation of its key range of unique endoscopic surgical devices and
CROMA Advanced Energy Platform. In making their judgement, the Directors
considered the Group's activities and the internal reporting structures and
information regularly reviewed by the entity's chief operating decision-maker
to make decisions about resources to be allocated and assessing performance.
As a result of the sale of the European business, the above determination is
deemed to remain consistent and under continuing operations there is in fact
less judgement in reaching this decision.
As such following the assessment, the Directors concluded that financial
information at a consolidated Group level appropriately reflects the business
activities in which the Group is currently engaged, and the economic
environment in which it operates. As the Group continues to evolve this will
be reassessed and the need for further disclosure considered.
2. Revenue and other operating income
The revenue split between the Group for 2024 was as follows:
12 months to 31 December 2024 12 months to 31 December 2023
(All figures £m) Continuing Discontinued Total Continuing Discontinued Total
Kamaptive - - - 1.7 - 1.7
Creo Core Products 4.0 - 4.0 2.3 - 2.3
Creo Consumables - 26.7 26.7 - 26.8 26.8
Total 4.0 26.7 30.7 4.0 26.8 30.8
12 months to 31 December 2024 12 months to 31 December 2023
(All figures £m) Continuing Discontinued Total Continuing Discontinued Total
UK 1.7 7.2 8.9 2.9 6.6 9.5
Europe 1.2 19.5 20.7 0.5 20.2 20.7
RoW 1.1 - 1.1 0.6 - 0.6
Total 4.0 26.7 30.7 4.0 26.8 30.8
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
3. Loss per share
Loss per share has been calculated in accordance with IAS 33 - Earnings Per
Share using the loss for the year after tax, divided by the weighted average
number of shares in issue.
(All figures £) 31 December 2024 31 December 2023
Loss (27,818,861) (24,013,424)
Loss attributable to equity holders of Company (basic)
Shares (number)
Weighted average number of Ordinary Shares in issue during the year 369,978,970 313,004,399
Loss per share Continuing Operations (0.08) (0.08)
Basic and diluted
Total Loss (27,698,759) (21,720,908)
Loss attributable to equity holders of Company (basic)
Shares (number)
Weighted average number of Ordinary Shares in issue during the year 369,978,970 313,004,399
Loss per share (0.08) (0.07)
Basic and diluted
Ordinary Shares start of year 361,251,418 181,545,885
Issued in year 225,024 796,478
Issue 1 - Ordinary
Issued with months remaining 11 11
Issue 2 - Ordinary 303,428 168,548,909
Issued with months remaining 5 9
Issue 3 - Ordinary 50,369,109 10,000,000
Issued with months remaining 2 5
Issue 4 - Ordinary - 360,146
Issued with months remaining - 5
Issue 5 - Ordinary - -
Issued with months remaining - -
Closing Ordinary Shares 412,148,979 361,251,418
Average Ordinary Shares 369,978,970 313,004,399
Basic EPS (0.08) (0.07)
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
4. Share Capital
31 December 31 December
(All figures £m) 2024 2023
Balance at start of the year 361,254 181,548
Issue of share capital
Number of shares 50,897,561 179,705,533
Price per share (£) 0.001 0.001
Share value (£'m) 50,898 179,706
Balance at 31 December 412,152 361,254
Where figures are shown "0.0" this means the figure is lower than £50,000.
Where figures show "-" this means the value is nil
5. Post balance sheet events
On 12 February 2025 Creo announced the completion of the sale of 51% of the
issued share capital of Creo Medical S.L.U. ("Creo Medical Europe"), a wholly
owned subsidiary of Creo, to Micro-Tech (NL) International B.V., a wholly
owned subsidiary of Micro-Tech (Nanjing) Co. Ltd (SHA: 688029) ("Micro-Tech")
at an equivalent equity value of €72m on a cash-free, debt-free basis. Along
with other customary conditions, completion of the Sale was contingent on
Micro-Tech obtaining Outbound Direct Investment clearance in China along with
Foreign Direct Investment clearances in Spain, France, Belgium and Germany
which were obtained. After the settling of debt of €6.3m, net proceeds of
€30.4m were received by the Company on 14 February 2025.
On 19 March 2025 Aber Electronics Limited ("Aber"), a wholly owned subsidiary
of Creo Medical Limited, was sold by Creo Medical Limited to its management.
Creo Medical Limited acquired Aber on 11 November 2021 as a step to secure the
supply of a component in the CROMA advanced energy platform. The transaction
releases Creo from any ongoing obligations under the original SPA including
any further earn out payments. The transaction also includes
anti-embarrassment terms which apply until the later of the 10th anniversary
of the transaction and the repayment of all intercompany balances, pursuant to
which Creo would receive up to 20% of the net proceeds of a sale if Aber (or
its business and assets) were acquired by a third party.
6. Discontinued Operations
On 8 July 2024 Creo Medical Group plc signed heads of terms to lose control of
its European subsidiary by selling 51%. The Board assessed that a deal for the
sale of the European business was in an advance state and deemed highly
probable. The circumstances at the year-end were such that the conditions
outlined within IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations for treatment as 'held for sale' and 'discontinued operations' were
met, and this has been reflected in the financial statements.
Similarly, the same circumstances were met with regard to Aber Electronics Ltd
in December 2024.
Impact on the Group Consolidated Income Statement for the year ended 31
December 2024
Underlying EBITDA Comparison 2024 2023 2024 2023
Continuing Continuing Discontinued Discontinued
Adjusted EBITDA (22.3) (20.9) 2.2 4.1
R&D tax credit changes 0.8 - - -
Kamaptive Margin 0.8 - - -
Adjusted EBITDA (normalised) (20.7) (20.9) 2.2 4.1
Restated Adjusted EBITDA
2024 2024 2024
(All figures £m) Continuing Discontinued Total
Revenue 4.0 26.7 30.7
Cost of sales (2.1) (14.2) (16.3)
Gross Profit 1.9 12.5 14.4
Other operating income 0.0 - 0.0
Underlying Administrative expenses (26.2) (10.3) (36.5)
R&D expenditure recovered via tax credit scheme 2.0 - 2.0
Adjusted EBITDA (22.3) 2.2 (20.1)
Exceptional - Adjusted Items (5.0) (1.6) (6.6)
Depreciation & Amortisation (1.5) (1.0) (2.5)
Operating (Loss)/profit before taxation (28.8) (0.4) (29.2)
Finance expenses (0.4) (0.3) (0.7)
Finance income 0.2 - 0.2
Loss before tax (29.0) (0.7) (29.7)
Taxation 1.2 (0.2) 1.0
(Loss)/Profit for the year (27.8) (0.9) (28.7)
2023 2023 2023
(All figures £m) Continuing Discontinued Total
Revenue 4.0 26.8 30.8
Cost of sales (1.7) (13.8) (15.5)
Gross Profit 2.3 13.0 15.3
Other operating income (0.0) 0.0 (0.0)
Underlying Administrative expenses (26.0) (8.9) (34.9)
R&D expenditure recovered via tax credit scheme 2.8 - 2.8
Adjusted EBITDA (20.9) 4.1 (16.8)
Exceptional - Adjusted Items (4.3) (0.3) (4.6)
Depreciation & Amortisation (1.7) (1.7) (3.4)
Operating (Loss)/profit before taxation (26.9) 2.1 (24.8)
Finance expenses (0.2) (0.2) (0.4)
Finance income 0.7 - 0.7
Loss before tax (26.4) 1.9 (24.5)
Taxation 2.7 0.1 2.8
(Loss)/Profit for the year (23.7) 2.0 (21.7)
Impact on the Group Consolidated Income Statement for the year ended 31
December 2024
2024 2023
(All figures £m) Discontinued Discontinued
Revenue 26.7 26.8
Cost of sales (14.2) (13.8)
Gross Profit 12.5 13.0
Other operating income - 0.0
Underlying Administrative expenses (10.3) (8.9)
Adjusted EBITDA 2.2 4.1
Exceptional - Adjusted Items (1.6) (0.3)
Depreciation & Amortisation (1.0) (1.7)
Operating (Loss)/profit before taxation (0.4) 2.1
Finance expenses (0.4) (0.2)
Finance income - -
Loss before tax (0.8) 1.9
Taxation (0.1) 0.1
(Loss)/Profit for the year (0.9) 2.0
Effects of business disposals on the financial position of the Group in FY24
Held For sale 31 December
(All figures £m) 2024
Intangible assets 5.8
Goodwill 16.9
Property, plant and equipment 1.9
Deferred tax 0.2
Inventories 4.6
Trade and other receivables 7.9
Cash and cash equivalents 3.6
Total assets held for sale 40.9
Interest bearing liabilities 9.6
Deferred tax liability 1.4
Trade and other payables 3.2
Total liabilities held for sale 14.2
Net Asset Held for Sale 26.7
The Net assets held for sale at the balance sheet date were sold for a total
of €72m, with net proceeds of €30.4m after debt for the controlling
interest. This represents a profit on the sale of £29.3m before costs.
Similarly, Aber Electronics completed and is an immaterial transaction post
year end.
Richard Rees
Chief Financial Officer
18 May 2025
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