Last close As at 05/08/2026
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Market capitalisation
GBP58m
Research: Healthcare
Creo Medical has announced the sale of a majority (51%) stake in its European consumable business to Chinese medical-device manufacturer Micro‐Tech for an enterprise value of €72m (2.3x EV/sales; 20x EV/EBIT). The deal is expected to complete in Q125 and will net the company c €30m (£25m) in dry powder. We see the sale of this mature business as a strategic move, providing liquidity as Creo accelerates its effort to launch its core suite of electrosurgical devices and partner its proprietary Kamaptive technology, both areas of higher growth potential. The European consumables business, which primarily includes Albyn Medical (acquired by Creo in July 2020), will likely be accounted as an investment in associates, requiring adjustments to our forecasts, following deal closure. We keep our estimates unchanged for now.
Creo Medical |
Consumables business divested in strategic move |
Business update |
Healthcare equipment |
19 September 2024 |
Share price performance
Business description
Analysts
Creo Medical is a research client of Edison Investment Research Limited |
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Creo Medical has announced the sale of a majority (51%) stake in its European consumable business to Chinese medical-device manufacturer Micro‐Tech for an enterprise value of €72m (2.3x EV/sales; 20x EV/EBIT). The deal is expected to complete in Q125 and will net the company c €30m (£25m) in dry powder. We see the sale of this mature business as a strategic move, providing liquidity as Creo accelerates its effort to launch its core suite of electrosurgical devices and partner its proprietary Kamaptive technology, both areas of higher growth potential. The European consumables business, which primarily includes Albyn Medical (acquired by Creo in July 2020), will likely be accounted as an investment in associates, requiring adjustments to our forecasts, following deal closure. We keep our estimates unchanged for now.
Year, end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
27.2 |
(28.6) |
(13.5) |
0.0 |
N/A |
N/A |
12/23 |
30.8 |
(22.1) |
(6.2) |
0.0 |
N/A |
N/A |
12/24e |
40.1 |
(16.6) |
(3.9) |
0.0 |
N/A |
N/A |
12/25e |
54.1 |
(4.8) |
(1.0) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Creo’s European business primarily comprises Albyn Medical, which markets both own and third-party consumables and systems (primarily gastrointestinal endoscopy-related but also covering the endourology, urology, urogynaecology areas), with a core focus on the UK and European markets. The company had 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 a further 5% stake in March 2022 (for €1.2m and an additional €1.7m as the first earnout tranche) followed by the balance in April 2023 (for €1.2m and the pending €1.0m earnout tranche). The European operations accounted for the majority (c 87%) of Creo’s FY23 revenues of £30.8m, although year-on-year growth rates were relatively modest (7.7%) given the maturity of the business. In 2023 the business contributed €3.6m to profits and €8.8m in net assets.
We believe the decision to divest a majority stake in the consumables business, as well as the timing of the deal, is a calculated move by the company as it prepares to accelerate the commercial launch efforts of its electrosurgical devices and drive greater effort towards partnership opportunities for its Kamaptive technology and Croma platform. In mid-2023, Creo’s flagship product, Speedboat Inject, received regulatory approval in upper GI procedures. This was followed by the launch of its slimmest device to date, Speedboat UltraSlim, in late 2023. We expect the launch of two other devices, MicroBlate and SpydrBlade, in late 2024 or early 2025. In July 2024, Creo expanded its R&D partnership with Intuitive Surgical, a market-leading manufacturer of surgical robots – a collaboration that holds significant growth potential for Creo.
The completion of the deal with Micro‐Tech is expected by Q125 and will be contingent on regulatory clearances. Micro‐Tech holds a 30% stake in China’s endoscopy device market, and we expect Creo to also leverage Micro-Tech’s expertise and footprint to grow its franchise. We will adjust our estimates for this recent announcement following deal completion.
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Research: Investment Companies
Utilico Emerging Markets Trust (UEM) is managed by Charles Jillings, at specialist value-based investor ICM. He reports that, operationally, the trust’s investee companies are performing extraordinarily well, although this is not being reflected in the market. The manager suggests that investors have multiple distractions including concerns about a US recession, the US presidential election and wars in Ukraine and the Middle East. UEM’s investments in infrastructure and utility assets ensure the fund has a consistently low beta. The use of gearing has resumed following the arrangement of a new £50m debt facility, reflecting Jillings’ bullish outlook. UEM has solidly outperformed the MSCI Emerging Markets (EM) Index over the last three years. Since inception in 2005, the trust’s NAV total return has compounded at 9.2% per year.