The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Gulliford highlights the benefits of the Albyn acquisition, which effectively provides a ready-made US distribution network for the new products, which to some extent complement existing Albyn offerings
Thanks Mesquida. It's dated 17th August:
https://www.edisongroup.com/edison-tv/creo-medical-executive-interview-with-craig-gulliford-ceo/32615/
Suprised that nobody has mentioned the Edison video interview. It has been available for 4 or 5 days but so far has only been viewed about 70 times. Well worth a look.
Good post Sheerclass. I agree that in isolation the Oldham numbers are not that exciting but I think what we are seeing is an increase in noise from Creo as take up widens. We know that the addressable market is huge, we know their is no competing device, we know that the take-up process is necessarily slow but most importantly we can now see the first signs of a proper momentum. Other hospitals and other surgeons across the UK (and I guess abroad) will be taking note. Cash burn does of course remain a concern and I have no doubt at all that in the past this has been excessive. Back in February the company promised a significant reduction in headcount this year and this is what I would like to see. How they managed to get to 375 headcount with such derisory sales does seem astounding but they set a 100 headcount reduction as their short-term objective. Hopefully they can achieve this through natural attrition because the last thing we need is a raft of redundancy costs. Please do share the Molten Ventures take on cash burn.
It's a very positive RNS, however it's got to be considered in the context of each device generating ~£850 revenue (Cenkos note in Nov 22). So annualised it looks like Oldham could do around 150 devices, so £130k revenue. To really start scaling they need dozens of sites like Oldham. Let's see what the interim cash burn looks like when they report next month, I think they have amazing potential but they've overreached in their roll out strategy. They should be aiming to conquer the US, UK & EU first and then ROW, instead they are doing it all at the same time. This means cash burn is excessive.
There is a good comp is the Molten Ventures portfolio that I'll post later that illustrates just how excessive Creo cash burn has been - I don't see that changing in the next couple of years and do think they'll need more cash as a result.
Fabulous RNS!
Positive news. Word out and support building from the med community. I'd like to see another training hub appear in another part of the country. Being at risk of BC myself, it's a bonus to know the procedure actually removes suspected pre cancerous tissue.
I suppose most micro pharmas are basket cases until the product or drug is proven in the field. We have proven successful, now we just need to push sales and avoid a round of funding.
I would characterize doubling revenue from core tech as a little bit more than "encouraging". It is a marked improvement from previous years. A step change. Not sure how expectations got so high here - prior to the fundraising this was generally regarded as a basket case.
Yep. Realistically the improvement in sales is encouraging but certainly not explosive. Getting more users is clearly critical but if achieved will be reflected in significant increases in consumable sales. I'm idly wondering without having a clue to the answer whether the ability to supply the consumables might be an issue if the products really take off. Personally, overall I'm quite encouraged if for no other reason than there have been no real negatives in the medical outcomes. Quite the opposite so far. ALL IMHO obviously!.
Yes all encouraging. Would be much happier if I saw details about promised reduction in headcount, hopefully as R & D tails off this will be delivered. Simply has to get to profitability without a further raise, this has to be the holy grail.
A lot of the r&d has been done, the cash balance should be very healthy. Its now abut pushing sales. Happy to sit and wait for next God news which might not be far away by the shift in sp. It looks like our support is between 31 and 40
Looks like the take-off is now in progress for real, not just words. Growth delivered, and realistically lots more to come.
Another huge one same time today but for half a mil £ ... massive !
Possibly buy & sell (transfer into another account)
Must had been a sell
That's odd.. must be going mad.. swear I saw them as buys !
It will be interesting to see tomorrows opening. Delayed ‘unknown trades’ can be a bit misleading.
BTW, are you sure they were 'buy's ? I can only see 'Unknown'.
Wow! It wasn't me - honest :)
That is quite a move methinks.
Did you guys see those two buys which went through end of day, total £250k !!!
I agree that LTIP should be paid out of profit not by issuing more shares. Whilst going down the share route is fine if the issue is a fraction of 1% this is a not insignificant dilution. It neatly sums up the profligate issuance of shares prevalent on AIM where significant numbers are issued like confetti. Not over happy with the scale of this myself. It tends to put the recipients in a cant really lose but can win big situation.
I guess if the share price trebles and the payout would equate to over 10m we would still be pretty happy., if it falls its a dilution used to supplement already impressive salaries. If we assume 300 employees for simplicity I believe its around 12 thousand (£) each although I suspect heavily biased towards management in reality. Any employee share scheme I have ever participated in in the real world involved me paying for the shares myself albeit at a discount. Which you would happily do if you believed in the company prospects.
Yes, specifically it's for funding a Long Term Incentive Plan (LTIP) where employees get bonuses for reaching specific targets which are supposed to enhance shareholder value. It's a good idea in principle, but shareholders usually have no say in what the targets are, and the main benefits tend to go to the people setting up such schemes.
Some might question why about £3.5m is being set aside now when the company is still estimated to be about 3 years (?) away from breaking even. Shouldn't such bonuses be paid for out of profits, not fundraising?
Am I correct in saying this is for productivity bonuses. If so I believe its positive that they think they need one. We needed a reset anyway for the next news. :)