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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Creo Medical Group Plc | LSE:CREO | London | Ordinary Share | GB00BZ1BLL44 | ORD GBP0.001 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 36.25 | 36.00 | 36.50 | 36.25 | 36.25 | 36.25 | 299,147 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Surgical,med Instr,apparatus | 27.17M | -26.94M | -0.0746 | -4.86 | 130.95M |
TIDMCREO
RNS Number : 2159V
Creo Medical Group PLC
05 April 2019
Creo Medical Group plc
("Creo" or the "Company")
Full results for the 18 months ended 31 December 2018
Creo Medical Group plc (AIM: CREO), a medical device company focused on the emerging field of surgical endoscopy, announces its audited results for the 18 months ended 31 December 2018, in line with management expectations.
The previous 18 months reflect a period of considerable progress in the development and path to commercial launch for the Company's CROMA Advanced Energy platform and Speedboat device for use in Gastrointestinal ("GI") therapeutic endoscopy, the first in a suite of products being developed for the CROMA platform.
Operational Highlights, including post period end
-- Number of procedures increased substantially during the period including first cases in the United States
-- Number of physicians trained increased to more than sixty, with strong pipeline of further trainees
-- Clinical Education Programme is now clearly defined and repeatable, enabling physicians to be trained in the use of the Speedboat device
-- FDA clearance received for the Speedboat device and the CROMA platform and regulatory approval for additional products is on track
-- Patients treated in multiple countries, including the United States, UK, South Africa and Spain, using Speedboat in both upper and lower GI procedures
-- New framework distribution agreements entered into, covering a number of European markets along with the UK and South Africa to complement existing distribution agreement with PENTAX Medical for the Asia-Pacific region
-- Strengthened balance sheet following the successful raise of an additional GBP48.5m (before expenses) through a significantly oversubscribed share placing
Financial Highlights (for 18 months ended 31 December 2018)
-- Cash and cash equivalents of GBP44.6m at 31 December 2018 (30 June 2017: GBP13.7m)
-- Operating loss of GBP17.7m (12 months to 30 June 2017: GBP8.9m) including GBP1.8m share based payments, in line with management expectations
-- Underlying operating loss of GBP12.6m (12 months to 30 June 2017: GBP5.6m) -- Net cash outflow from operating activities of GBP14.3m (12 months to 30 June 2017: GBP6.9m) -- Net assets of GBP47.7m (30 June 2017: GBP14.7m)
Craig Gulliford, Chief Executive Officer, commented:
"We continue to deliver against our strategic objectives:; developing a widening suite of innovative medical devices, expanding the list of physicians participating in the Creo Clinical Education Programme as part of our training led commercialisation plan, and evolving our distribution network and manufacturing capacity in anticipation of commercial launch. We have established a solid platform for future growth and we look forward with confidence to another year exciting year in 2019."
Creo Medical Group plc Richard Rees (CFO) +44 (0)129 160 6005 Cenkos Securities +44 (0)20 7397 8900 Stephen Keys / Mark Connelly (NOMAD) Michael Johnson / Russell Kerr (Sales) Walbrook PR Ltd Tel: +44 (0)20 7933 8780 or creo@walbrookpr.com Paul McManus Mob: +44 (0)7980 541 893 Helen Cresswell Mob: +44 (0)7841 917 679
About Creo Medical
Creo Medical, founded in 2003, is a medical device company focused on the development and commercialisation of minimally invasive surgical devices, by bringing advanced energy to endoscopy. The Company's mission is to improve patient outcomes by applying microwave and RF energy to surgical endoscopy. Creo has developed CROMA, an electrosurgical advanced energy platform that combines bipolar radiofrequency for precise localised cutting and microwave for controlled coagulation. This technology provides clinicians with flexible, accurate and controlled surgical solutions.
The Company's strategy is to bring its CROMA platform to market through a suite of medical devices which the Company has designed, initially for the emerging field of GI therapeutic endoscopy, an area with high unmet needs. The CROMA platform will be developed further for bronchoscopy and laparoscopy procedures. The Company believes its technology can impact the landscape of surgery and endoscopy by providing a safer, less-invasive and more cost-efficient option of treatment.
For more information about Creo Medical please see our website, investors.creomedical.com
Chairman's Statement
Overview
The 18 months ended 31 December 2018 have been a remarkable period for Creo. Our Speedboat device has been used with our CROMA Advanced Energy platform to remove lesions from the gastrointestinal tracts of multiple patients with no reported complications. Typically, instead of having to undergo surgery under general anaesthetic, these patients needed only mild sedation and were treated as day patients.
Clinicians from around the world are now interested in using our surgical solutions. We have put in place framework distribution agreements with recognised leaders in endoscopic devices in countries spanning the EU, Asia-Pacific and South Africa. By rolling out the Creo Clinical Education Programme, our partners will be leveraging their resources and strong relationships to encourage adoption of our platform.
Strengthened balance sheet
In August 2018, we completed an issue of new shares at 125 pence per share to raise GBP48.5 million before expenses. The placing, which was significantly oversubscribed, followed our IPO on AIM in December 2016 which raised GBP20 million before expenses at 76 pence per share. It has substantially strengthened Creo's balance sheet and given us the confidence to continue to accelerate physician training and the commercial rollout of our products internationally over the next few years.
The subscribers to the placing include leading institutional and specialist investors that complement our existing shareholder base. We welcome these new joiners to the register and thank all our shareholders for their continuing support for our strategic vision.
Our people and culture
During the period we continued to recruit talented and experienced individuals across all business functions to bolster Creo's expertise and capacity for growth. We now employ more than 50 people, who work in a creative, innovative and driven environment, with a shared goal of improving clinical outcomes and changing patients' lives.
As we move into the next stage of our strategic development, our management team and staff now have a clearly-defined three-pronged strategy. Our R&D team are focusing on turning projects into products by developing our growing proprietary intellectual property into a widening range of medical devices. Our commercial colleagues are driving clinical adoption by supporting recent trainees as they transition into confident and frequent users of our products. Finally, all the relevant departments and suppliers are supporting the evolution of our current small-scale production into a manufacturing capability appropriate for our growing product range and rising demand from multiple markets.
As the business grows, we are putting in place clear goals, targets, and appropriate incentives to continue this evolution from earlier stage innovator into a fully functioning global medtech company.
Board and governance
At the IPO we set up Board and governance structures suitable for a fast-growing, AIM-quoted company. Our three Executive Directors are supported by three experienced Non-Executive Directors with a breadth of experience in the medical technology sector, finance and governance.
Given Creo's growth over the last 18 months and the future prospects of the business, the Board continues to review its structure, governance and procedures to ensure that the business is well placed to take advantage of the opportunities that lie ahead.
Outlook
With physicians being successfully trained on the CROMA Advanced Energy platform and Speedboat device, a substantially strengthened balance sheet, a clear strategy and a skilled and motivated management team and staff, Creo has a solid platform for growth and the Board looks forward with confidence to exciting opportunities for the Company in 2019 and beyond.
The Board would like to thank the Creo team, along with our physicians and their patients, our customers, suppliers, shareholders, and other partners for all their hard work, positive contributions, and support during the period.
Charles Spicer
Chairman
Chief Executive's Review
I am delighted to report on 18 months of exceptional progress, which saw significant advances across the business. We set ourselves ambitious challenges and have worked hard to put in place the structures, approvals and partnerships we need to commercialise our ground-breaking CROMA Advanced Energy platform, the Speedboat device and make great strides towards the launch of the next devices on our roadmap.
Advancing applications for regulatory approval
Our three year plan at IPO was simple: in year one we aimed to deliver initial regulatory clearance for the first product; in year two our aim was to deliver initial clinical results; and in year three our aim was to initiate the commercial launch of a suite of devices powered by our CROMA Advanced Energy platform.
During the reporting period we have built on our first year of progress. We were delighted to achieve regulatory clearance for our CROMA Advanced Energy platform and Speedboat device at the start of the reporting period; a core objective for 2018.
We are also very pleased with the progress of our immediate product roadmap, with significant development progress allowing Creo to achieve design freeze in its initial suite of devices. These devices are the range we intend to initially launch in the gastro-intestinal field, covering haemostasis, resection and ablation of soft tissue for therapeutic endoscopists. With the input from Creo's Horizon Group of Key Opinion Leaders (Creo's Horizon Group consists of a group of key physicians from around the world who serve the important advisory function of assisting Creo to identify and assess unmet market opportunities in gastrointestinal endoscopy that could contribute to the improvement of patient outcomes), the original concept devices have developed into device designs which we expect to have improved performance over that anticipated at the beginning of the programme.
Growing base of users and clinical data
Possibly the most rewarding aspect has been the first cohort of human patients, with the first patient treated as part of Creo's Clinical Education Programme outside our academic development centre being a cancer patient, treated under sedation. Being a cancer, we almost certainly helped save this patient's life.
Equally significant is the continuation of our Clinical Education Programme which has seen us train and subsequently enable physicians in multiple markets carry out their first cases using Speedboat, all without any reported adverse events. This has been enabled through a thorough programme of development which has now become a repeatable and predictable Clinical Education Programme. Creo's Clinical Education Programme has trained over 60 physicians and has a healthy backlog of trainees for Creo to focus on with distribution partners as these physicians become the trainers of the future for our distribution partners.
Our Clinical Education Programme has culminated in the delivery of three live cases over three sites in Europe, with over 40 visiting doctors watching the cases live. We are excited by the prospect of building on this with increasing publication material over the coming years as we transition into a fully-fledged commercial business.
Market-leading distribution partners
One principal objective for the team during the reporting period was to hone Creo's business development. In parallel with our work to establish and characterise the Clinical Education Programme, we have accelerated the establishment of a scalable route to market by entering into framework distribution agreements with leading distributors to work with Creo as they develop clinical training and commence market seeding in multiple territories in Europe and in South Africa. By working with leading distributors of endoscopy and GI devices, we can leverage their existing infrastructure and relationships to drive adoption of our solutions.
Having initially entered an agreement with HOYA Group, PENTAX Medical in 2016 for the distribution of products, we have now agreed the initial phase of this regional distribution across the Asia-Pacific territory in which PENTAX Medical will establish Creo's Clinical Education Programme and subsequently seed the market. The agreement also includes a commitment to roll out to other territories in the region. It is gratifying that our distribution partners see such potential in our products and are prepared to invest significant resource and effort to seed their respective markets.
Market dynamics
Although there are on-going advances in screening techniques to identify tumours, many that are identified currently cannot be treated without subsequent surgical intervention - if at all. This presents a significant opportunity for endoscopic surgery. The economic benefits and reduced risks to patients provide further compelling reasons for adopting minimally invasive surgical procedures.
Generally, the indications for which our devices are intended to treat are all seeing signs of increased volumes of screening or the beginnings of screening programmes where they have generally not been possible before. The UK is set to lower the screening age for bowel cancer from 60 to 50, as is already practised in the US. The American Cancer Society recently called for colorectal cancer screening to begin at age 45, not 50, in response to a greater incidence among a younger demographic. In contrast, rates of colorectal cancer have declined among people aged over 54 over the past 20 years, since the introduction of population based colorectal screening programmes for the over 55s.
Areas of application for our ablation products, in particular lung cancer, are seeing the initial introduction of screening where it has not been possible before. This is principally down to improvements in diagnostic capability which, as with colorectal cancer, is diagnosing disease at an earlier (and smaller) stage in its progression requiring minimally invasive ablation solutions, ideally suited to the CROMA Advanced Energy platform.
Successful fundraise
Building Creo into a major medical device business with multiple devices targeting indications in multiple areas of therapy, all powered by a common platform, clearly requires capital. We always anticipated a fundraising exercise during the course of this period and gaining access to the capital required was one of the attractions of the public market and the IPO. It was great to receive the level of interest and support from both existing and new investors when we approached the market in 2018 for the next phase in our capital raising program. Through an oversubscribed share placing we raised a gross amount of GBP48.5 million, which allows us to build the business and potentially expand our horizons as we consider how we develop the team, our distribution network and product portfolio.
A talented team and can-do culture
As the business evolves we have continued to build and develop our team, recruiting key people across engineering, manufacturing and sales to ensure we have the structure in place to grow. As a listed group operating in health care, clearly there is a need to comply with regulatory requirements. While we of course do all that we need to do in that regard, we make great efforts not to impinge on our culture of creativity and openness.
With over 50 employees we are still small in terms of headcount. We are proud of our 'can-do' mentality and sense of togetherness fostered in our weekly all hands meeting and innovation meetings that invite contributions from team members of all functions and levels of experience.
In anticipation of the full commercial launch of Creo's first products later this year, the Company has re-structured its operations to enable the business to scale and transition to become a fully integrated specialty medical devices manufacturer. To this end we appointed Gareth Walsh as Commercial Director in March 2019. Gareth was previously at Olympus Medical UKIE for over 12 years, serving as a Board Director for Olympus' UK & Ireland Medical and Surgical Business for two and a half years. In addition, we have appointed a new Head of Operations and a new Head of Manufacturing with Steve Morris, previously Chief Operations Officer, stepping down from his senior management team role to pursue other business interests. On behalf of the Board I would like to thank Steve for his contribution through the early development of Creo and wish him every success with his future ventures.
In terms of operating responsibly, we are mindful of everything we do. Earlier this year we formalised our values, centred around making a life changing difference, being sustainable and profitable, creating a positive and innovative working environment and being an employer of choice. Our business is built upon solutions that can change patients' lives for the better. Having worked so hard on the initial regulatory clearance with Speedboat, it is hugely satisfying for the whole team, new and old, to know that we have already made a huge impact on patients' lives. That is a great reason to come to work in the mornings, and to target our resources (and those of our partners) as efficiently as we can to bring our solutions to market in a timely and effective manner.
Promising outlook
We don't underestimate the challenge of changing the structures required to roll out our system, nor of gaining regulatory clearance for the other devices in the pipeline. However, the reaction of clinicians to seeing the product being used speak for themselves. Similarly, our distribution partners are keen to grow Creo's Clinical Education Programme in multiple territories and seed their respective markets in advance of full commercialisation. These factors, along with our strengthened internal team and the response to our recent round of fundraising, give us confidence that the next year and beyond will see Creo making a life-changing difference to patients around the world.
As we gear up for the year ahead and the longer term, we remain humble and focussed on core principles of execution and are mindful that execution with diligence and care is of primary importance. Our long-term success will be determined by our principal focus in the year ahead which centres around transforming our trainees into power users (the trainers of the future), transforming our in-house production into manufacturing with scale and to continue to convert our development projects into great products to change further lives.
As a team we are well set to deliver on this exciting challenge.
Craig Gulliford
Chief Executive Officer
Financial Review
Revenue and other income
During the 18-month period we have commenced shipments of our CROMA Advanced Energy platform and Speedboat devices pursuant to the framework agreements entered into with our distribution partners. These early shipments represent a net cost to Creo as we are providing products on a free or discounted basis with the objective of initial market seeding and penetration.
Other operating income of GBP0.3m in the 18-month period to 31 December 2018 (12 months to June 2017: GBP0.3m) relates to research grants.
Operating loss
The operating loss for the period increased to GBP17.7m (12 months to June 2017: GBP8.9m), reflecting the increased operating and expanded period expenses in relation to clinical and development activities together with further investment in headcount and business infrastructure to support the business and enable it to continue to develop and commercialise its technology. This continued investment in the business will support its anticipated growth and development in the coming periods.
The underlying operating loss (or adjusted EBITDA) for the period was GBP12.6m (12 months to June 2017: GBP5.6m).
Whilst EBITDA is not a statutory measure the Board believe it is helpful to investors to include 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 future development and begins to commercialise its approved products. The Adjusted EBITDA position excludes share based payment expenses, depreciation and amortisation 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 18 months to to 31 December (All figures GBP) 2018 30 June 2017 ------------------------------------------- ------------- ------------- Operating Loss (17,663,786) (8,903,066) Share-based payments 1,804,820 776,782 Depreciation and amortisation 497,421 142,423 R&D expenditure recovered via tax credit scheme 2,786,181 1,160,000 Expenses of the initial public offering - one-off - 1,252,692 Underlying operating loss (12,575,364) (5,571,169) ------------------------------------------- ------------- -------------
Expenses arising from share issue
Following a share placing of 38,800,000 ordinary shares which raised GBP48.5m before expenses in August 2018 the expensed costs incurred in the period were GBPnil (12 months to June 2017: GBP1.3m), with capitalised costs in the period of GBP2.6m (12 months to June 2017: GBP1.5m).
Tax
The tax credits recognised in the current and previous fiscal year relate solely to R&D tax credit claims. A deferred tax asset has yet to be 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 GBP17.9m (12 months to June 2017: GBP9.2m). Adjusting for costs and tax income above, underlying administrative expenses are GBP12.9m (12 months to June 2017: GBP5.8m).
This annualised increase of GBP2.8m reflects 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
Loss per share was 16 pence (12 months to June 2017: 13 pence).
Dividend
No dividend has been proposed for the period to 31 December 2018 (12 months to June 2017: GBPnil).
Cash flow and Balance Sheet
Net cash used in operating activities was GBP14.3m (12 months to June 2017: GBP6.9m), driven by the planned increase in investment in research and development during the period and the move from small discrete production batches into production manufacturing. Net cash generated from share issue was GBP46.1m (12 months to June 2017: GBP20.0m) further strengthening the balance sheet and providing the platform for long term product development, new product introduction and commercialisation.
Total assets increased to GBP49.7m (30 June 2017: GBP16.1m), a 209% increase, reflecting the increase in cash arising from the issue of new ordinary shares, offset by the operating cash outflow for the period. Cash and cash equivalents at 31 December 2018 were GBP44.6m (30 June 2017: GBP13.7m). Net assets were GBP47.7m (30 June 2017: GBP14.7m), a 224% increase.
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 2018 Report and Accounts.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out in the 2018 Report and Accounts.
Directors
Details of the Directors who served during the period ended 31 December 2018 are set out in the 2018 Report and Accounts. All six of the Directors serving on the Board at the year-end were male.
Conflicts of interest
To address the provisions of Section 175 of the Companies Act 2006 relating to conflicts of interest, the Company's Articles of Association allow the Board to authorise situations in which a Director has, or may have, a conflict of interest. Directors are required to give notice of any potential situation or transactional conflict that are to be considered at the next Board meeting and, if considered appropriate, conflicts are authorised. Directors are not permitted to participate in such considerations or to vote regarding their own conflicts.
"I am pleased to announce our second report and accounts following our initial listing on AIM in December 2016. The GBP48.5m raised in the summer of 2018 was another turning point in the progression of Creo. These funds have provided Creo with the long-term platform to enable us to further develop multiple products through to commercialisation and provide the Company with the platform for future development"
Richard Rees
Chief Financial Officer
Consolidated Statement of Profit and Loss and Other Comprehensive Income
18 months to 12 months to 31 December (All figures GBP) Note 2018 30 June 2017 ------------------------------ ----- ------------- ------------- Revenue 2 - - Cost of sales - - Gross Loss - - Other operating income 279,959 277,687 Administrative expenses (17,943,745) (9,180,753) Operating loss (17,663,786) (8,903,066) Finance expenses (16,744) (10,721) Finance income 104,343 5,337 Loss before tax 3 (17,576,187) (8,908,450) Taxation 2,767,579 1,142,933 Loss for the period/year (14,808,608) (7,765,517) ------------------------------ ----- ------------- ------------- Other comprehensive income - - Total comprehensive loss for the period/year (14,808,608) (7,765,517) ------------------------------ ----- ------------- ------------- Earnings per Share Basic and diluted 4 (0.16) (0.13)
Consolidated Statement of Financial Position
31 December 30 June (All figures GBP) 2018 2017 ------------------------------- ------------- ------------- Assets Non-current assets Intangible assets 307,814 10,896 Property, plant and equipment 906,256 325,019 Other financial assets 10,857 - Other non-current receivables 8,400 14,853 1,233,327 350,768 Current assets Inventories 302,472 91,333 Trade and other receivables 1,052,766 542,914 Tax receivable 2,569,631 1,449,976 Cash and cash equivalents 44,588,722 13,688,762 48,513,591 15,772,985 Total assets 49,746,918 16,123,753 -------------------------------- ------------- ------------- Shareholder equity Called up share capital 120,495 80,712 Share premium 65,835,555 19,810,393 Merger reserve 13,602,735 13,602,735 Share option reserve 3,093,070 1,288,250 Retained earnings (34,938,040) (20,129,432) 47,713,815 14,652,658 Liabilities Non-current liabilities Interest bearing liabilities 392,892 1,448 392,892 1,448 Current liabilities Trade and other payables 1,599,620 1,455,874 Interest bearing liabilities 40,591 13,773 1,640,211 1,469,647 Total liabilities 2,033,103 1,471,095 Total equity and liabilities 49,746,918 16,123,753 -------------------------------- ------------- -------------
Consolidated Statement of Changes in Equity
Called up Share share Retained Share Merger option Total (All figures GBP) capital earnings premium reserve reserve equity ------------------------------------ -------- ------------- ----------- ----------- ---------- ------------- Balance at 30 June 2016 1,436 (12,363,915) - 13,480,175 511,468 1,629,164 Total comprehensive income for the period Profit or loss - (7,765,517) - - - (7,765,517) Total comprehensive income - (7,765,517) - - - (7,765,517) Transactions with owners, recorded directly in equity Issue of share capital 19 - - 122,560 - 122,579 Bonus issue of share capital 50,950 - (50,950) - - - Issue of share capital 28,307 - 19,861,343 - - 19,889,650 Equity settled share-based payment transactions - - - - 776,782 776,782 Balance at 30 June 2017 80,712 (20,129,432) 19,810,393 13,602,735 1,288,250 14,652,658 ------------------------------------- -------- ------------- ----------- ----------- ---------- ------------- Total comprehensive income for the period Profit or loss - (14,808,608) - - - (14,808,608) Total comprehensive income - (14,808,608) - - - (14,808,608) Transactions with owners, recorded directly in equity Issue of share capital 39,783 - 46,025,162 - - 46,064,945 Equity settled share-based payment transactions - - - - 1,804,820 1,804,820 Balance at 31 December 2018 120,495 (34,938,040) 65,835,555 13,602,735 3,093,070 47,713,815 ------------------------------------- -------- ------------- ----------- ----------- ---------- -------------
Consolidated Statement of Cash Flows
18 months 12 months to 31 December to 30 June (All figures GBP) 2018 2017 ------------------------------------------ ---------------- ------------ Cash flows from operating activities Total comprehensive loss for the period (14,808,608) (7,765,517) Depreciation/amortisation charges 497,421 142,423 Increase in share option reserve 1,804,820 776,782 Fair value adjustment to derivatives (10,857) 7,402 Finance expenses 16,744 3,319 Finance income (93,486) (5,337) R&D expenditure credit (18,602) (17,067) Taxation (2,767,579) (1,142,933) Loss on disposal of property, plant and equipment 12,278 - (15,367,869) (8,000,928) Increase in inventories (211,139) (91,333) Increase in trade and other receivables (514,256) (65,564) Increase in trade and other payables 143,746 693,887 (15,949,518) (7,463,938) Interest paid (16,744) (3,319) Tax received 1,666,525 552,490 Net cash from operating activities (14,299,737) (6,914,767) Cash flows from investing activities Purchase of intangible fixed assets (304,462) (1,264) Purchase of tangible fixed assets (1,083,391) (224,450) Interest received 104,343 5,337 Net cash from investing activities (1,283,510) (220,377) Cash flows from financing activities Capital received in respect of finance lease liabilities 121,595 - Capital repaid in respect of finance lease liabilities (45,333) (11,606) Capital received in respect of long-term borrowings 342,000 - Share issue 5 46,064,945 20,012,229 Net cash from financing activities 46,483,207 20,000,623 Increase in cash and cash equivalents 30,899,960 12,865,479 Cash and cash equivalents at beginning of period 13,688,762 823,283 Cash and cash equivalents at end of period 44,588,722 13,688,762 ------------------------------------------ ---------------- ------------
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 2018 or 30 June 2017 but is derived from those accounts. Statutory accounts for the period ended 30 June 2017 have been delivered to the registrar of companies, and those for the period ended 31 December 2018 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
Revenue from contracts with customers
IFRS 15 'Revenue from contracts with customers' establishes a comprehensive framework for determining whether, how much and when revenue is recognised. Revenue is recognised when a customer obtains control of the goods or services.
IFRS15 'Revenue from contracts with customers' deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.
The standard replaces IAS 18 'Revenue' and IAS 11 'Construction Contracts', and related interpretations and is effective for annual periods beginning on or after 1 January 2018. The Group has early adopted IFRS 15 as at 1 July 2018. As part of adopting IFRS 15 the company has not identified any contracts with customers within the scope of IFRS 15 and accordingly no revenue is recognised in the current or prior period.
Collaborative arrangements
The Group has entered into a number of collaboration agreements with distributors in the period in order to develop and penetrate geographical markets for Creo's initial products (Speedboat device and the CROMA Advanced Energy platform) and to establish a working relationship in readiness for Creo's suite of products.
The agreements represent the transfer of goods to the distributor for consideration and the receipt of services to Creo in the form of marketing, promotion and setting up training and qualifying centres.
The distributor is not deemed to be a 'customer' of the entity as defined in IFRS 15. Instead they are a collaborator or partner that shares in the risks and benefits of developing a product to be marketed and as such no revenue is recognised in respect of these agreements.
The overall arrangement represents a net cost to Creo on the basis that it is providing products on a free or discounted basis and providing training and other support to the distributor in return for services relating to the objective of market penetration.
The overall net cost of each agreement is determined at inception and spread over the period of the agreement. The assumptions upon which the estimates are made are periodically updated. Any impact on profit or loss is recognised in the period in which the updates are made.
Other operating income
Other operating income relates to research grants. Income is recognised 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.
Segmental reporting
Operating segments are identified on the basis of internal reporting and decision making. The board regularly reviews the Company's performance and balance sheet position for its operations and receives financial information for the Company. As a result, the Company has one reportable segment, which is being the research and development of electrosurgical medical devices relating to the field of surgical endoscopy. As there is only one reportable segment whole profit, expenses, assets, liabilities and cash flows are measured and reported on a basis consistent with the financial statements, no additional disclosures are necessary.
3. Loss before tax
The loss before income tax is stated after charging/(crediting):
18 months 12 months to 31 December to 30 June (All figures GBP) 2018 2017 ---------------------------------------- ---------------- ------------ Depreciation - owned assets 471,745 127,090 Depreciation - assets on hire purchase contracts 18,132 12,088 Amortisation 7,544 3,245 Loss on disposal of property, plant and equipment 12,278 - Operating leases - land and buildings 249,602 129,859 Operating leases - other 83,538 51,340 Research and development expenditure 7,846,144 3,583,041 Foreign exchange differences 18,411 12,734
4. Earnings per share
Earnings 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.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. The potential ordinary shares are considered to be antidilutive on the basis that they reduce the loss per share and as such are not included in the Company's EPS calculation, meaning that diluted EPS is the same as basic EPS. Adjusted EPS is calculated as follows:
18 months 12 months to 31 December to 30 June (All figures GBP) 2018 2017 --------------------------------------------------------- ---------------- ------------ (Loss) (Loss) attributable to equity holders of Company (basic) (14,808,608) (7,765,517) Expenses of the initial public offering (non-recurring) - 1,252,692 Adjusted operating loss (14,808,608) (6,512,825) Shares (number) Weighted average number of ordinary shares in issue during the period 90,390,078 60,017,322 Earnings per share adjusted Basic & diluted (0.16) (0.11) --------------------------------------------------------- ---------------- ------------
5. Cash from share issue
18 months to 12 months 31 December to 30 June (All figures GBP) 2018 2017 ---------------------------------------------------- ------------ ------------ Share issue: Share options exercised 155,529 122,579 Advanced share subscription AIM listing 9 December 2016 - 1,400,000 Share subscription AIM listing 9 December 2016 - 20,000,008 Transaction costs AIM listing 9 December 2016 - (1,510,358) Share placing AIM 30 August 2018 48,500,000 - Transaction costs AIM 30 August 2018 (2,590,584) - 46,064,945 20,012,229 ---------------------------------------------------- ------------ ------------
6. Subsequent events
On the 16(th) January 2019, the Company announced that its Speedboat device powered its CROMA advanced energy platform had been successfully used by 2 US gastrointestinal surgeons to treat patients.
The Group signed a framework agreement on 7(th) February 2019 with PENTAX Europe GmbH (a member of HOYA Group) in respect of the initial market seeding and establishing a clinical education programme in each of Germany, France and Italy.
Creo Medical (Ireland) Ltd was incorporated in Ireland on 21(st) March 2019 and is a wholly owned subsidiary of Creo Medical Limited.
There have been no other material events subsequent to the period end and up to the 4(th) April 2019, the date of approval of the financial statements by the Board.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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FR USVKRKOASRAR
(END) Dow Jones Newswires
April 05, 2019 02:00 ET (06:00 GMT)
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