Creo Medical Group plc

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

FY24 Final Results

Strong Core Technology revenue growth and continued cost management

Significantly improved balance sheet

Creo Medical Group plc (AIM: CREO), the medical device company focused on the emerging field of minimally invasive surgical endoscopy for pre-cancer and cancer patients, announces its audited final results for the 12 months ended 31 December 2024 ("FY24"), which are in-line with market expectations.

Note: following the agreement to sell a 51% stake in Creo Medical Europe ("CME") announced in September 2024 and the decision to sell Aber Electronics ("Aber") in December 2024, CME and Aber were classified as assets held for sale assets and are reported as discontinued operations in the FY24 results.

Strong Core Technology performance, continued cost management and a 74% increase in Core Technology revenues:

·    Total group revenues of £30.7m with £4.0m from continuing operations and £26.7m from discontinued operations, following the sale of Creo Medical Europe

·    Commercial roll out of Speedboat UltraSlim driving a strong orderbook and a 74% increase in Creo Core Technology sales vs FY23

·    Cost reductions of c.£5.0m (annualised basis) on continuing operations made during H2 FY24, with the full c.£5.0m benefit to be realised in FY25

·    £12m before expenses raised through a placing and open offer in October 2024

·    Strategic partnership with Micro-Tech (Nanjing) Co. Ltd and sale of 51% of Creo Medical Europe, realising approximately €30m net cash to strengthen balance sheet (post period) with a €36m investment asset held on the balance sheet, providing future balance sheet strength

·    Remaining 49% stake in Creo Medical Europe to provide cash inflows going forwards, via an ongoing share of profits

·    Board refresh with a new Chairman and additional NED to bring additional strength, industry expertise and experience to the team

·    Amendment to the collaboration agreement with Intuitive to accelerate controlled market release of MicroBlate Flex, increasing the number of sites able to undertake combined robotic diagnostic and ablation procedures

Financial summary

* Restated following the completion of the sale of 51% of the issued share capital of Creo Medical S.L.U. ("Creo Medical Europe")

** Total revenue from continuing operations for FY23 was £4m including £1.7m of non-recurring Kamaptive revenue

† Underlying operating loss is loss after adjusting for share-based payments, depreciation and amortisation, R&D tax credits, earnout and other one-off settlements.

Regulatory and operational highlights:

·    Significant progress made in the roll-out of Creo's Core Technology with over 5,000 procedures performed globally to date with Speedboat UltraSlim being used in over 3,000 resection procedures in its first year on the market

·    Multiple upper and lower GI procedures performed with Speedboat UltraSlim, further enhanced by the launch of Speedboat Notch post period end in April 2025

·    NHS Supply Chain case study published setting out significant cash and operational savings from the use of Speedboat for lower GI tract Speedboat Submucosal Dissection ("SSD") procedures

·    King's Award for Innovation received for Creo's Speedboat technology

·    World's first robotic-guided microwave ablation of lung tissue performed in the same sitting as a diagnostic procedure using MicroBlate Flex

·    Launch of SpydrBlade Flex following CE marking during the year

Current trading and outlook:

·    Creo continues to build on the momentum from the introduction of Speedboat UltraSlim. With the commercial launch of Speedboat Notch, Creo expects to see increasing utilisation of its CROMA platform and related devices which, in turn, we expect will positively support revenue generation

·    Positive start to 2025, with strong performance in Q1 driven by Speedboat UltraSlim and Speedboat Notch.

·    Reassuring interest from clinicians from the release of SpydrBlade Flex

·    Positive outlook for the year underpinned by the full-year effects of the cost savings implemented in FY24 and visibility of growth in revenues. The Company is targeting 40%-60% Core Technology revenue growth in FY25

Commenting on the results and outlook, Craig Gulliford, Chief Executive Officer, said:

"The transition from development to commercial profitability is the most challenging phase for any company. The consolidatory steps taken in 2024 and our renewed focus will only help us as we continue to drive towards our goals. We will continue to look for efficiencies and cost reductions where possible to maximise the use of the funds we have. We look forward to another year of strong growth in our Core Technology from both existing and new users, helping drive us towards our goals of self-sustaining cashflows and improving lives."

For further information please contact: 

About Creo Medical

Creo 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

Introduction

I am delighted to present my first statement as Chairman of Creo Medical Group plc. Before discussing the progress of Creo since coming onboard, I want to take a moment to thank our previous Chair, Charles Spicer who oversaw Creo's transition from a small MedTech start-up to a commercial operation during his eight-year tenure. This transition left Creo in a stronger position to achieve its mission of improving lives.

I did not hesitate to join the Board of Creo in July 2024. Having held a number of senior executive positions in the technology sector over the last three decades, the quality of Creo's technology and, more importantly, the opportunity to use that technology to improve lives, resonated with me personally.

But I knew then - and know now - that there is work to be done. We immediately set some key objectives when I joined the Board and conducted a top‑down/bottom‑up review of Creo's overall business plan and product development and release strategy. It was imperative to assess the business through an objective, practical set of lenses and generate a business plan that was executable, removing the uncertainty of the timing and size of any Kamaptive programmes and the timing/adoption of new products in the pipeline. This review served as a catalyst to ensure that the business was right-sized to match the revised business plan outlook.

On top of this major business plan review, our primary objectives were to continue to grow revenue from our Core Technology, complete the strategic transactions that were already underway, remove non-core activities, and to ensure that the Board was appropriately structured to match generally accepted industry/market practice. In this statement, I aim to illustrate our performance against these objectives, acknowledging that our job is not yet done.

Overview

Creo Medical remains focused on driving a paradigm shift in surgery. Through the clinical and commercial adoption of our suite of electrosurgical endoscopic products, we aim to provide medical devices that deliver minimally invasive surgical treatments via endoscopic procedures.

In late 2023, Creo's Speedboat UltraSlim device was cleared for use. A key theme during 2024 was the successful use of this device worldwide to treat cancerous and precancerous lesions in the colon, oesophagus and stomach, as well as being used in oesophageal and gastric POEM procedures (to address swallowing disorders and gastroparesis). Sales continue to grow internationally.

In early 2024, Creo's MicroBlate Flex device was utilised by Professor Pallav Shah and Dr Christopher Orton, of the Royal Brompton Hospital, becoming the first specialists in the world to perform a robotic guided microwave ablation of lung tissue in the same sitting as a diagnostic procedure. In collaboration with Intuitive, we were pleased to announce in July that the number of sites in the UK and Europe which are able to offer such services would be expanded. This is part of an accelerated controlled market release of MicroBlate Flex to support the collection of post-market clinical evidence. We expect each site to become revenue generating once the initial cases are completed.

In the business plan review, we sought to focus the team on developing and delivering a broader suite of advanced energy products in the right timeframe with the highest potential of returns. The execution to this plan has been superb, with the executive team aligned and engaged with the plan.

The Company was already working on the strategic sale of 51% of Creo Medical Europe when I joined. This transaction heralds a new era for Creo. It is obvious to state that the transaction strengthens Creo's balance sheet. However, there are potential opportunities that will come to pass over the next few years. By forming a joint venture with Micro-Tech, a strong international MedTech company, the transaction represents a strategic partnership with a number of opportunities to collaborate. These include broader access to the APAC region, the potential for product co-development, and even for a lower cost manufacturing relationship. We look forward to working closely with Micro-Tech to continue to build on the successes of Creo Medical Europe.

In October, we successfully raised additional financing for the Group against a backdrop of significant global economic and political uncertainty. The raise, together with the proceeds from the sale of Creo Medical Europe, gives a strong balance sheet that allows us to focus on our core objectives in a careful and prudent manner. I thank all shareholders for their continued support.

During the year, Creo continued to build on its sales growth and pipeline. Along with the ongoing product releases, Creo achieved a 74% increase in Core Technology revenues, with £2.4m of sales in H2 24, representing 50% growth half-on-half.

In early 2025, we announced the UK & EU launch of our SpydrBlade Flex device, a unique multi-modal endoscopic device designed for precision and adaptability in endoscopic procedures. We will continue to roll this product out further during 2025, and look forward to sharing clinical and commercial updates in due course.

As committed, actions to reduce costs in the second half of the year resulted in a decrease in operating costs of approximately £5.0m with the full benefit of this to come through in FY25. 

These operational changes underpin our platform to drive towards our goals of increasing revenue and achieving self-sustaining cashflows. The Board has undertaken a rigorous review of its going concern position, and the steps that have been taken to date together with downside scenario modelling support the going concern assumptions and conclusions made.

This all being said, there remain continued global and local geopolitical and economic challenges to which we are not immune - global markets remain uncertain. This volatility is exacerbated in the smaller cap stock markets. We remain diligent and flexible to be able to respond to these challenges and are steadfast in our mission.

Management and Employees

Creo invests in talented and experienced individuals across the full range of business functions needed for success. Our headcount peaked during the second half of 2022, from the intensity of our R&D investment since IPO. The business has been gradually reducing its headcount wherever possible by taking advantage of natural attrition. However, we made an active decision during Q4 of 2024 to reevaluate the needs of the Group as it emerged from this intensive R&D and regulatory clearance stage of growth but also in alignment with the revised business plan. 

Post the announcement of the sale of 51% of Creo Medical Europe and following the divestment of Aber Electronics, our headcount has further reduced and the Group has been simplified significantly.

Through our Remuneration Committee, chaired by Ivonne Cantu, we have revised our remuneration policy to emphasise close alignment with the interests of our shareholders and other stakeholders and completely in alignment with the long-term vision of the Company. We made an active decision in 2024 to not issue LTIP awards due to the number of corporate transactions that were taking place within the business, as well as the significant performance misses versus plan in 2024. Going forward, these transactions have a fundamental impact on Group revenues and EBITDA but also redefine the future performance criteria of the business. As announced, a LTIP was granted in March 2025 with forward looking performance conditions that are appropriate for the newly defined Group. Please see the Remuneration Report in the 2024 Annual Report and Accounts for further details of Creo's remuneration practices.

The Board thanks all our employees for their hard work, commitment and patience during the year which, most critically, laid the foundations for the commercial roll out of Speedboat UltraSlim, the continued roll out of MicroBlate Flex and the commercial launch of SpydrBlade Flex and Speedboat Notch.

Governance and Board Make-Up

We have continued to build the Company's governance framework during the year in alignment with the QCA Code of Conduct through the existing committees, additional Board oversight, and regular discussion with shareholders and advisers.

Along with myself, Brent Boucher joined the Board of directors on 1 July 2024 as an additional Independent Non-Executive Director and a member of the Remuneration Committee. Brent is recognised as a business leader of multiple innovative growth businesses and has extensive experience in the commercialisation of novel medical devices. He brings to Creo an impressive record of success in growing and transforming businesses across a range of medical device specialities, including technologies, oncology interventions, surgical solutions and respiratory care. His in-depth knowledge of the MedTech space, coupled with his track record of success, brings area specific expertise and guidance to Creo's Board and team.

At the 2024 AGM we announced that John Bradshaw, Creo's Senior Independent Non-Executive Director and Audit Committee Chair had informed the Board of his intention to retire and step down from his role before the 2025 AGM. During John's nine-year tenure since IPO, John has helped guide and lead Creo with professionalism and pragmatism. John has been instrumental to maintaining stability during the last 12 months whilst the Company transitioned to its new leadership model. As we work to identify an appropriate candidate to replace John, Ivonne Cantu has agreed to act as interim Audit Committee chair. John has agreed to be available to support Ivonne during this interim role and to ensure that he can provide a handover to any future incoming Audit Committee chair. I thank John for his support and in welcoming Brent and myself to the team.

As part of the review to ensure Creo's Board is appropriately structured to match generally accepted practice, David Woods and Christopher Hancock have agreed to not stand for re-election at the 2025 AGM and to step down from their roles as plc Board directors. This will result in a non-executive majority on Creo's Board. David and Chris will continue in their day-to-day executive functions and will remain as advisors to the Board. In addition, both Chris and David will be senior contributors to Creo's operational Board tasked with putting into effect the decisions and guidance of the main Board.

I look forward into the remainder of 2025 and beyond with optimism. We are starting to see some of the benefits from the actions taken since joining the Board. With steadfast conviction, the roll out of additional products, and a laser focus on the continued transformation of the Company, I am convinced we will continue to deliver on our objectives, improve lives and generate shareholder returns.

Kevin T. Crofton

Non-Executive Chairman

18 May 2025

Chief Executive Review

Introduction

2024 was characterised by new product launches and foundations for growth across a broader product range, with the launch of Speedboat UltraSlim into the market, the initial launch of SpydrBlade Flex in the EU in the second half of the year and a robotic ablation world's first. These foundational product launches now delivering in clinical practice enable increased focus of resources on commercial growth and moving beyond the R&D phase of the business.

In late 2023 we launched Speedboat UltraSlim, our smallest resection device to date. The enthusiastic reception from existing and new users for this device, helped to drive revenue. With a team focused on the commercialisation of our Core Technology, Creo ended the year with record sales of £4.0m achieved from our Core Technology, representing 74% year-on-year growth.

Delivering the strategic agreement with Micro-Tech (NL) International B.V., a wholly owned subsidiary of Micro-Tech (Nanjing) Co. Ltd (SHA: 688029) ("Micro-Tech") for the sale of 51% of Creo's Spanish subsidiary, Creo Medical SLU ("Creo Medical Europe") during 2024 was significant. Micro-Tech was selected after considering a number of potential partners. The transaction closed in early 2025, delivering a significant non-dilutive cash injection, strengthening our balance sheet and providing new opportunities to collaborate with our new partner. The deal also:

·    Strengthens our ongoing strategy with Creo Medical Europe to secure long term continuity of supply of the product portfolio;

·    Broadens the Creo branded portfolio in Europe as well as our US, LATAM and APAC channels;

·    Offers an opportunity to improve pricing and margin within Creo Medical Europe;

·    Provides for potential access to the Chinese market; and

·    Offers strategic joint development and manufacturing opportunities.

This is an excellent deal for Creo and Micro-Tech. With Micro-Tech as a joint venture partner, we have the opportunity together to be a significant force within the industry enabling us to focus on our Core Technology business.

Our remaining 49% stake in Creo Medical Europe will bring cash inflows going forwards, via an ongoing share of profits, plus a €36m investment asset held on the balance sheet, providing future balance sheet strength.

Early in 2024 we were delighted to learn that the world's first robotic-guided microwave ablation of lung tissue had taken place in the same sitting as a diagnostic procedure with our MicroBlate Flex device being used in conjunction with ION by Intuitive.

A controlled market release of MicroBlate Flex also commenced during 2024. With cases now being performed in two sites in the UK and further European sites expected to come online soon, this valuable collection of post market clinical data aims to assist further adoption of the technology and future revenue generation for Creo. This is really exciting. By treating patients we are demonstrating safety and early efficacy. Working with such a huge industry partner who shares our values and approach to early market development is both rewarding as well as a validation of our approach with our broader product range.

Whilst our intensive R&D phase is, in the main, complete, we continue to hone and develop additional products to remain at the forefront of technology development in our field.

During 2024 we worked hard to bring our SpydrBlade Flex device to market. We also finalised a variation to Speedboat UltraSlim, called Speedboat Notch. This is an enhanced device adapted following user feedback, making it suitable for additional complex endoscopic procedures.

Our innovation doesn't go unrecognised. NHS Supply Chain published data in 2024 demonstrating significant cost and operational savings arising from the use of Speedboat. Creo's original vision was to utilise Microwave energy to treat cancer. To achieve this, as well as delivering cost and operational benefits to healthcare providers, drives home that we are succeeding in our mission to improve lives. In addition, it was with immense pride and gratitude that I was invited to attend Windsor Castle to receive the King's Award for Enterprise and Innovation from His Majesty King Charles. This award is a true accolade for the hard work and effort we have all contributed to Creo, with our technology treating patients around the world.

We continued to grow our user base and pipeline during 2024. Core Technology users grew from 175 at the end of 2023 to 214 at the end of 2024. With a focus on increasing utilisation and the introduction of additional products, this c.20% growth in users led to an increased utilisation of c.35%, supporting the 74% growth in Core Technology revenue. The introduction of additional products also helped our pipeline grow significantly, from c.650 potential users to c.850 potential users at the end of 2024. Moving forward, we will continue to focus on generating growth through increasing utilisation, supported by the launch of additional products.

As a Board, we sharpened our focus on commercialisation during 2024. Charles Spicer, who chaired the Company from IPO, stepped down at the end of June. Charles was succeeded by Kevin Crofton who hit the ground running, leading an in-depth review of our business plan and commercialisation strategy. Brent Boucher also joined the Board, bringing a wealth of MedTech industry and commercialisation expertise which is proving invaluable. At a personal level and on behalf of the Board, I thank Charles for his guidance and work to grow Creo from IPO to where he left it with multiple devices cleared in major markets with early commercial traction. I also welcome both Kevin and Brent to the Board and look forward to continuing to build on the great working relationship we have established so far.

Revenue and cost base

Group revenues in 2024 were £30.7m (FY23: £30.8m) (with £4.0m (FY23: £4.0m) from continuing operations and £26.7m (FY23: £26.8m) from discontinued operations following the sale of Creo Medical Europe) reflecting significant growth in our Core Technology and growth in Creo Medical Europe consumables offset by forex headwinds.

The launch of Speedboat UltraSlim in Q4-23 was a significant milestone, helping to drive record sales of Core Technology during 2024. Core Technology sales increased by 74% to £4.0m (FY23: £2.3m), with £2.4m of sales in H2-24 representing 50% growth half-on-half. Core Technology revenues include sales from all core products such as Speedboat UltraSlim and CROMA platform from both existing and new customer additions during the period and remains as continuing operations in the Group's FY24 results.

Creo Medical Europe consumables revenues were up 2.6% in constant currency during 2024, in line with management expectations. Reported revenues of £26.7m (FY23: £26.8m) are reflective of FOREX headwinds in the period. Creo Medical Europe consumable sales are held as discontinued activities in the Group's FY24 results.

With the onset of new leadership in the business, we undertook a top-down/bottom-up review of the business, with an increased emphasis on decreasing operating costs, in particular in R&D, engineering and operations. This review led to significant headcount reductions in 2024 where business need is now less resource intensive. Along with this, we manage an external development programme with partners which allows us to make significant cost savings alongside further simplification and efficiencies from the Creo Medical Europe deal. The net effect is an approximate £5m reduction in our annualised operating costs, the full benefits of which will be seen during 2025.

Continuing this traction throughout 2025, and seeing our other key projects come to fruition, positions us to achieve our goals of increasing revenues while maintaining appropriate cost management. We are actively looking at our manufacturing strategy, how we interact with our strategic partners and how we deliver long term shareholder value.

An example of how we are evolving our relationships with strategic partners is Aber Electronics Limited ("Aber"), a manufacturer, designer and supplier of power amplifiers and radio frequency products which Creo acquired in 2021. As part of the focus on streamlining the business now that the foundational work is complete, our need to de-risk supply has dramatically reduced. This has enabled discussions with Aber's management to reach the decision to sell the business back to management having completed the design and secured the supply of the key, innovative new Microwave component and intellectual property embedded in the CROMA generator. The transaction completed post period end in March 2025 and for the purposes of the FY24 accounts has been held as a discontinued operation. We thank the Aber team for their contribution to Creo and look forward to continuing our longstanding relationship.

Creo Medical Europe

The sale of a 51% stake in Creo Medical Europe to Micro-Tech was an excellent deal for both parties. For Creo, the transaction brought a significant, non-dilutive, cash injection and a large financial return on investment whilst preserving access to the sales channel acquired in 2020. Having acquired the business for €28m, the transaction valued Creo Medical Europe at an equity value of €72m, reflecting the growth achieved in the business since being acquired. With our remaining 49% ownership, we will continue to see an ongoing share of the profits with an expectation that the ongoing dividends will exceed those we had when we first acquired the company. This is an outstanding return for shareholders.

Since 2020, we have integrated and developed the Creo brand across the product range distributed through Creo Medical Europe. More than 80% of all product sales in 2024 came from the integrated branded product portfolio across high volume complementary GI products through to the high value advanced energy devices.

With Micro-Tech as a partner in Creo Medical Europe, the business gains long term product supply certainty across the range from a strategically important manufacturer. It also gains access to an increasing range of products to complement Creo's Core advanced energy products. Creo will have the global rights to sell any Creo Medical branded product distributed through the Creo Medical Europe channel in the USA, LATAM and APAC.

Funding

On the back of the Micro-Tech deal and against the backdrop of an uncertain macro environment towards the end of the year with budget statements and significant global elections, we took the decision to secure additional funds in October to mitigate the risk that the process to obtain clearances required for the sale of 51% of Creo Medical Europe could delay closing of the transaction beyond Q1-25. We are very grateful for the shareholder support received. The funding, alongside the completion of the Creo Medical Europe deal in February 2025, provides significant balance sheet strength providing the financial platform to continue to drive towards significant milestones during the year ahead and the next stage of Creo's development. We are committed to and focussed on the commercialisation of our Core Technologies, to generate self-sustaining cashflows.

Products

The launch of Speedboat UltraSlim in Q4 23, our smallest device to date, was a significant milestone. The device was enthusiastically received by existing and new users during 2024. As already noted, the launch of this device helped to drive record Core Technology sales during 2024 as well as generating a strong orderbook for the first quarter of 2025.

To date, Speedboat has been used in over 5,000 cases. This is just the start of the utilisation of this device. Talking about Speedboat UltraSlim, Dr Regi George, Gastroenterologist at The Royal Oldham Hospital, UK said "This is a safer technology and allows much deeper submucosal dissection. We are now moving on to use this as our preferred and only device for endoscopic dissection."

In 2025 we will be commercialising an additional version of Speedboat, Speedboat Notch. Taking on board user feedback, particularly in the upper GI space, we have enhanced the design of Speedboat UltraSlim to include additional features designed to support a wider range of reimbursed complex third-space endoscopic procedures, including E-, F-, and G-POEMs. Developed at pace through 2024, the Speedboat Notch was launched at ESGE Days in April 2025.

During the year the team has worked hard to commercially launch our SpydrBlade Flex device. SpydrBlade Flex delivers laparoscopic cut and coagulate functionality through an endoscopic device, which has previously been referred to by Dr Rob Hawes as "The harmonic scalpel at the end of a flexible scope." We are particularly excited about this product and the potential it offers to treat patients.

SpydrBlade Flex really is one of the most advanced surgical tools. Again, Creo has pioneered the introduction of this technology into the tiny footprint of a flexible endoscopic instrument. It was fitting that following extensive pre-launch global clinical activity in late 2024, the first customer for the device was St Mark's Hospital in NW London, one of the UK's leading Endoscopy Units and recognised as a world centre of excellence by the WEO (World Endoscopy Organisation). St Mark's Hospital is also an established and regular user of Creo's Speedboat UltraSlim.

We continue to review how to leverage the bipolar technology we have developed for use in additional products to complement our Core Technology and provide healthcare providers with the tools they need. We believe that there are a number of opportunities where we can develop products, either ourselves or in conjunction with third parties, increasing the number of devices available for use with CROMA to drive greater use of Creo's Advanced Energy. These bi-polar products would also complement the EndoTherapy products currently sold alongside our Core Technology products, positioning Creo with a full product offering for users and generating greater cross selling opportunities.

Notwithstanding the growth that we are seeing, we are still early in our commercialisation. Our flagship Speedboat product is clearly ahead of the other devices in our suite of products. However, we look forward to 2025 and beyond and are focused on ensuring that our other core advanced energy devices advance into full commercialisation with the same passion and focus as we have applied to Speedboat. 

Kamaptive

We signed the collaboration agreement with Intuitive in May 2021 with a vision to develop our MicroBlate Flex technology through two development phases. The ambition was to enter clinical practice within a couple of years. I was privileged to observe one of the first robotically guided therapeutic cases using MicroBlate Flex in December 2023 which we announced in early 2024. This fantastic milestone was followed by a series of further cases in conjunction with the Ion robot from Intuitive in early 2024. This use triggered an acceleration in our expected commercialisation programme. There is still a lot of work to do to complete our clinical studies, but the expansion beyond clinical studies towards commercial activity with customers is an exciting development.

In July 2024 we announced this change, marking a move to "post-market cases" with Ion and Intuitive, through a shared controlled market release programme. This change is now supporting the collection of post-market clinical data evidence across the UK and Europe as part of a controlled market release as part of the early commercialisation of MicroBlate Flex.

Two UK sites are already performing combined diagnosis and ablation procedures using MicroBlate Flex in conjunction with the Intuitive Ion Endoluminal System. We expect additional commercial sites to go live in the near future. Our expectation is that each site will become revenue generating once a small number of cases have been completed under the limited market release agreement. As such, whilst commercial activity through the market release continues at pace and is expected to create additional future revenue streams, no revenues associated with this collaboration were recorded in the period (FY23: £1.7m).

We continue to explore additional opportunities where our technology can be exploited with Kamaptive partners. In our annual report, Professor Chris Hancock, Creo's founder and CTO, explains how we have utilised our technology during the past 12 months to develop and demonstrate outstanding performance of prototype vessel sealers that could be used with a number of surgical robots.

Recognition

In April 2024, NHS Supply Chain published data collected from over 130 patient procedures undertaken at East Kent Hospitals University NHS Foundation Trust ("EKHUFT") as part of their bowel cancer and therapeutic endoscopy service. The data demonstrates significant cost and operational savings provided by the use of our Speedboat technology in Speedboat Submucosal Dissection ("SSD") procedures. The life changing patient outcomes and the ability to positively impact NHS waiting lists from these 130 patients aside, EKHUFT realised savings of £687k from these cases alone.

When compared against a similar analysis of surgical alternatives, the data shows:

·    87% reduction in the average length of stay from 8.39 days to 1.07 days;

·    99% reduction in critical care costs;

·    91% reduction in accommodation costs per patient from £3.4k to £0.3k;

·    62% reduction in admission costs from £8.2k to £3.1k;

·    Over a 1-year period, costs were reduced from £8.8k to £3.6k (59% reduction);

·    Net cash savings from just these 130 patient procedures of £687k realised for the NHS Trust.

In an already stretched NHS, savings and efficiencies at this level are desperately needed but hard to come by. Furthermore, the net cash savings referenced were calculated over a one-year period and relate only to the SSD procedure element. They do not include additional benefits and costs savings previously identified and reported by Creo utilising the lifetime horizon Markov model, which included downstream costs associated with recurrence of lesions and procedure-related complications commonly associated with surgical alternatives to SSD.

Receiving the King's Award for Enterprise in Innovation on behalf of Creo was a personal highlight of 2024. The King's Awards for Enterprise is the UK's most prestigious business awards which recognise and encourage achievements in the fields of Innovation, International Trade, Sustainable Development and Promoting Opportunity through social mobility. I am immensely grateful to have been able to receive this award on behalf of the Company, recognising the hard work and effort we have all put in to enable Speedboat and CROMA to change lives.

Current trading and outlook

Global uncertainty remains and will, no doubt, continue for some time. Together with an increased risk of unforeseen economic impact arising from the new US administration. This uncertainty is placing pressure on the MedTech industry and global markets generally. This is outside of our control. We continue to focus on that which we can control, and ensure that Creo is best positioned to respond with positive intention to any challenges that come our way.

There is a lot to be confident about for 2025. We continue to build on the momentum from the introduction of Speedboat UltraSlim and SpydrBlade Flex. With the commercial launch of Speedboat Notch, we expect to see increasing utilisation of our CROMA platform and related devices which, in turn, we expect will positively support revenue generation.

Creo has started 2025 positively, with strong performance in Q1 which has continued to be driven by Speedboat UltraSlim and Speedboat Notch. Interest from clinicians for SpydrBlade Flex is reassuring. The Company is targeting 40-60% Core Technology revenue growth in FY25, while benefitting from the full-year effects of the cost savings implemented in Q4-24 and Q1-25.

We will continue to develop our relationship with Kamaptive partners. We expect that more sites will come online for the use of MicroBlate Flex and, with that, the expectation that these will become revenue generative in due course. Having received our first paid purchase order for MicroBlate Flex in Q125, we know this prospect is real.

We will also continue to pursue other Kamaptive opportunities which will help utilise our IP and ensure future development continues through funded projects. This could be through the integration of SpydrBlade into robotic laparoscopic tools or from our Plasma technology.

We will look for all opportunities to collaborate with Micro-Tech, our partner in Creo Medical Europe. We are excited to see how that relationship can grow and how we can work together to continue the growth of Creo Medical Europe and, in turn, create more opportunities for the sale of our Core Technology in the markets that it serves.

Whilst not an easy task by any measure, the cost reduction exercise undertaken in 2024 will show benefit in 2025. With the completion of the sale of 51% of Creo Medical Europe and the sale of Aber in early 2025, the size of the Group is significantly reduced, providing administrative efficiencies which will also benefit the Group.

The transition from development to commercial profitability is the most challenging phase for any company. The consolidatory steps taken in 2024 and our renewed focus will only help us as we continue to drive towards our goals. We will continue to look for efficiencies and cost reductions where possible to maximise the use of the funds we have. We look forward to another year of strong growth in our Core Technology from both existing and new users, helping drive us towards our goals of self-sustaining cashflows and improving lives.

Craig Gulliford

Chief Executive Officer

18 May 2025

Chief Financial Officer Report

2024 delivered significant growth in Creo Core revenues, led by Speedboat UltraSlim (which was cleared in late 2023). The increasing utilisation of this device throughout 2024 helped Creo achieve record Core Technology revenues for Q4 2024.

In September 2024, the Group announced the agreement to sell a 51% interest in Creo Medical Europe to Micro-Tech with net proceeds of €30m payable in cash on completion (the "Sale"). The Sale completed on 12 February 2025, with the cash proceeds being received on 14 February 2025, increasing the Group's cash and cash equivalents to £31.2m post sale. This transaction not only enables Creo to continue to fund the ongoing strategic development of its Core Technology business, but provides a strategic partner through Micro-Tech which strengthens Creo's commercial platform in Europe and beyond. As a result of the Sale, we accounted for Creo Medical Europe as an asset held for sale as at 31 December 2024. Prior to the end of 2024 we also reached heads of terms to sell Aber, a Creo subsidiary, as part of a Management Buy Out. This has also been held as an asset held for sale as at 31 December 2024. This transaction completed in March 2025.

The sale of Creo Medical Europe, together with our October 2024 fundraise of £11.1m (net of fees), has provided Creo with additional cash runway to deliver future revenue growth, product development plans and deliver our licensing partnership plans.   

As committed, we initiated a raft of cost saving plans during the latter part of 2024. This process reduced our annual cost base by more than £5m going into 2025. These savings are in addition to the reduction in the cost base that has arisen from the sale of Creo Medical Europe and Aber. These operational changes underpin our platform to drive towards our goal of achieving self-sustaining cashflows.

Revenue and other income

Total revenue was £30.7m (2023: £30.8m) with continued operations revenue being £4.0m (2023: £4.0m). The balance of £26.7m (2023: £26.8m) is classified as discontinued operations.

The Group achieved a 74% increase in Creo Core Technology revenues to £4.0m (2023: £2.3m), with £2.4m of sales in H2 24, representing 50% growth half-on-half. Creo Core Technology revenues include sales from all core products such as Speedboat UltraSlim and CROMA platform and significant new customer additions during the period.

Creo Medical Europe Consumable revenue was up 2.6% in constant currency with total revenue of £26.7m (2023: £26.8m) reflecting some FOREX headwinds in the period. Creo Medical Europe consumable sales are classified as discontinued operations in the Group's FY24 results.

Good progress was made towards the commercial use of the MicroBlate Flex ablation device for robotic-guided procedures for lung cancer. Two UK sites are now performing combined diagnosis and ablation procedures using MicroBlate Flex with the Intuitive Ion Endoluminal System. As part of the amended agreement with Intuitive (as announced on 2 July 2024), further sites are expected to come on stream in the near future, with the expectation that each site becomes revenue generating once the initial cases have been completed. As such, whilst the initial cases are being completed, no revenues associated with this were recorded in the period (2023: £1.7m).

Other operating income of (£0.4m) in the 12-month period to 31 December 2024 (2023: £0.4m) relates to the Welsh Government grant being de-recognised in the year as it became evident that the grant conditions will no longer be fulfilled in relation to job growth, following the reduction in headcount during H2.

Gross margin

Gross margin on a continuing basis decreased to 46.6% (2023: 58.6%) in 2024 driven by the decrease of £1.7m in high margin Kamaptive revenue from 2023. Excluding the Kamaptive revenue the margin has increased to 44.5% (2023: 40.2%). As we mature as a business it is expected that gross margins will continue to improve with increased sales of the Core Creo products along with further revenue growth from bundled EndoTherapy products as the install base of CROMA systems grow.

Operating loss

The underlying operating loss for the year on continuing operations increased to £22.3m (2023: £20.9m). This increase is due to the decrease in R&D tax credits of £0.8m to £2.0m (2023: £2.8m) as a result of the R&D Tax relief reform changes announced in early 2023. In addition to this, £0.8m of Kamaptive margin leaves an underlying reduction of £0.2m year on year. Underlying Administrative expenses remain broadly flat year on year with c.£5m of cost savings to be realised in 2025.

*non-statutory measure. Underlying Administrative expenses is calculated by taking Underlying Operating (Loss)/Profit and adjusting for Gross Profit and Other operating income

Whilst underlying EBITDA and underlying operating loss are not statutory measures, the Board believes they are helpful to include for investors as additional metrics 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 pursue ongoing commercialisation focus of its approved products. The underlying EBITDA position excludes SIP charges and Earnout charges (contingent and deferred payments on previous acquisitions), individual items outside of business control, 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. The underlying operating loss position is the same as underlying EBITDA but also excludes share-based payment expenses which are non-cash.

Tax

The tax credits recognised in the current and previous financial year relate mainly to R&D tax credit claims. As already noted above, this was c. £0.8m less than expected due to legislative changes following the budget in March 2023 at £2.0m (2023: £2.8m). This has a direct detrimental impact on cash and P&L for a company such as Creo.

Expenses

Underlying administrative expenses on continuing operations totalled £23.8m for the year (2023: £23.6m). This 0.4% rise (2023: 5.6% decrease) includes c. £0.8m (2023: £2.0m) less than expected R&D tax credit due to legislative changes following the budget in March 2023.

Total administrative expenses on continuing operations totalled £30.3m for the year (2023: £29.6m).

Non-cash expenses comprising of SIP charge, share based payments expense, de-recognising the Welsh Government grant (as noted above) and depreciation and amortisation were £3.3m (2023: £2.7m) on continuing operations.

Loss Per Share

Loss per share was 8 pence (2023: 8 pence) on continuing operations.

Dividend

No dividend has been proposed for the year to 31 December 2024 (2023: £nil).

Cash Flow and Balance Sheet

With the support from our shareholders, we were able to execute on a £12m fundraise in October 2024. This was secured against a backdrop of economic pressures and difficult market conditions and represents a significant achievement for the Company, providing us with the financial platform to deliver growth until we were able to close the sale of Creo Medical Europe.

Net cash used in operating activities was £22.2m (2023: £21.6m). Net cash from investing activities was £15.3m (2023 used in: £18.3m). Cash generated from financing activities was £16.2m (2023: £29.8m) raised from the October fund raise (net of expenses) and loans provided to Creo Medical Europe.

Total assets at the end of the year decreased to £65.0m (31 December 2023: £76.6m), a 15.1% decrease, reflecting cash received from the equity raise offset by the reduction in cash due to operating activities and the accounting treatment for the asset held for sale.

Cash and cash equivalents at 31 December 2024 was £8.7m (31 December 2023: £18.5m).

Net assets were £42.4m (31 December 2023: £59.8m), a 29.0% decrease, as noted above due to the equity raise offset by the reduction in cash due to operating activities and the accounting treatment for the asset held for sale and share based payments expense. Following the completion of the sale of 51% of the issued share capital of CME at an equivalent equity value of €72m on a cash-free, debt-free basis on 12 February 2025, the net proceeds of €30.4m were received on 14 February 2025.

Sale of Creo Medical Europe

In addition to the consideration received from the Sale, the remaining 49% stake held in Creo Medical Europe will bring revenue via a share of the annual profits of Creo Medical Europe and cash inflows via annual dividends distributed from any annual profits going forwards. On completion of the Sale, a €36m investment asset was recognised and held on the balance sheet, providing future balance sheet strength to the Group.

Accounting Policies

The Group's financial statements were prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Group's accounting policies have been applied consistently throughout the year.

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 and monitored. 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 Pioneer Clinical Education Programme, integration of acquired entities, ESG metrics such as carbon emissions, diversity ratios and employee engagement (see Directors' Remuneration Report in the 2024 Annual Report and Accounts). All non-financial measures are monitored monthly. 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 2024 Annual Report and Accounts.

Directors

Details of the Directors who served during the year ended 31 December 2024 are set out in the 2024 Annual Report and Accounts. Seven Directors serving on the Board at the year-end were male with one female.

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 situational or transactional conflicts that are to be considered at the 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.

Richard Rees

Chief Financial Officer

18 May 2025

Consolidated statement of profit or loss and other comprehensive income

*Restated following the completion of the sale of 51% of the issued share capital of Creo Medical S.L.U. ("Creo Medical Europe"), a wholly owned subsidiary of Creo, to Micro-Tech (NL) International B.V., a wholly owned subsidiary of Micro-Tech (Nanjing) Co. Ltd (SHA: 688029) on February 12th 2025.

Where figures are shown "0.0" this means the figure is lower than £50,000. Where figures show "-" this means the value is nil