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Creo Medical - Setting the stage for pivotal growth

Creo Medical’s FY23 results recapped strategic, regulatory and operational wins for its core electrosurgical device suite, including Speedboat’s approval for upper gastrointestinal (GI) procedures in Europe and launch of Speedboat UltraSlim. With MicroBlate and SpydrBlade nearing commercial launch and increased traction with partners Intuitive Surgical and CMR Surgical, we anticipate the product uptake curve to steepen in the medium term. FY23 was a solid year with 13.4% y-o-y revenue growth and Creo’s core portfolio more than doubled to £2.3m, with a c 120% increase of its user base. Q124 core revenues were c 14% higher compared to the FY23 quarterly average. Cost optimisation drove the narrowing of operating losses to £16.4m (FY22: £20.8m) and we continue to project topline growth and current cash at hand (gross cash of £17.4m at end-Q124) to support break-even in H126, slightly more conservative than management’s FY25 target. With minor adjustments to our estimates and rolling our model forward, we value Creo at £506m or 140p/share.