Currency in GBP
Last close As at 02/06/2023
GBP0.25
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Market capitalisation
GBP86m
Research: Healthcare
Creo Medical has announced that it has acquired the remaining 5% stake in Albyn Medical (for €1.2m), a subsidiary that is Creo’s primary revenue contributor (c €20m in FY22 sales, per our estimates). The payout also included a previously agreed €1m earnout payment. Albyn Medical is a seller of own and third-party consumables and systems (primarily gastrointestinal (GI) endoscopy related) with core focus on the UK and European markets and complements Creo’s core portfolio of minimally invasive electrosurgical devices. Creo acquired a 90% stake in Albyn in July 2020 for an equity value of €24.8m and €2.7m in performance-related payments over two years. Creo then acquired another 5% stake in March 2022 (for €1.2m and an additional €1.7m as the first earnout tranche) followed by the balance in the latest announcement. We expect the franchise to contribute steadily to the top line, driven by ongoing expansion efforts into the US market.
Creo Medical |
Albyn Medical stake acquired as wholly owned |
18 April 2023 |
Share price performance Business description
Analysts
Creo Medical is a research client of Edison Investment Research Limited |
Creo Medical has announced that it has acquired the remaining 5% stake in Albyn Medical (for €1.2m), a subsidiary that is Creo’s primary revenue contributor (c €20m in FY22 sales, per our estimates). The payout also included a previously agreed €1m earnout payment. Albyn Medical is a seller of own and third-party consumables and systems (primarily gastrointestinal (GI) endoscopy related) with core focus on the UK and European markets and complements Creo’s core portfolio of minimally invasive electrosurgical devices. Creo acquired a 90% stake in Albyn in July 2020 for an equity value of €24.8m and €2.7m in performance-related payments over two years. Creo then acquired another 5% stake in March 2022 (for €1.2m and an additional €1.7m as the first earnout tranche) followed by the balance in the latest announcement. We expect the franchise to contribute steadily to the top line, driven by ongoing expansion efforts into the US market.
Business update |
Year |
Revenue |
PBT* (£m) |
EPS* |
DPS |
P/E |
Yield |
12/20 |
9.4 |
(23.0) |
(12.8) |
0.0 |
N/A |
N/A |
12/21 |
25.2 |
(29.7) |
(14.6) |
0.0 |
N/A |
N/A |
12/22e |
27.1 |
(26.4) |
(12.4) |
0.0 |
N/A |
N/A |
12/23e |
31.0 |
(21.8) |
(10.2) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Creo Medical acquired Albyn Medical in July 2020 for equity value of €24.8m plus up to €2.7m in performance-related milestones. Albyn designs, manufactures and commercialises a wide variety of products covering the endourology, urology, urogynaecology, endoscopy, GI motility and coloproctology areas (although the primary revenue contribution came from the GI endoscopy space) and was a profitable franchise (€1.7m in PBT in FY19). The subsidiary has a 40-person sales and marketing team that provides the parent company with an established platform to commercialise its own portfolio of technology products in the region. Albyn was consolidated as Creo’s European consumables business (along with the subsequently acquired Boucart Medical and Aber Electronics businesses).
With Creo’s core electrosurgical device business (led by Speedboat Inject) in its infancy (albeit ramping up swiftly), the mature consumables business has been the key revenue contributor, accounting for over 90% of the FY21 and FY22 group revenues (€24.8m and €24.7m in FY22 and FY21, respectively, per our calculations). During 2022, Creo launched several endotherapy products (currently marketed in Europe) in the United States as part of its plan to offer bundled products with its core technology/asset portfolio to potentially generate additional revenue per procedure. With incremental sales opportunity from the United States, we expect a steady revenue contribution from the franchise in the medium term.
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