Currency in GBP
Last close As at 25/03/2023
GBP0.26
▲ −0.35 (−1.33%)
Market capitalisation
GBP92m
Research: Healthcare
In a bid to strengthen its balance sheet and support development programmes, Creo has announced a £28.5m (£26.8m net proceeds) fund- raise through institutional investors by placing 142.5m new ordinary shares at 20p/share (a 28% discount to the 15 February closing price). The fund-raising, subject to shareholder approval (AGM expected on 8 March), was oversubscribed against the minimum target of £25m, indicating strong shareholder support. In addition, Creo has announced an open offer to shareholders to raise another £5.2m in funds via the conditional issue of c 26m ordinary shares. Creo plans to use these funds to support its commercialisation plans, ongoing R&D efforts, licensing and partnering opportunities as well as working capital requirements. Notably, we estimate these funds to be sufficient to take Creo to net profitability (H126 as per our projections). We will incorporate the fund-raise into our estimates following shareholder approval and completion of the process.
Creo Medical |
c £30m raised in 48 hours to back growth plans |
Fund-raising update |
Healthcare equipment and services |
21 February 2023 |
Share price performance Business description
Analysts
Creo Medical is a research client of Edison Investment Research Limited |
In a bid to strengthen its balance sheet and support development programmes, Creo has announced a £28.5m (£26.8m net proceeds) fund- raise through institutional investors by placing 142.5m new ordinary shares at 20p/share (a 28% discount to the 15 February closing price). The fund-raising, subject to shareholder approval (AGM expected on 8 March), was oversubscribed against the minimum target of £25m, indicating strong shareholder support. In addition, Creo has announced an open offer to shareholders to raise another £5.2m in funds via the conditional issue of c 26m ordinary shares. Creo plans to use these funds to support its commercialisation plans, ongoing R&D efforts, licensing and partnering opportunities as well as working capital requirements. Notably, we estimate these funds to be sufficient to take Creo to net profitability (H126 as per our projections). We will incorporate the fund-raise into our estimates following shareholder approval and completion of the process.
Year end |
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.
On 16 February 2023, Creo announced a private placement to certain institutional and retail investors to raise a minimum of £25m in net proceeds through an accelerated book building process. The issue was oversubscribed, with the company raising £28.5m in gross proceeds (£26.8m net) via an issue of 142.5m new shares at 20p/share. Of this, £2.1m has been subscribed by Creo senior management and directors. The additional open offer of up to £5.2m is available to all existing eligible shareholders (one share for every seven shares held on the record date, 15 February 2023), implying the issue of up to 26,048,909 new shares at the issue price of 20p/share. Post shareholder approval, Creo will submit an application to the AIM for the admission of the new shares (with trading expected to commence on 9 March). We note that the fund-raise will dilute existing shareholders by approximately 48%, although the combined gross proceeds of £33.7m should capitalise Creo to profitability (H126 per our estimates), an encouraging sign particularly given the current tight capital market situation.
Creo plans to use the proceeds to accelerate its commercialisation efforts across the United States, EMEA and Asia-Pacific markets and to develop further licensing and partnership opportunities for its core Kamaptive technology. In addition, the company intends to strengthen its R&D pipeline and anticipates meeting all medium-term obligations though these proceeds.
FY22 was marked by several developments for Creo, including increased adoption of its Speedboat Inject device, new robotic deals with Intuitive and CMR Surgical, and multiple heads of terms agreements signed. For 2023, we expect commercialisation of the core technology portfolio to remain a key strategic priority across global markets.
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Research: Financials
At its capital markets day (CMD) Molten Ventures highlighted its successful growth since it listed in 2016, having grown its gross portfolio value by a CAGR of 59% (supported by several capital raises). We note that Molten posted a six-year NAV total return (TR) to end-September 2022 of c 15% pa. Since IPO, Molten has deployed an average £133m in capital per year (excluding secondary investments) and received £452m in total realisation proceeds. Portfolio growth has been underpinned by the 24% pa growth in European venture capital (VC) series A, B and C deal volumes (Molten’s ‘sweet spot’) between 2015 and 2022 (based on PitchBook data).
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