Final Results

RNS Number : 3506M

Creo Medical Group PLC

23 May 2022

 

Creo Medical Group plc

("Creo", the "Group" or the "Company")

Final Results

Building momentum: Strong strategic and operational progress

Creo Medical Group plc (AIM: CREO), a medical device company focused on the emerging field of surgical endoscopy, announces its audited final results for the 12 months ended 31 December 2021 .

Financial Highlights:

·   Total sales in the period of £25.2m (FY 2020: £9.4m)

·   Cash and cash equivalents of £43.5m at 31 December 2021 (FY 2020: £45.1m), including £34.3m net raised through Placing and Open Offer in September 2021

·   R&D expenditure in the year was £12.9m (FY 2020: £10.2m)

·   Operating loss of £29.9m for FY 2021 (FY 2020: £23.5m) including £2.6m share based payments (FY 2020: £0.7m), in-line with management expectations

·   Net assets of £73.3m at 31 December 2021 (FY 2020: £62.8m)

Commercial Highlights (including post-period end):

·   Over 1,000 Speedboat Inject procedures performed to date

·   Speedboat Inject procedure volumes doubled over previous year

·   Pipeline of clinicians to be trained under Clinical Education Programme has doubled

·   25% increase in the Group's direct sales force since the start of 2021

·   New market penetration with multiple cases of Peroral Endoscopic Myotomy ("POEMS") procedures in the US using Speedboat Inject

·   Heads of terms ("HoTs") agreed with multiple partners, with advanced discussions ongoing

·   Strengthened IP portfolio with 376 granted patents and 870 pending patents

·   Health economic study indicated that savings of up to £10k could be saved per Speedboat Inject procedure versus traditional surgical outcomes, with the NHS saving over £2m cumulatively to date

·   Positive outcome on first pancreatic ablation using MicroBlate Fine

Operational Highlights :

·   Strengthening of supply chain and R&D capabilities through acquisition of Aber Electronics Limited ("Aber") in November 2021

·   Fully integrated Albyn Medical and Boucart Medical into the Creo family, operating in-line with expectations under the Creo brand

·   Completion of the purchase of the freehold of Creo House, Chepstow, and the adjacent building for £4.25m to support the Company's planned and sustained growth

·   Opening of US office on the East Coast in Danbury, Connecticut, to provide a base for US operations and enable in-person clinical and education programmes

·   Established APAC Hub based in Singapore

Craig Gulliford, Chief Executive Officer, commented:

"It has been a year of strong progress for the Group, as we continue to build momentum and make progress against our mission of improving patient outcomes through our 'Build, Buy and Partner' strategy. We doubled our pipeline of clinicians who are to be trained under our Clinical Education Programme, with a significant proportion of those trained during the year now being product users. Our US office opening, as well as the purchase of the freehold of Creo House, and the post-period end opening of our Singapore regional hub, have all been key steps for the Group's commercial growth and the increased education of clinicians across our target markets.

"Our acquisition of Aber Electronics during 2021 has added specialist expertise to our team whilst enhancing a key element of our supply chain. Our prior acquisitions of Albyn Medical and Boucart Medical have proved to be successful, with both having expanded our commercial footprint across Europe, and are now fully integrated within the Group.

"We have signed non-binding heads of terms with a number of carefully selected partners, in order to leverage our core Kamaptive technology in therapeutic areas that the Group is not already operating.

"Looking ahead we remain well-positioned to continue our commercial growth and will continue to evaluate further potential strategic acquisitions. We expect that as restrictions related to the COVID-19 pandemic continue to ease throughout 2022, we will see increased rates of clinical education and increased rates of use of our technology in elective cases."

Creo Medical Group plc	www.creomedical.com
Richard Rees (CFO)	[phone]
Cenkos Securities plc	[phone]
Stephen Keys / Camilla Hume (NOMAD)
Michael Johnson / Russell Kerr (Sales)
Numis Securities Limited (Joint Broker) Freddie Barnfield / James Black / Duncan Monteith	[phone]
Walbrook PR Ltd	Tel: + 44 ( 0)20 7933 8780 or [e-mail]
Paul McManus / Sam Allen  / Phillip Marriage	Mob: [phone]

About Creo Medical 

Creo Medical 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

Chairman's statement

Like most PLC Chairs, I would have rather not been talking to shareholders about the COVID-19 pandemic for a third successive year. The CEO statement below details how restrictions on travel, limited access to hospitals and delays in elective procedures have unavoidably slowed the clinical adoption and commercial rollout of our CROMA Advanced Energy Platform around the world. But despite these challenges, we have further broadened and deepened our range of products during the period to treat a longer list of medical indications and so improve the lives of a broader group of patients. This continues to stimulate interest in adopting CROMA from our clinical champions, especially in Europe and the US where patients are benefitting from Creo's technologies.

Governance

We have not allowed the COVID-19 pandemic to hinder our corporate governance efforts, which remain front and centre of our work. In the 2021 Report and Accounts, which will be published in May, we set out details in respect of our continued ESG commitment, information regarding our s172 compliance with examples from the year, as well as the summary of our compliance with the Quoted Companies Alliance (QCA) Corporate Governance Code. As we continue to grow, both organically, through acquisition and through partnerships, the Board is unanimous in its view that it is strong governance that underpins the success of our activities and provides a sound framework for the business to operate within.

Management and staff

As in previous years, the Board would like to applaud our management team and all our employees for another year of important strategic milestones. Together they have shown perseverance, flexibility and inventiveness in developing Creo's products and their international markets, despite the headwinds described above which have limited the rate at which we were able to train new users globally. Thankfully, our rightly celebrated colleagues in the vaccine sector have been remarkably successful in developing and rolling out effective vaccines in our priority UK, Continental European and North American markets. We have been encouraged to see the cautious lifting of travel and other restrictions in our key markets in recent months.

Integration of acquisitions

The successful integration of the two acquisitions completed in 2020 has been a strategic priority during the year. This nicely illustrates our Build - Buy - Partner strategy in action and lays the groundwork for significant shareholder value creation. The Board thanks the commercial teams led by David Woods and Luis Collantes who have worked tirelessly together across geographies, time zones and specialities to leverage Creo's growing and unique set of strengths and skills.

Albyn Medical and Boucart Medical are both well integrated into the Group and have been rebranded under the Creo Medical umbrella. This offers an unrivalled one-stop solution across Europe in the fields of gastroenterology, urology and endoscopy, backed by strong customer service and Creo's outstanding innovation, to deliver a unique and winning combination to our customers. The timing of the acquisitions was ideal as it has given the business a sound commercial footing that would not have been feasible to build organically during a global pandemic.

Shareholders

It is customary for the chair on behalf of the Board to thank fellow shareholders for their continuing support during the year under review and we continue that custom sincerely. The successful Placing and Open Offer raising £34.3 million (after costs) in September 2021 was another important strategic milestone. Executed in volatile and challenging small cap capital markets, the placing has widened our already strong and deep shareholder base. We appreciate the patience and support of our longstanding shareholders and welcome our new holders onto the share register.  

The Company is deploying the proceeds of the Placing to accelerate our growth strategy and further product development. With a strengthened balance sheet we can continue on the path to being a truly global independent MedTech innovator able to operate in a market led by much larger US and Asian companies. We need these resources to optimise the opportunities for our world class technology and products to compete with competitors, support our partners in all applicable markets and strengthen our position in negotiations with potential licensing partners.

We encourage active dialogue with all shareholders to ensure our strategy and business model is well understood and that we, in turn, understand the priorities of our shareholders. Notwithstanding the restrictions on in-person meetings, both the Executive and Non-Executive Directors have maintained and developed frequent contact with shareholders backed by regular updates via RNS and plan more of the same in 2022.

In November, we announced the appointment of Numis as Joint Broker alongside our Nominated Adviser and broker, Cenkos Securities. This provides shareholders and potential shareholders with widened equity research coverage and enhanced international share trading facilities in the Company's shares.

ESG

Ever since our foundation, Creo Medical has taken seriously our responsibility to the environment, our diverse stakeholders (led by the patients) and to ethical, transparent and well governed business practices. As we grow internationally, we are putting in place a sector leading ESG framework which is outlined in our 2021 Report and Accounts.

Outlook

Creo Medical continues to innovate, to educate and to commercialise. While nothing can be guaranteed in an uncertain world, the Board looks forward to further updating shareholders during 2022 on important product advancements, meaningful commercial progress and landmark partnerships. The sound progress made over the past year underpins the Board's strong confidence in the Group's opportunities in 2022 and beyond.

Charles Spicer

Non-Executive Chairman

22 May 2022

Chief Executive's Review

I am immensely proud of our progress this year, despite difficult circumstances in all our regional markets as COVID-19 restrictions persisted. During the year we continued to make strong progress against our strategic objectives and build momentum through sustained commercial progress. Revenue from the Group's core Creo product portfolio is growing and is in-line with management's cumulative revenue forecasts at the time of IPO in December 2016 despite the adverse conditions over the last two years.

We have seen significant growth in commercial orders and adoption of Speedboat Inject in the US and Europe. Pleasingly, we have made significant progress against our target to leverage our IP through our Kamaptive brand by agreeing Heads of Terms ("HoTs") with a number of carefully selected partners to provide access to our advanced energy in large and growing markets where the Group is not currently operating.

The opening of the Group's US headquarters during 2021 has helped to support Creo's commercial roll-out in the key US market. Post-period end, we also opened our regional hub in Singapore to support the commercial roll-out of Creo's products in the APAC region and this is expected to satisfy the backlog of demand, following numerous distributor agreements being signed throughout 2021. In addition, Creo completed the purchase of the freehold of Creo House, our head office in Chepstow, along with the adjacent building, to support the Group's planned and sustained growth.

These all represent important steps on our journey to commercialisation. Our successful Placing and Open Offer in September 2021 positions us well to deliver our strategic objectives and take the business to the next stage of its development: to strengthen our product portfolio and enhance our Kamaptive Advanced Energy Technology for licensing and partnerships.

Building momentum

We have taken great strides in delivering against our three strategic pillars:  Build, Buy and Partner.

Build

Over the course of 2021, Creo's pipeline of doctors waiting to be trained through our Clinical Education Programme has more than doubled compared to 2020. This demand continues to build.

The number of global training centres across our direct markets increased threefold during 2021. Creo trained a significant number of leading clinicians in 2021, who are now product users, and the Group expects this number to rise in 2022.

Even at this early stage, clinicians have identified additional uses, for Speedboat Inject in new procedures in the upper gastrointestinal tract ("GI"), including successful application in Peroral Endoscopic Myotomy ("POEM") procedures, opening up additional markets where our technology can be effective.

Once the final FDA clearance has been received for SpydrBlade Flex, all products in our four technology families - Speedboat, MicroBlate, SlypSeal and SpydrBlade - will be cleared for clinical use in both the US and Europe. Our focus this year has been on delivering our best-in-class Clinical Education Programme to provide training for leading clinicians in the use of our Speedboat technology and CROMA Advanced Energy Platform.

The recently opened US office in Danbury, Connecticut includes a learning centre and fully equipped training laboratory where our US based team has been able to demonstrate products and provide lab-based training sessions. With on-going travel restrictions across the world and the postponement of elective procedures to, understandably, focus resources on caring for patients with COVID-19, we have used remote technology extensively for live events, which is yielding positive clinical results and building an active user community.

Our decision to purchase the freehold of Creo House in Chepstow, UK strengthens our infrastructure and provides additional manufacturing capacity for our full suite of devices. It also provides our team with a secure base to allow us to continue to build a world class MedTech company.

Buy

We have made excellent progress in integrating our Albyn Medical and Boucart Medical acquisitions into the Creo family. Both businesses now operate under the Creo Medical brand and the extensive European sales-force is now equipped to sell Creo products across the European markets. This approach is already delivering benefits which will only accelerate as we introduce the full product range into other regions.

Towards the end of 2021, we announced the acquisition of Aber Electronics Limited, a UK based manufacturer and designer of power amplifiers and radio frequency products. As an existing supplier to Creo, this acquisition fits well with our 'Buy' strategy, whilst adding manufacturing operations and specialist microwave and radio frequency capability to Creo's product development for Kamaptive as well as securing a key element of our supply chain.

Partner

Early in 2022, I was pleased to report that we had signed non-binding heads of terms with a number of parties which relate to the Group's SpydrBlade, Cool Plasma and MicroBlate technologies. This is accelerating the development of the "powered by Kamaptive" brand, by enabling partners to leverage our core Kamaptive technology.

We believe that such partnerships have the potential to create shareholder value through granting third-party access to Creo's advanced energy Kamaptive technology in large and growing markets adjacent to those where the Group is already operating. This includes fields such as laparoscopic surgery, robotically assisted surgery, and non-thermal plasma sterilisation.

With the right partners, the Group believes that Creo's technology has the potential to fundamentally change the way that patients are cared for and to improve patient outcomes.

Our people and responsibilities

We are a fast growing organisation - now 290 strong. I have been impressed with the way our management teams have retained and reinforced our strong culture, in particular as we scale up our operations, manufacturing capability, international growth and integrate our acquisitions into the Creo family. We have enhanced our human resources function to support our growth and ensure we operate and think as a global organisation from the start.

Our people are clearly the critical element within this. Without their innovation, can-do spirit and commitment to the business, we would not have delivered the progress we have during the year and I would like to thank each and every one of them for making this possible.

Looking forward

Our mission remains the same: to improve patient outcomes by bringing advanced energy to therapeutic endoscopy.

We see our strong progress in the commercialisation of our innovative, minimally invasive, electrosurgical endoscopy devices accelerating as our user community continues to grow. We anticipate that high vaccination rates in both Europe and the US will lessen the impact of COVID-19 during 2022 and allow clinicians to focus on the huge backlog of elective cases, increasing activity in our key areas of clinical focus - core GI and soft tissue ablation. Whilst continued restrictions in Asia have slowed progress in the region, we have continued to recruit distributors in APAC and in those other markets where we don't have a direct presence. We are well placed to support these distributors as they start to satisfy a backlog in demand in their markets as they emerge from the COVID-19 pandemic.

The successful integration of Albyn Medical and Boucart Medical have transformed our commercial footprint in Europe and we will continue to evaluate other strategic acquisition opportunities to accelerate our reach in other regions including the USA. Along with the development of licensing partners, we will continue our transition to a fully integrated specialty medical device manufacturer with product origination, development and commercialisation capabilities.

2022 has already started positively, with strong performances seen from our core product portfolio. Throughout the rest of the year, we look forward to continuing to execute and expand our three-tiered organic strategy through the education and training of clinicians, the roll-out of our product portfolio in APAC and further commercial orders and adoption of Speedboat Inject in the US and Europe. With our strong cash position and clear strategy, Creo is well positioned to drive shareholder value in 2022.

Craig Gulliford

Chief Executive Officer

 

Financial Review

I am pleased to announce the results for the 12 months to 31 December 2021.The adversity faced by the business from COVID-19 has, in part, been mitigated through the strength of the balance sheet following the 2021 fund raise. Following our Build, Buy Partner strategy, the acquisitions of Albyn Medical and Boucart Medical have been successfully integrated into the business and have brought immediate revenue and positive cash flow to the Group, which strengthens the business and confirms Creo as a platform for future growth.

Revenue and other income

Despite COVID-19 disrupting sales channels and restricting access to clinical training and travel, the Group has made significant progress in establishing sales channels through new products as well as development of our commercial footprint via acquisitions and organic growth. We opened offices in the US, and APAC as well as purchased the land and additional buildings at our UK headquarters. The acquisition of Aber Electronics has helped to secure our supply chain and the acquisitions of Albyn Medical and Boucart Medical in 2020 are generating revenues and positive cashflow to the Group.

Revenues billed in the period in relation to Speedboat Inject and CROMA totalled £0.3m (2020, £32k). £24.9m was generated through distribution sales of Creo Europe (formally known as Albyn and Boucart). Other operating income of £0.05m in the 12-month period to 31 December 2021 (December 2020: £0.05m) relates to research grants.

Gross Margin

Gross margin improved from 42.8% in 2020 to 46.0% in 2021.

Operating loss

The operating loss for the period increased to £29.9m (December 2020: £23.5m), reflecting the increased operating expenses in relation to clinical and development activities together with further investment in headcount and business infrastructure including securing US and APAC offices to support the business and enable it to continue to develop and commercialise its technology. This continued investment in the business will support anticipated growth and development in the coming periods.

The underlying operating loss (also referred to as adjusted EBITDA) for the period was £19.0m (December 2020: £18.0m).

Whilst EBITDA is not a statutory measure, the Board believes it is helpful to include for investors as an additional metric 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 begins to commercialise its approved products. The adjusted EBITDA position excludes share-based payment 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.

			12 months to	12 months to
(All figures £'000)			31 December 2021	31 December 2020
Operating loss			(29,907)	(23,484)
Loss before Income tax			(30,339)	(23,462)
Total comprehensive loss for the period			(26,260)	(20,745)
Underlying operating loss adjustments:
Share-based payments			2,564	728
Depreciation and amortisation			2,562	1,597
R&D expenditure recovered via tax credit scheme			5,744	3,146
Underlying operating loss (non-statutory measure)			(19,037)	(18,013)

 

Tax

The tax credits recognised in the current and previous fiscal year relate mainly to R&D tax credit claims. A deferred tax asset has been recognised in respect of the business combination relating to our Albyn subsidiaries. A £0.75m deferred tax asset has been recognised in respect of tax losses in Creo Medical Limited which we will utilise through group relief of the future profits in Creo Medical UK Limited. No further tax assets in relation to these losses has been recognised due to the uncertainty over the timing of future recoverability.

Expenses

Administrative expenses comprising R&D, operational support, sales and marketing, and finance and administration costs totalled £41.5m (December 2020: £27.6m). R&D spend for the year totalled £12.9m (December 2020: £10.2m) reflecting the continued innovation and development of our technology during the year. Adjusting for share-based payments, depreciation, amortisation and tax income as shown in the table above, underlying administrative expenses are £30.6m (December 2020: £22.1m).

This annualised increase of £8.5m reflects a full year of trade through Creo Europe, the continued investment made by the Group in clinical and development activities and the move from small discrete production batches into full-scale manufacturing. Personnel costs continue to be the largest expense and represent approximately 65% of the Group's underlying administrative expenses.

Loss per share was 15 pence (December 2020: 13 pence).

Dividend

No dividend has been proposed for the period to 31 December 2021 (31 December 2020: £nil).

Cash flow and balance sheet

Net cash used in operating activities was £26.0m (December 2020: £16.3m), driven by the continued investment in research and development and, establishing a US and APAC presence. Net cash used in investing activities was £7.8m (December 2020: £21.0m) driven by the acquisition of Aber Electronics and purchase of land and buildings for UK headquarters. Cash generated from financing activities was £32.0m of which £34.3m was raised through an Open Offer and Share Placement during the period.

Total assets at the end of the period increased to £100.6m (31 December 2020: £92.5m), a 8.8% increase, reflecting the increase in assets and goodwill as a result of the business combination, offset by the operating cash outflow for the period. Cash and cash equivalents at 31 December 2021 was £43.5m (31 December 2020: £45.1m). Net assets were £73.3m (31 December 2020: £62.8m), a 16.7% increase due to fund raise offset by operating loss and share based payment expense.

Accounting policies

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards. The Group's accounting policies have been applied consistently throughout the period and are described in the 2021 Report and Accounts.

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 to budget. 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 clinical education programme, integration of acquired entities, ESG metrics such as carbon emissions and diversity ratios and progress against our build buy partner strategy. All non-financial measures are monitored on a monthly basis.

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 2021 Report and Accounts.

Richard Rees

Chief Financial Officer

Consolidated Statement of Profit and Loss and Other Comprehensive Income

(All figures £'000)				31 December 2021	31 December 2020
Revenue				25,161	9,429
Cost of sales				(13,576)	(5,394)
Gross Profit				11,585	4,035
Other operating income				52	49
Administrative expenses				(41,544)	(27,568)
Operating loss				(29,907)	(23,484)
Finance expenses				(463)	(173)
Finance income				31	195
Loss before tax				(30,339)	(23,462)
Taxation				5,744	3,146
Loss for the year				(24,595)	(20,316)
Exchange loss on foreign subsidiary				(1,896)	(429)
Changes to the fair value of equity investments at fair value through other comprehensive income				231	-
Total comprehensive loss for the year				(26,260)	(20,745)
Loss per Share
Basic and diluted (£)				(0.15)	(0.13)

Consolidated Statement of Financial Position

		As at	As at
(All figures £'000)		31 December 2021	31/12/2020*
Assets
Non-current assets
Intangible assets		8,692	10,268
Goodwill		18,563	18,262
Investments		1,733	500
Property, plant and equipment		8,603	3,378
Deferred tax		1,705	474
Other assets		146	112
		39,442	32,994
Current assets
Inventories		8,504	6,812
Trade and other receivables		4,830	4,593
Tax receivable		4,299	2,973
Cash and cash equivalents		43,534	45,092
		61,167	59,470
Total assets		100,609	92,464
Shareholder equity
Called up share capital		181	158
Share premium		149,448	115,263
Merger reserve		13,603	13,603
Share option reserve		7,940	5,376
Foreign exchange reserve		(2,325)	(429)
Financial Assets at fair value through other comprehensive income		231	-
Accumulated losses		(95,760)	(71,165)
Total equity		73,318	62,806
Liabilities
Non-current liabilities
Interest-bearing liabilities		5,175	6,542
Other liabilities		-	1,873
Deferred tax liability		1,786	1,996
Provisions		593	1,219
			-
		7,554	11,630
Current liabilities
Interest-bearing liabilities		3,705	4,023
Trade and other payables		9,921	8,504
Non interest-bearing loans		1,676	1,790
Other liabilities		4,221	3,474
Provisions		214	237
		19,737	18,028
Total liabilities		27,291	29,658
Total equity and liabilities		100,609	92,464

*Prior year restatement of debtors and creditors, which has no impact on the profit or loss. See restated balance sheet for prior year in the 2021 Annual Report and Accounts.

Consolidated Statement of Changes in Equity

						Changes to the
						fair value of
						equity
						instruments
						at fair value
	Called up				Share	through other	Foreign
	share	Accumulated	Share	Merger	option	comprehensive	Exchange	Total
(All figures £'000)	capital	losses	premium	reserve	reserve	income	Reserve	equity
Balance at 1 January 2019	120	(34,938)	65,836	13,603	3,093	-	-	47,714
Total comprehensive loss for the year
Loss for the financial year	-	(15,911)	-	-	-	-	-	(15,911)
Total comprehensive loss	-	(15,911)	-	-	-	-	-	(15,911)
Transactions with owners, recorded directly in equity
Issue of share capital	30	-	49,276	-	-	-	-	49,306
Equity settled share-based payment transactions	-	-	-	-	1,555	-	-	1,555
Balance at 31 December 2019	150	(50,849)	115,112	13,603	4,648	-	-	82,664
Total comprehensive loss for the year
Loss for the financial year	-	(20,316)	-	-	-	-	-	(20,316)
Other comprehensive loss	-	-	-	-	-	-	(429)	(429)
Total comprehensive loss	-	(20,316)	-	-	-	-	(429)	(20,745)
Transactions with owners, recorded directly in equity
Issue of share capital	8	-	152	-	-	-	-	160
Equity settled share-based payment transactions	-	-	-	-	728	-	-	728
Balance at 31 December 2020	158	(71,165)	115,264	13,603	5,376	-	(429)	62,807
Total comprehensive loss for the year
Loss for the financial year	-	(24,595)	-	-	-	-	-	(24,595)
Other comprehensive loss	-	-	-	-	-	231	(1,896)	(1,665)
Total comprehensive loss	-	(24,595)	-	-	-	231	(1,896)	(26,260)
Transactions with owners, recorded directly in equity
Issue of share capital	23	-	34,184	-	-	-	-	34,207
Equity settled share-based payment transactions	-	-	-	-	2,564	-	-	2,564
Balance at 31 December 2021	181	(95,760)	149,448	13,603	7,940	231	(2,325)	73,318

Consolidated Statement of Cash Flows

(All figures £'000)	31 December 2021	31 December 2020
Cash flows from operating activities
Loss for the period	(24,595)	(20,316)
Depreciation/amortisation charges	2,562	1,596
Equity settled share-based payment expenses	2,564	728
Fair value adjustment to derivatives	100	0
Finance expenses	463	173
Finance income	(31)	(195)
R&D expenditure credit	-	(2)
Taxation	(5,744)	(3,146)
Impairment of intangible assets	-	141
	(24,681)	(21,021)
(Increase)/decrease in inventories	(2,967)	767
Increase in trade and other receivables	(3,170)	(394)
Increase in trade and other payables	1,875	1,686
	(28,943)	(18,962)
Interest paid	(463)	(173)
Tax paid	-	153
Tax received	3,395	2,702
Net cash used in operating activities	(26,011)	(16,280)
Cash flows from investing activities
Purchase of intangible fixed assets	(146)	(91)
Purchase of tangible fixed assets	(5,976)	(485)
Acquisition of subsidiary net of cash acquired	(1,752)	(20,586)
Interest received	31	195
Net cash used in investing activities	(7,843)	(20,967)
Cash flows from financing activities
Capital repaid in respect of loans	(1,844)	(497)
Proceeds of new loan	144	2,055
Capital repaid in respect of lease liabilities	(515)	(391)
Share issue	34,208	159
Net cash generated from financing activities	31,993	1,326
(Decrease) in cash and cash equivalents	(1,861)	(35,921)
Effect of exchange rates in cash held	303	(35)
Cash and cash equivalents at beginning of the year	45,092	81,048
Cash and cash equivalents at end of the year	43,534	45,092

Notes to the financial statements

1. Financial information set out in this announcement 

The financial information set out above does not constitute the Company's statutory accounts for the period ended 31 December 2021 or 31 December 2020 but is derived from those accounts. Statutory accounts for the period ended 31 December 2020 have been delivered to the registrar of companies, and those for the period ended 31 December 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

2. Revenue and other operating income

The revenue split between the Group was as follows:

					12 months to	12 months to
(All figures £'000)					31 December 2021	31 December 2020
Albyn subsidiaries					24,823	9,397
Creo Medical Limited subsidiaries					338	32
Total					25,161	9,429

Segmental reporting

Operating segments are identified on the basis of internal reporting and decision making. Creo currently has one operating segment which is the research, development and distribution of electrosurgical medical devices relating to the field of surgical endoscopy.

The Group has started the process of integrating the previous Albyn and Boucart brands into the Creo brand and offering customers our full suite of products. As such the Group is still operating in a single segment. As the Group continues to grow we expect the internal reporting structure to change to meet the changing goals and objectives of the business and additional operating segments may be identified in future reporting periods.

As there is only one reportable operating segment whole profit, expenses, assets, liabilities and cashflows are measured and reported on a basis consistent with the financial statements, with no additional disclosures necessary.

Other operating income

Other operating income relates to research grants. Income is recognised as necessary to match it with the related costs in the profit or loss on a systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate. Furthermore, income is recognised only when there is reasonable assurance that the Company will comply with any conditions attached to the grant and the grant will be received. Grant income received during the year was £0.05m (2020: £0.05m).

3. Loss before tax

The loss before income tax is stated after charging/(crediting):

		12 months to	12 months to
(All figures £'000)		31 December 2021	31 December 2020
Depreciation - owned assets		782	582
Depreciation - assets on hire purchase contracts		-	36
Depreciation - right of use assets		651	321
Amortisation		1,129	658
Impairment of Intangible Assets		-	141
Research and development expenditure		12,869	10,193

4. Loss per share

Loss per share has been calculated in accordance with IAS 33 - Earnings Per Share using the loss for the period after tax, divided by the weighted average number of shares in issue.

				12 months to	12 months to
(All figures £)				31 December 2021	31 December 2020
Loss
Loss attributable to equity holders of Company (basic)				(24,594,919)	(20,315,725)
Shares (number)
Weighted average number of ordinary shares in issue during the period				164,433,455	155,797,600
Loss per share
Basic and diluted				(0.15)	(0.13)

5. Share Capital

		31 December	31 December
(All figures £'000)		2021	2020
Balance at start of period		158	150
Issue of share capital
Number of shares		23,208,005	7,512,423
Price per share (£)		0.001	0.001
Share value (£'000)		23	8
Balance at 31 December		181	158

6. Subsequent events

Heads of Terms signed

The Company has entered into non-binding heads of terms with a number of parties which relate to the licensing of the Company's SpydrBlade, Cool Plasma and MicroBlate technologies. As outlined previously, Creo is developing its business through a three tiered Build, Buy and Partner strategy. Having already demonstrated execution on the Build and Buy elements, the Partner strategy aims to create shareholder value through granting third-party access to Creo's advanced energy technology in markets adjacent to those where the Company is already operating. This includes fields such as laparoscopic surgery, robotically assisted surgery, and non-thermal plasma sterilisation.

 

END

 

 

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