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Shares in Creo Medical Group PLC (AIM:CREO), a company specialising in surgical endoscopy and advanced energy licensing, are rated by Deutsche Bank as 'buy' up to 80p.
In a short update in the wake of full-year results, the German outfit flagged as its key highlight the approval and launch of the Speedboat UltraSlim, which improves compatibility with a broader range of endoscopes. This development is expected to enhance the company's market position and drive future growth.
According to DB, the numbers were all in line with expectations. Sales grew by 13% to £30.8 million, while core technology revenues, including the Speedboat device, increased significantly from £0.9 million in FY22 to £2.3 million in FY23. Combined licensing and core technology sales amounted to £4 million. Consumables sales grew by 8% to £26.8 million. Creo Medical ended the year with a net cash position of £18.5 million.
In afternoon trading the stock was up 1.3% at 36.98p.
Text book buying the dip. Encouraging.
If a raise were need ( and I don't believe it will), I'm not seeing any justification or need for 15p-20p as some posters here and elsewhere have suggested.
There is some goo stuff here
https://www.investormeetcompany.com/meetings/audited-full-year-results
Other sources of funding could include a licensing deal etc.
I wouldn't read too much into the going concern jargon. Whilst it is a real risk, much of what they have to say is obligatory.
Breadvan. Well lets hope so. There's always a bit of doublespeak in such statements though. Profitability might be a couple of quid a year in the black taken in its literal interpretation. In which case a raise is still possible/likely although such a call would be better received generally if there was positive cash flow. Hopefully!.
"We believe that the current revenue trajectory, future licensing deals and operating cost flexibility provide a clear strategy to ensure sufficient cash resources to get us to profitability."
It's going to be tight, but they believe they can do it.
The RNS going concern statement doesn’t sugar coat the situation which is pretty refreshing. In my opinion (for what little it’s worth) there will be another raise looking for around 20m. Normal behaviour would be to wait for some good news to bump up the sp first. Or if the share price starts to decline bring the raise forward while it’s still worth something!.
Porky9 advised me to sell on 9th March over on VAL bb.
Suggesting a placing around 38p then back at 32p now.
It may need one more fund raise. If growth goes the way we hope, they’ll be stretched working cap wise. I bought today and would buy aggressively in a future placing. Raising funds to expand a growth business is a good thing. We in U.K. AIM have temporarily forgotten that.
It's worth highlighting the worst case scenario, thanks busicat, but realistically they are likely to find extra funding if they need it. Albeit, it could be another fundraise, but it could equally be another source. The growth numbers are impressive, imo, but evidently slightly below what the market was hoping for. This company rarely report upside surprises, but we live in hope. Possibly a buying opportunity for the quick and the brave, but the dip is relatively small, so far.
I am afraid it is one of those companies you relist in the USA and you get three times the existing market cap. The product is approved in Europe and the USA ! Give it a year to gain traction…they have to train people to use it first !
Hmm - could go either way. Although revenue + costs going in right direction, "Downside scenario" could mean cash exhausted in 12 months.
"We have a clear strategy to ensure sufficient cash resources to get us to profitability, however as a high growth MedTech company future revenues and future investment are not committed and this represents a material uncertainty resulting in significant doubt in respect of going concern as disclosed in the 2023 annual report and accounts. However, we believe that the current revenue trajectory, future licensing deals and operating cost flexibility provide a clear strategy to ensure sufficient cash resources to get us to profitability."
"The Directors have prepared a base case scenario which is based on the Board approved forecast and assumes an increase in revenues particularly from its core revenue streams and Kamaptive licensing programme for the year to 31 December 2024 compared to the year ended 31 December 2023. In addition, the Directors have modelled a severe but plausible downside scenario for the going concern period. This scenario includes sensitivity analysis to delay a proportion of future expected but not contracted growth in revenue and assumes no savings in expenditure are made. This downside scenario indicated that the cash resources of the Group would be exhausted in around 12 months from the date of approval of the financial statements, and a breach of loan covenants will occur within 12 months, before taking account of mitigating actions. The Directors have identified several areas where a reduction in expenditure on the Group's research and development programme and other areas could be made if such a scenario were to occur to ensure the Group would be able to meet its liabilities as they fall due for the going concern period, without needing to obtain waivers on the debt covenants."
"The Group continues to make progress towards profitability as we continue to seek to ramp up commercialisation. The Directors have identified several potential sources of funding which could provide sufficient cash to the business to reach positive cash generation, should a downside scenario arise. At present these sources of funding remain uncommitted and a substantial proportion of the forecast revenues remains uncommitted for the going concern period and beyond. The Directors recognise that if no additional funding is secured during the next 12 months or if the Group fails to secure additional revenue contracts as forecast then the Group may breach debt covenants and may not have sufficient resources to meet its liquidity requirements and be unable to continue as a going concern. "
Final results should confirm cash runway on Wednesday I hope!
150p? Beam me up, Charlie, this planet is full of coconuts
It would be nicer to hear from NICE
Only if the share price rises above 150p
After the awards ceremony in July Craig Gulliford will presumably be known as King Creo?
Nice spot TG. There has obviously been a bit of a PR round today. There is a more in depth article here that mentions Creo directly
https://www.shropshirestar.com/news/uk-news/2024/04/30/hope-for-robotics-to-help-diagnose-and-treat-lung-cancer-in-one-procedure/
Prof Pallav from Royal Brompton sounds happy.
https://news.sky.com/story/robotics-could-be-used-to-diagnose-and-remove-lung-cancer-in-patients-in-one-sitting-medics-says-13125645
What director buying???
The most recent Director share purchase according to the RNS's published on this site, was 13th March 2023; at the Open Offer over 1 year ago.
There have been share awards and Long Term Incentive Plan take ups, but no actual share buying since then.
I doubt that we are profitable yet. Breakeven this year perhaps?
Loads of Directors buying now, a good sign. Confidence in the company as its making progress and profits.
" results were still 6 months away ", "His "6 months" seems a bit like a finger in the air"
Didn't he actually say "within the next 6 months"? Not saying that's reliable, but it's different from "in 6 months"