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Currency in GBP
Last close As at 09/06/2023
GBP0.25
▲ 2.00 (8.60%)
Market capitalisation
GBP89m
Research: Healthcare
Creo Medical announced its H122 trading update ahead of full interim results in September. H122 revenue was around £13.5m, a c 5% y-o-y increase compared to H121 (£12.9m) and a 10% increase over H221 (£12.3m). The uptick was driven by the improving traction of Speedboat Inject and initial revenues from the May 2022 licensing agreement with Intuitive Surgical. The underlying EBITDA loss improved by more than 20% from H221, driven by higher gross margins and reduced operating expenses, which translated into a lower cash burn for the period. Creo continues to seek other licensing partners and potential strategic investors to support future growth. We await the announcement of the interim results to update our estimates and valuation of the company.
Creo Medical |
Continued growth momentum in H122 |
H122 trading update |
Healthcare equipment & services |
4 August 2022 |
Share price performance
Business description
Analysts
Creo Medical is a research client of Edison Investment Research Limited |
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Creo Medical announced its H122 trading update ahead of full interim results in September. H122 revenue was around £13.5m, a c 5% y-o-y increase compared to H121 (£12.9m) and a 10% increase over H221 (£12.3m). The uptick was driven by the improving traction of Speedboat Inject and initial revenues from the May 2022 licensing agreement with Intuitive Surgical. The underlying EBITDA loss improved by more than 20% from H221, driven by higher gross margins and reduced operating expenses, which translated into a lower cash burn for the period. Creo continues to seek other licensing partners and potential strategic investors to support future growth. We await the announcement of the interim results to update our estimates and valuation of the company.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
9.4 |
(23.0) |
(12.7) |
0.0 |
N/A |
N/A |
12/21 |
25.2 |
(30.3) |
(15.0) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Creo continued to record steady growth momentum in H122, with the revenue uptick supported by improving traction from the core Speedboat Inject device and initial revenues from the robotics deal with Intuitive (for its Kamaptive technology). However, we expect Albyn Medical to have continued to be the primary revenue contributor for the period.
During H122, the number of clinicians equipped to provide training on Creo’s technology doubled (over H221) which, according to management, has resulted in a 100% increase in both procedure volumes and regular users globally. The company also launched several complementary products (marketed in Europe) that it expects to help widen its product offering in the US and convert into incremental revenues per procedure.
Improved gross margins along with declining operating expenses improved underlying EBITDA by 20% over H221 (we calculate the H122 EBITDA loss as c £13.5m versus £16.9m in H221). This also translated to reduced cash burn rates.
As COVID-19 headwinds subside, Creo was able to develop its training programme, organise several regional and multinational events, and expand its access to new territories, notably in the Asia-Pacific region (in particular Singapore and Thailand).
In May 2022, Creo announced a long-term robotics collaboration with category leader Intuitive Surgical (a US-based medical robotics developer of minimally invasive procedures) to co-develop undisclosed Creo product(s) to be compatible with Intuitive’s robotic devices. The agreement entails potential royalty and milestone payments for Creo and could translate to sizeable growth potential for the company. We expect Creo to disclose further details in the forthcoming interim results in September 2022. In the meantime, our estimates remain under review.
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