2022
Annual Report
Anything is Possible
with the Right Approach
Creo Medical is a medical device company focused
on the development and commercialisation of minimally
invasive electrosurgical devices, bringing advanced
energy to endoscopy.
CONTENTS
1
Strategic Report
Introduction
Our Achievements
Timeline
CEO’s Review
Global Footprint
Training and Adoption
Territory Overview
Business Model
Market Review
Core Technology
Our Portfolio
Investment Case
Transforming Patient Lives
Healthcare Providers
Pioneer Clinical Education Programme
Healthcare Economics
Case Studies
Kamaptive Technology
Core Technology
CFO Review
Risk Management
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8
10
12
14
16
18
20
22
24
26
28
30
36
40
42
44
52
58
62
66
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3
4
Sustainability Report
Sustainability Strategy
Sustainability Statement Explanation
Healthcare Impacts
Our People and Communities
Our Planet
Corporate Governance
Chair’s Statement
Board of Directors
Directors’ Report
Corporate Governance Report
Statement of Directors’ Responsibilities
Engaging with Stakeholders
Audit Committee Report
Directors’ Remuneration Report
Financial Statements
Independent auditors’ report
Consolidated Statement of profit or loss
and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Parent Company statement of financial position
Parent Company statement of changes in equity
Parent Company notes to the financial statements
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Creo Medical Group plc — 2022 Annual Report & Accounts
Strategic
Report
CLINICAL CASE STUDIES
Learn how Speedboat Inject is improving lives
SCAN THE QR CODE TO READ OUR CASE STUDIES
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts
Introduction
Transforming Surgery,
Transforming Energy,
Transforming Lives
Creo Medical is a UK based medical device and advanced
energy company, transforming lives by delivering pioneering
solutions to healthcare providers across the world.
Our Kamaptive Licensing Programme has had a successful
year with income already generated and with our team
working extremely positively with others.
The Company was founded in 2003 by Professor Chris
Hancock, initially to target the treatment of cancers
through the use of high frequency microwave energy.
One in two1 people will develop some form of cancer in
their lifetime. We will all likely know someone who will be
or has been impacted in some way. These diseases can
be treated using advanced energy, with potentially huge
impact for both patients and their loved ones. Chris was
driven to apply this technology to make a difference to
improve people’s lives, and this is the foundation on which
Creo is built.
Our Products
Creo Medical has developed a suite of unique endoscopic
devices (see pages 24 and 25). When combined with
the CROMA advanced energy platform, the Kamaptive
Technology enables a broad spectrum of energies to
be utilised. It is this unique combination that puts us
at the forefront of a paradigm shift in the treatment
of an increasing number of indications, particularly in
the GI tract, pancreas, liver and lung. Creo is now able
to complement these devices with a broader range of
Endotherapy products, which are available to our EMEA
and US customers.
In addition to endoscopic products manufactured by Creo,
we have begun to work with leaders from other sectors
(particularly robotic surgery) through our Kamaptive
Licensing Programme in order to ensure that the benefits
of our advanced energy technology are maximised, both
in aiding the treatment of more patients and indications
worldwide and in generating income from multiple high-
growth markets.
Our Stakeholders
In pursuing our mission ‘to improve patient outcomes’, a
number of stakeholders directly or indirectly benefit from
our technologies:
Patients
▶ Improved patient outcomes
▶ Shorter procedure times
▶ Low recurrence risk (rate less than 1%2)
▶ Organ preservation rather than surgical intervention
▶ Reduced risk
Healthcare Professionals
▶ Minimally invasive treatment
▶ Reduced risks associated with surgical procedures
▶ Removal of lesions en-bloc (in one) for improved
histology and lower recurrence rates
▶ Streamlined training curve
Hospitals
▶ Reduced procedure costs
▶ Reduced procedure time and fewer follow up
appointments
▶ Reduced waiting times
▶ Improved patient pathways
▶ QALY (Quality Adjusted Life Years) value added
Transforming Lives, Case by Case
Creo’s products are in everyday use by some of the world’s
best physicians and healthcare institutions, particularly
our flagship device, Speedboat Inject, which is providing
excellent outcomes and for which we have a growing
pipeline of physicians globally.
We employ a wide range of experts spanning all Company
departments
▶ Engineering and R&D teams.
▶ Enhanced manufacturing capabilities optimised
for growth.
▶ Excellently connected sales teams and bespoke direct
and indirect distribution networks across territories.
▶ A world-class Pioneer Clinical Education Programme
tailored to the needs of our customers and their patients.
▶ Global business support functions to continue to build
the Creo brand globally.
With our Kamaptive Licensing Programme also coming
to fruition, it is clear 2022 was a year of great progress for
Creo. Having established a presence across the US, Europe
and APAC, the foundations are laid for rapid growth, not
only for Speedboat Inject but across our portfolio.
References
1. https://www.nhs.uk/conditions/cancer/
2. Saito, Y., Fukuzawa, M., Matsuda, T. et al. Clinical outcome of endoscopic submucosal dissection versus endoscopic mucosal resection of large colorectal tumors as determined by
curative resection. surg Endosc 24, 343–52 (2010). https://pubmed.ncbi.nlm.nih.gov/19517168/
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Our Achievements
Commercial and
Operational Highlights
Financial Highlights as
of 31st December 2022
Threefold increase in revenue
generated from Creo’s core technology
▶ Over 1,500 Speedboat Inject procedures performed to date
with the device now in everyday use
▶ 124% increase in global cases
▶ 200% increase in trainers vs 2021 on our Pioneer Clinical
Education Programme
▶ Announced first Kamaptive partnership with the world’s
biggest robotics company, Intuitive Surgical, and first
revenues received
▶ Announced non-exclusive IP licence and a royalty agreement
with CMR Surgical, the global surgical robotics business
▶ Launched our wider suite of Endotherapy products in the US
▶ Strengthened IP portfolio with 460 granted patents and 901
pending applications as at 31st December 2022
▶ Speedboat Inject introduced to new markets, with rapid
adoption in Thailand, Israel, Hong Kong, Singapore and
elsewhere
▶ New clinical market penetration with Speedboat Inject used
to perform multiple POEM procedures, including gastric
peroral endoscopic myotomy (“G-POEM”) and Zenkers
peroral endoscopic myotomy (“Z-POEM”) in the US and
APAC and a Gastrointestinal Stromal Tumor (“GIST”)
procedure in EMEA
▶ Slimmer Speedboat Inject released to market, opening new
opportunities
▶ Expanded Creo’s Pioneer Clinical Education Programme,
facilitating both multi-national and bespoke regional training
across the globe
▶ Fit-out of new Chepstow office to future-proof HQ and
increase manufacturing, operational and training capacity
▶ Microblate Fine used to treat patients in Europe
Revenue
£27.2m
(2021: £25.2m)
Operating Loss
£30.8m
(2021: £29.9m)
Underlying EBITDA loss*
Gross Margin
£22.1m
(2021: £22.6m)
48.3%
(2021: 46.0%)
Net Assets
Post balance sheet event
£49.4m
(2021: £73.3m)
£34m
(Oversubscribed Fundraise - March 2023)
Kamaptive Licensing Programme
Cash & Cash Equivalents
First Revenues
£13.1m
(2021: £43.5m)
* Underlying EBITDA is defined on page 63
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Timeline
Milestones and
Financial Achievements
2022
▶ Global commercialisation expanding
in USA, EMEA and APAC
▶ Kamaptive robotic licensing
deal with Intuitive in May
with first revenues
�27.2m
�2.3m
2021
▶ Additional CE and
FDA clearances
▶ Opening of APAC
Hub in Singapore
▶ Core product revenues recovered
to pre-pandemic levels
�25.2m
Key
Total revenue
Core Creo Technology
2017 – 2019
▶ First Regulatory Clearances
▶ CE Mark and FDA clearance for CROMA
and Speedboat Inject
▶ First patient treated with Speedboat
Inject
▶ Initial of roll out of clinical use
via distributors
�26k
�154k
2020
▶ Acquisitions of Albyn Medical and
Boucart Medical
▶ Opening of US HQ
in Danbury, CT
▶ COVID-19 Pandemic
restricted sales
channels and
markets
�9.4m
�101k
�313k
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
CEO’s Review
2022 was an inflection
point for Creo
“ A year of significant operational progress
and commercial traction cementing our
technology at the forefront of a paradigm
shift in patient treatment.”
—Craig Gulliford, Chief Executive
During 2022 we have moved quickly and decisively to
build on the strong global foundations laid over the last few
years. This resulted in: a four-fold increase in users of our
core technology; partnering with two of the world’s biggest
robotic surgery companies with first revenues received;
and making notable improvements to our flagship devices
(significantly, releasing of a slimmer Speedboat Inject to
market in November 2022).
Since the second half of 2021, operating losses have
consistently reduced. Notwithstanding our progress, like
all shareholders, I was disappointed with Creo’s share
price performance during the period. The combination of
a number of factors outside of Creo’s control, including
the economic whirlwind caused by UK’s mini-budget
in September, fuelled market nervousness which
disproportionally impacted the access to capital needed
by many early stage, high growth prospect businesses like
Creo. With the support from our shareholders, we were able
to execute on a planned anticipated final fundraise which
was significantly over subscribed, early in 2023 to provide
Creo with a strong cash position from which we can enter
the next stage of our development and commercialisation
of Core Technologies and drive the business through to
cash flow break even, and, ultimately, profitability. I thank
all shareholders, new and old, for the support provided.
Looking back to our IPO in 2016 and the early-stage
medtech business that Creo has grown from, it is clear that
we have made significant progress.
Despite the worldwide disruption caused by COVID19,
the War in Ukraine and macro economic pressures, we
have remained ahead of our projections and continue to
improve lives.
Widespread Adoption
In 2022 our core technology improved lives in EMEA, USA
and APAC daily. The vision of placing flexible endoscopic
surgical capability into the hands of interventional
endoscopists and surgeons is real.
Over the year we significantly enhanced our heralded
Pioneer Clinical Education Programme, doubling the
number of training centres and offering multi-national and
bespoke regional models. Most importantly, we supported
the treatment of more patients than ever before.
As more clinicians utilise our technology, the likelihood
that it will be used to perform additional procedures
increases too. In July 2022, a team of clinicians in Israel,
led by Dr Sergei Vosko, applied Speedboat Inject to
remove a GIST from a patient for the first time.
See pages 46 to 47 for more details.
We continue to progress device clearances across
additional territories. The first reimbursement code for
resection procedures in the Upper GI tract was approved
by the AMA in late 2022 and is something we expect to be
of real commercial interest to our customers across the
lucrative US market.
The process we need to execute for continued growth and
to deliver a step change in patient care across multiple
areas of therapy is clear. The rapid increase in patients
treated, our growing pipeline of future users and our
international successes all validate this.
Additional Revenue Streams
We have developed Creo’s business from the outset
to have a multi-tiered revenue structure. Through our
previous three-tiered build-buy-partner strategy we
successfully acquired and integrated Albyn Medical and
Boucart Medical, maximising the potential of both our core
technology and acquired complementary product ranges.
The subsequent acquisition of Aber Electronics in 2021
secured some of the best Microwave and RF engineering
capability in the world, bolstered our existing team and
secured a key element of our supply chain. With our
accelerated growth and significant international footprint,
we are leveraging this growth and our economies of scale
for the benefit of our core product range.
During 2022 we launched some of our endotherapy
accessories, which sit alongside the core Creo GI products,
in the US. We aim to replicate this into APAC during 2023,
building on the successes of our European model and
growing the Creo brand.
I am particularly pleased with the progress of our
Kamaptive Licensing Programme during 2022. We secured
agreements with two of the world’s biggest robotic surgery
companies. The quality of our partners demonstrates the
wide potential of our technology. The receipt of our first
revenues from our Kamaptive Licensing Programme affirms
this valuable revenue tier for Creo.
Our focus on the optimisation and commercialisation of our
product range will maximise the impact of our Kamaptive
Licensing Programme. Reshaping our engineering
resources to meet the challenge of these opportunities has
naturally resulted in some difficult decisions being made
to structure our team composition and capabilities as we
concentrate on successfully delivering the next phase of
Creo. My sincere thanks go to those departing colleagues
who helped us reach this point.
We now have a clear roadmap to enable our Kamaptive
Licensing Programme and additional products to work in
tandem with Creo’s core technology, providing a multi-
faceted business capable of reaching far more patients
and potential markets than we would have imagined a few
years ago. We are now bringing laparoscopic capability
to flexible endoscopy, both large and exciting markets
underserved by advanced energy.
The Future
2022 was an inflection point for Creo, with significant
operational progress and commercial traction cementing
our technology at the forefront of a paradigm shift in the
treatment of patients across multiple indications.
Building on this progress, we continue to commercialise
Creo’s core technology, improving the precision and control
we afford our customers whilst enabling the delivery of
further surgical outcomes.
The Kamaptive Licensing Programme offers significant
potential beyond our current partnerships to develop a
range of potential derivatives of our technology into other
partner programmes.
The next stage of the ‘tech play in medical devices’ is
equally exciting. As our partnerships bear fruit, my vision is
to launch the CROMA – powered by Kamaptive developer
eco-system, safely giving commercial access to the unique
core technology we have to a wide range of potential
partners, inspired by the reality of the current partner
programmes.
2023 is already moving at pace. Having submitted 510K
FDA clearance for our slimmest Speedboat possible, the
Speedboat Flush, we will continue the introduction of
Microblate Fine to soft tissue ablation in the liver. We are
preparing for clinical trials for Microblate Flex in the lung and
a whole host besides. This will be delivered alongside the
further integration of our wider portfolio of products and their
introduction to significant new markets, whilst continuing to
evolve the Pioneer Clinical Education Programme.
Tying this all together is the continued development of
CROMA and with it the prospect of delivering truly game
changing real time tissue characterisation software.
Building on some key engineering undertaken in 2022,
‘Tissue Sensing’ has the potential to add tremendous
value to flexible endoscopy. The prospect of enhanced
precision and control opens up a new frontier for patient
outcomes, not to mention the potential benefits to
robotic surgical programmes.
It is both a source of great pride and satisfaction to me that
we have created a terrific team who know what we need
to do in each sector to succeed. Alongside partnerships
with some of the world’s best surgical robotic partners, our
job is clear: to deliver on what we have very clear sight of
over the coming months and years to become a premier,
cash generative global medical device and tech licensing
business, transforming and improving the lives of many
thousands as we do so.
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Global Footprint
The Foundations for
Sustained Growth
Creo Medical’s global activities span Clinical and
Regulatory, Manufacturing, Training and Education,
Market Development and Direct and Indirect Sales.
US
EMEA
APAC
284 people worldwide
Technology,
Research and
Development
Domain expertise
in advanced energy
and devices
Full R&D and support
engineering capabilities
Medical energy
(RF, MW and more),
electronics, device,
materials, expertise
Clinical and
Regulatory
Training and
Mentoring
Manufacturing
Procurement
and Logistics
Sales and
Commercial
Service and Support
Experienced Regulatory
and Quality team
UK, EU and USA
based personnel
Creo products are
cleared in CE, FDA
and wider areas
Clinical education team
covering Europe, USA
and APAC, with dedicated
nurse endoscopist
employees assisting
training labs and
procedures, 20+ trained
trainers (doctors), with
courses run globally
Creo manufactures/
assembles advanced energy
generators, devices, a range
of additional equipment and
some dedicated electronics
in-house in the UK, Spain and
Germany, with clean room
facilities
Full procurement and logistics
function with key hubs in the UK,
France, Belgium, Germany, Spain
and the USA shipping own and
third-party products from and to
a wide range of countries
Experienced market development
and sales team with deep industry
experience and strong relationships
with doctors and hospitals. Local
teams in local healthcare systems,
augmented by select country
distributors
Dedicated service and support
function based across seven
countries to support Creo
equipment from installation,
through maintenance and repair.
Close working relationship with
engineering teams
granted patents &
460
901
pending
CE, FDA and other
clearances on
core technology 20+
trainers and c.450
qualified target
users
4
assembly/
manufacturing
locations in Europe
6
key logistic sites
moving products in
country & worldwide
* All figures as at 31 December 2022
sales and market
development workforce
100+
10
direct countries
service centres
8
14
offices
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Training and Adoption
A Year of Strong
Progress
“Premier institutions want to use
Speedboat and are getting great results
for their patients.”
—David Woods, Chief Commercial Officer
We began 2022 with four principal
aims in relation to our core products
1 To continue to build our user base
and expand the number of cases
using Speedboat Inject
2 To enter new markets—not only
in terms of sales but in regional
regulatory approval, distribution,
and training
3 To introduce a wider range
of complementary products
supporting better outcomes
for advanced procedures
4 To build the Creo brand with key
opinion and community leaders
bringing innovation to their
patients and robust data sets that
further validate our technology
1. User Base
Creo Medical has three primary targets for Speedboat Inject—interventional
gastroenterologists, foregut, and colorectal surgeons. During 2022 we have
increased the user base of all three by introducing advanced energy to procedures
such as Endoscopic Submucosal Dissection (“ESD”) in lower and upper
gastrointestinal (“GI”), per-oral endoscopic myotomy (“POEM”) in the oesophagus,
stomach and Zenkers diverticulum, a pouch formed at the beginning of the
digestive tract. Premier medical institutions and physicians around the world now
use the Speedboat Inject and CROMA platform to deliver Speedboat Submucosal
Dissection (“SSD”) for these expanded indications.
Whether it’s Baylor College of Medicine in the US, Asian Institute of
Gastroenterology in Hyderabad India or University College Hospital in the UK,
it is clear that premier institutions want to use Speedboat and are getting great
results for their patients. The combination of our technology, our Pioneer Training
programme and our clinical team has made the adoption of our devices a smooth
and localised process that will allow us to continue to increase our regular users,
trainers, and mentors. Early adopters at academic institutions, are now training
their colleagues and the next generation of physicians or fellows as well as
community-based doctors interested in learning these procedures faster and more
safely than possible previously.
With direct commercial teams in the US, the larger markets in Europe and
distributors in the rest of EMEA and APAC, targeted leads have turned into c.450
qualified physicians moving through a sales and training funnel to support a sharp
uptick in future sales, users and cases in 2023. These physicians are made up
of classically trained Endoscopic Submucosal Dissection doctors at academic
medical centres who publish, teach and research, as well
as EMR physicians in the larger audience of community-
based GI physicians. Additionally, the recent introduction
of a slimmer Speedboat device, compatible with a wider
range of endoscopes, will promote broader utilisation with
current and new users. The smaller devices allow simpler
access deep into the colon with paediatric colonoscopes,
easier retroflection techniques, accessing more difficult
lesions behind mucosal folds. The response from users
both new and old has been fantastic and we look forward
to seeing the slimmer, optimised device continue to drive
the number of users and cases.
2. New Markets
In 2022 we added many customers in countries such
as the US, UK, Italy, France and India while continuing
to provide products and services to hospitals across 75
countries. We successfully completed further country-
specific regulatory approval for the CROMA Generator
and Speedboat and introduced Creo to new customers
in Belgium, Turkey, Croatia, Israel, Thailand, Hong Kong,
UAE and Chile. Distribution partners now target regional
gastroenterologists and surgeons to introduce our
technology and include them in regional Pioneer Clinical
Education Programmes. With an established presence
across EMEA, the US and APAC we will continue to expand
globally, quickly taking countries from being introduced to
our technology to having multiple users. Israel is a great
example of where we’ve done that successfully in 2022.
3. Complementary Products
50% of our revenue is now being driven by products where
Creo is the responsible manufacturer. This is a combination
of our advanced energy products and complementary
devices that support many of the same procedures. For
instance, the Speedboat Inject, with hemostasis clips and
injection needles supports lower GI resection procedures
and upper GI swallowing disorders. A Creo manufactured
pack of high-quality resection, injection and closure
devices offers a high value proposition with great clinical
outcomes. Other complementary GI endotherapy products
support other procedures offering bundling and additional
service opportunities.
Some products in other specialties like urology and
interventional pulmonology provide additional bundling
opportunities and revenue streams within the same
institutions.
Benefits of a wider portfolio of products include; a steady
and established revenue stream, sales access to hospitals/
clinicians to better package the sale of our core range,
and a strong value proposition for our customers by
cross selling products. This approach will continue into
APAC, subject to regulatory clearances. Creo’s other core
products at various stages of optimisation and adoption
offer other bundling opportunities in multiple specialties.
4. KOLs and Data
Many of the world’s top healthcare institutions and premier
interventional gastroenterologists and surgeons have
adopted Creo’s advanced energy technology. These leading
care givers, educators, and researchers have validated
our innovative technology, promote the minimally invasive
procedures we support, and back our commitment to
education. Many are faculty members at our Pioneer
Training programmes and mentor other doctors with case
observations, case reviews and shoulder to shoulder case
support.
Several of these opinion leaders are also involved in
technology review, product development and product
validation. These physicians highlight our technology at
society meetings, webinars and live endoscopy events
around the world and are committed to research data
collection and publishing. We are already seeing an uptick
in clinical data gathered over the past 12 months being
submitted for presentation at large society meetings like
Digestive Disease Week in the US, EMEA and APAC and in
some of the world’s foremost medical journals in 2023. With
case numbers now supporting more robust, statistically
significant data, we anticipate a substantial increase in
comprehensive data sets, both clinical and economic, to be
made public by some of our early adopters very soon.
In addition, two registries, one in the US and one in UK,
are gathering data on Speedboat submucosal dissection to
support data analytics, journal submissions and clinical and
economic outcome enhancement. We are working closely
with renowned certification bodies and societies such as
NHS, ESGE, ASGE, and JSGE to maximise the impact of
the results in independent clinical papers and to recognise
SSD as a gold standard of treatment. This will provide a
platform from which to increase our user base across our
core technology product range, shift patient care away from
invasive procedures towards minimally invasive procedures
and the life changing treatment options we can provide to
patients.
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Territory Overview
A Global Reach
EMEA
USA
APAC
Creo Medical has a robust, well-established distribution
network across EMEA that allows us to sell our full range of
products.
Thanks to the acquisitions of Albyn Medical and Boucart
Medical, our direct market now covers most of mainland
Europe, building on existing networks and relationships
forged over a decade or more.
We also have a growing number of regional distribution
partners, who play a vital role to support Creo’s direct
sales. By working closely with our partners, we are able
to provide the best level of service, support, training,
and access to our products for healthcare providers and,
ultimately, transform the lives of more patients.
Our range of GI, Urology, Pulmonology and Surgical
products provides a stable revenue stream for the business
as well as a strong platform on which to sell and bundle
our core technology. We continue to increase our visibility
and brand awareness through targeted marketing and PR
campaigns to reach new customers.
Our focus for 2023 is to build on the previous year,
introducing advanced energy to new customers and further
leveraging our established customer base to increase the
sales of our ancillary devices.
See Israel Case Study on page 45.
In the USA, we primarily utilise a direct sales approach
supported by our in house clinical support team. We
have recently added additional independent sales
representatives to supplement our business development
resources to reach a wider range of customers and
increase our market presence.
The US team is actively engaged with a vast network of
highly skilled clinicians. The quality of the interventional
gastroenterologists which have been through the Pioneer
Programme to train on Speedboat Inject is testament to both
the potential for our technology and the value derived from
the training. Additionally, we have recently enhanced our
product offerings to healthcare settings, providing a more
comprehensive range of options. By aligning more closely
with what has been successful in EMEA, we are able to cater
to a diverse set of needs in the healthcare industry.
Our strategy for the US market is to continue to broaden
our range of quality ancillary devices, to deliver a
comprehensive therapeutic strategy with procedure
bundles and ancillary devices across gastrointestinal,
interventional pulmonology and foregut procedures.
In addition, we will look for opportunities to cross-sell
products alongside our core technology to increase
revenue. This will involve creating packages tailored to
specific customer needs and bundled offers that increase
the perceived value of our offerings whilst driving higher
sales and revenue for Creo.
Each APAC country has unique requirements for market
access. Creo Medical leverages a strategic distribution
model in the APAC region to market and sell our core
technology. By closely managing a network of distribution
partners, we can reach and engage customers across
wide ranging and diverse markets. Our regional hub in
Singapore, which opened in April 2022, plays a key role in
coordinating these efforts.
In 2022, we accomplished a strong performance with
the successful introduction of new customers to our
core technology.
Our distribution partners under direct management
include India (North, West & South), Thailand, Australia,
Hong Kong, Taiwan, Vietnam, Malaysia, Indonesia, South
Korea, and Sri Lanka. This broad reach has helped us to
strengthen our market base in the region. In addition to
our distribution sales channels, we are also offering direct
sales through our APAC regional hub in Singapore.
In the LATAM region, we’ve set up our presence and
generated business through distributors in Chile and we
are securing distributorship for another two of the region’s
biggest markets—Argentina and Mexico.
During 2023 we will continue to build distribution networks
across further territories, introducing our advanced energy
technology to more markets across APAC and LATAM as
clearances allow. We will also be expanding our product
range in targeted countries during the early part of 2023.
See Baylor Case Study on page 49.
See Thailand Case Study on page 51.
Creo Medical is proud to be a Wales-based business with
a strong presence in key global markets. We are well
represented across EMEA (Europe, Middle East and Africa),
and have a growing presence in APAC (Asia-Pacific) and
the USA. This allows us to serve customers and partners
wherever they are, either directly by Creo or through
our network of managed distributors. Maintaining our
presence enables us to understand the unique needs and
demands of our customers so we can deliver our products
and services accordingly. Our blend of direct presence
and directly managed distribution partners allows us to
navigate the various cultural, regulatory and commercial
environments in which we operate or are expanding into—
ensuring seamless service delivery and support for all our
partners and customers.
Luis Collantes
President EMEA
Ryan Brennan
President USA
Tom Kwan
President APAC
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Business Model
Transforming Lives,
Case by Case
2022 has been a pivotal year for Creo, paving the way
for significant growth across revenue streams and, with it,
a clear and tangible path towards profitability.
Improving Outcomes Through
Advanced Energy
Improving patient outcomes is at the heart of everything we
do. Our Advanced Energy Technology benefits patients, saves
hospital resources and costs, and provides clinicians with
increased flexibility precision and controlled surgical solutions.
Our flagship device, Speedboat Inject, and the CROMA
advanced energy platform that powers it are premium, high
margin devices delivering clinical and patient benefits.
Having complete control over the manufacturing, training
and distribution of our products helps drive both clinical
excellence and the associated revenue.
Further development of our wider suite of devices
continues apace. This includes MicroBlate Fine, which is
showing positive results for Microwave ablation treatment
in the pancreas and, for the first time in 2022, the liver. We
are continuing to drive new indications and new territories
for our suite of products.
Our range of complementary single-use endoscopic
devices for diagnostic and therapeutic procedures coupled
with an established distribution network ensures that we
are now able to further maximise the revenue potential of
every case whilst providing a complete solution to
our customers.
Reaching More Patients Through Our
Kamaptive Licensing Programme
Creo continues to receive considerable interest in its
technology. Potential parallel applications provide
opportunities for growth, enabling us to exploit our
significant IP portfolio and ensure our technology is used
to treat as many patients as possible, across various
indications.
With the right partners, Creo’s Kamaptive Technology can
accelerate the change in how patients are cared for. The
licensing model provides a low outlay and high margin
return for Creo when our technology is adopted.
The Kamaptive Licensing programme has accelerated
during 2022 through partnerships with two of the
world’s biggest robotics companies, Intuitive and CMR.
The potential for future partnerships in this space is
extensive, with over 100 other surgical robotics companies
worldwide.
Our unique IP portfolio has a clear potential in several
additional, potentially lucrative markets, continuing to
place our technology at the heart of new patient treatment
options across more indications.
Single Use Devices
CROMA and our Advanced Energy single use devices
are premium, high margin products
+
Creo Medical has several complementary profitable and
market leading products spanning gastrointestinal (“GI”),
urology, pulmonology, and surgery that deliver solutions
for therapeutic and diagnostic procedures, as well as
cleaning of equipment.
+
The optimisation and commercialisation of a wider
range of Advanced Energy devices and the treatment
of an increasing range of indications
Every Case = Revenue
Kamaptive Licensing Programme
The licensing model provides a low outlay and high margin
return for Creo Medical when our technology is adopted,
allowing for a potential case by case revenue.
We have had a strong start to the Kamaptive Licensing
Programme, establishing partnerships with two of the
largest robotics companies, Intuitive and CMR.
The potential for future partnerships in this space is extensive,
with over 100 surgical robotics companies worldwide.
Our unique IP portfolio has a clear potential
to meet needs in several additional lucrative
markets in robotics and beyond.
21
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Market Review
Market Potential
Resection
Ablation
Robotics
ROW
USA
c.$1.1bn2
c.$1bn3
(est. 2031)
~20m4
Soft Tissue Surgery Procedures
~6m4
Line-of-Sight
Procedures
APAC
Lower GI Addressable Market
Lung Ablation
Soft Tissue Procedures
▶ Single NHS Trust experience based
▶ Based on estimated procedures3
▶ 1.8 million Intuitive procedures
and expected device cost for lung
ablation in 2031
in 2022 (Intuitive have significant
majority robotics market share)4
▶ 25+ cases completed using
MicroBlate Fine expected to
grow in 2023
▶ Similar c.$1bn market developing
in lung ablation by 2031
▶ 240+ shipments of MicroBlate
Flex within 2022
▶ c.6 million pa Intuitive line of sight4
▶ c.20 million soft-tissue surgery
procedures total market4
▶ Significant growth potential in
Soft Tissue Robotic surgery market
on c.13,800 colonoscopies
▶ 5.5% Complex polyps, of which
c.49% required therapeutic
intervention1 (c.2.6%)
▶ Applying to the US based on
16m colonoscopies p.a.2 implies
a c.$425m US and $1.1bn overall
total addressable market (“TAM”)
for lower GI
▶ Doctor interviews place
Creo target market c.$100m US
and EMEA within five to seven
years — lower GI only
▶ Additional market potential for
Speedboat Inject for upper GI
procedures
1 Based on individual account experience (not published)
2
US surgical procedure volumes 2010, Millennium Research, RPUS43SV10, February 2010 / idata Research 2019
3
Internal information on evolution of lung ablation 2023-2031
4
Intuitive Surgical JPM presentation January 2023 (Line of sight: Estimated robotically addressable portion
of targeted procedures in targeted geographies with existing products and clearances. Excludes Ion)
23
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Creo is focused on minimally invasive endoscopic and robotic assisted
surgery, in particular for pre-cancer and cancer surgery.
Core Technology
Creo Medical
Core Technology
n
o
i
t
c
e
s
e
R
A
n
o
i
t
a
b
A
l
Speedboat Inject is our flagship advanced energy
device product with over 1,500 procedures performed
using the device. Slimmer model launched in Nov
2022
Surgical device combining Speedboat blade
and precise Microwave coagulation in a unique
multi-modal jaw design
TARGET APPLICATION
▶ Bowel
▶ Oesophagus
▶ Stomach
▶ Bowel
▶ Oesophagus
▶ Stomach
Soft tissue Microwave ablation devices for ablation
of tumours in a wide range of tissue types
▶ Anywhere accessible
through the GI tract
▶ Same size as FNA needle
& uses same procedure
Flexible Microwave ablation device designed for soft
tissue ablation where flexibility and small diameter
is required
▶ Lung, stomach, oesophagus
and colon
▶ Key areas for Creo are Upper and Lower
Gastrointestinal (oesophagus, Colorectal),
Lung and Soft Tissue (Pancreas, Liver) surgeries
▶ Creo’s products also address needs in wider
(non-cancer) surgery
▶ All devices enabled by CROMA, powered by
Kamaptive. See pages 52 to 57
25
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Our Portfolio
Beyond the integration of staff, networks and processes,
our regional hubs in Spain, Germany, France and
Belgium provided Creo Medical with the opportunity to
manufacture, sell and distribute a wider range of products
in the fields of Endoscopy, Surgery and Urology.
The continued optimisation of the product portfolio forms part of Creo’s ongoing wider product strategy, namely to develop
and migrate products from being delivered through strategic distribution partnerships to increasing our ability to research
and develop these products—maximising revenue in the process.
This process has already begun and proven to be fruitful, particularly in the GI space, during 2022 (see CCO statement
on pages 16 to 17). By making more products compatible with our Core Product Range and our CROMA platform we will
continue to build on what we can offer our customers, providing a suite of complete ‘Creo-manufactured’ solutions for a
wide range of indications and procedures in multiple markets.
1 Core Product Range
Designed to provide the highest level of patient benefits, deliver cost savings and
the latest technology to healthcare providers. The Creo Medical business is built
around these products and they deliver a high margin return for Creo Medical.
2 Complementary Products
Our ancillary devices have been strategically chosen to extend the reach of the Creo Medical brand,
and work alongside our core technology to increase the Creo product portfolio across therapy,
diagnostics and cleaning. We have partnerships for the R&D and Manufacturing of these devices.
3
Strategic Distribution Partnerships
Can be bundled together with the Creo branded core technology and accessories to deliver a
full suite of solutions to our customer base. The partnerships with these manufacturers also
provide market insight and awareness of the state-of-the-art technology. When increased
volumes are reached, these products have the potential to be elevated to Creo branded products.
GASTROENTEROLOGY
UROLOGY
PULMONOLOGY
SURGERY
Powered by
▶ CROMA
▶ Speedboat Inject
▶ MicroBlate Fine
▶ Capital Equipment
for Device Hygiene
▶ Endotherapy
Accessories
▶ Hygiene
Accessories
▶ Manometry
Catheters
▶ Endoscopic
Capsules
▶ Sonoscape
Endoscopy Tower
▶ Urodynamics
capital equipment
▶ CROMA (not yet
available)
▶ CROMA
▶ MicroBlate Flex
▶ CROMA
▶ SpydrBlade
Robotics
▶ Urodynamic
Catheters and
Accessories
▶ Endotherapy
Accessories
▶ Single use
▶ Single Use
Steriscopes and
Cystoscopes
Bronchoscopes,
needles and stents
▶ ENT equipment,
Piezosurgery
Technology
27
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Investment Case
Unparalleled
Technology
Harnessing advanced
energy to treat indications
endoscopically
Intelligent
Technology
Multi-Tiered
Revenue Stream
Addressing
Global Needs
▶ The development of a suite of
▶ Core advanced energy
▶ Entering new and established
cutting-edge, miniaturised Creo
manufactured devices
▶ Combining engineering
experience with the latest
advancements in science and
technology
▶ Continued investment in R&D,
both in house and through our
Kamaptive partners, to expand
and enhance the treatment
options open to healthcare
providers
devices at various stages of
commercialisation, with the
slimmer Speedboat Inject
yielding an increase in orders
▶ Complementary products
providing opportunity to
maximise revenue per procedure
▶ Additional product portfolio
in areas such as urology,
pulmonology and device hygiene
providing consistent revenue
stream
▶ A broad intellectual property
▶ Kamaptive Licensing
(“IP”) portfolio
Partnerships progressing well,
providing revenue and milestone
payments with excellent potential
for future royalties
markets where there are significant
unmet needs in the treatment
options available
▶ Bringing advanced energy, until
now synonymous with surgery,
to endoscopic procedures
▶ Significant potential in robotics
partnerships
▶ Working with some of the
world’s leading healthcare
providers and physicians to
ensure clinical excellence when
introducing minimally invasive
alternatives to surgery for
patients across the globe
Read more on our intelligent technology
from our CTO and founder Chris Hancock,
pages 60 to 61.
Read more on our enhanced revenue
streams in our CEO and CCO statements,
pages 12 to 13 and 16 to 17.
Read more about how healthcare providers
and patients are already benefiting from
our technology on pages 31 to 43.
29
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Transforming
Patient Lives
31
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Transforming Patient Lives
Transforming Lives
Retired maths teacher Chris Grayling only visited his GP at his wife’s
insistence. Tests revealed an 11cm growth in his bowel.
Initially, Chris was told he would require a major operation that would
have left him with a colostomy bag and an altered life.
Thanks to the advanced capabilities of Speedboat Inject and the
world-leading complex polyp service it has facilitated at NHS East Kent
Hospitals Trust, Chris’s lesion was removed endoscopically, en-bloc and
with no pain to the patient. He left the hospital the following morning
and was back in the gym in no time. Histology showed the procedure
to be curative.
“ They said, a few years ago I would have ended
up with a colostomy bag for six months to a year.
If that was the option to keep me alive I would
have taken it, but now I feel like I’ve got off
virtually scot-free.
One of my closest friends died of bowel cancer
and that made me so frightened. I can’t thank
the team enough for everything they have done.
They were brilliant and I owe them my life.”
Chris Grayling is one of well over a thousand patients all over the world
to have already felt the benefits of Creo’s Advanced Energy Technology.
Anything is Possible
with the Right Approach
33
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Case by Case
Device usage has grown
quickly from multiple cases
being performed daily on
a global basis
35
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Healthcare
Providers
37
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Transforming Patient Pathways
Healthcare Providers
The combination of our intelligent
advanced energy technology and
our expanded Pioneer Clinical
Education Programme enables our
customers from around the world
to change patient pathways.
An endoscopist can treat up to four to five patients a day
under sedation with Speedboat Inject.
With both the prevalence of complex polyps and waiting
lists across the world growing, this is an attractive
solution not just to hospitals and health boards but to
bodies such as NHS Supply Chain, who are actively
engaged with us.
Because of the benefits to both patients and healthcare providers, doctors are beginning to be incentivised to perform
SSD by payers of care, with tariffs of hundreds of pounds or more per procedure not uncommon in the NHS. As SSD becomes
more common, so too does the increase in demand from the hospital, further facilitating a change in patient pathway.
* Cost-effectiveness analysis of Speedboat submucosal dissection in the management of large non-pedunculated colorectal polyps,
based on 50 patients. Authors: Amir Ansaripour, Mehdi Javanbakht, Adam Reynolds, Zacharias Tsiamoulos. Data on file.
Current Patient Treatment
Pathways—Why Speedboat
Submucosal Dissection (“SSD”)?
Current patient treatment pathways
Surgery
Endoscopic Mucosal
Resection (“EMR”)
Endoscopic Submucosal
Dissection (“ESD”)
▶ Up to 30cm of bowel removed
and sections re-joined
▶ Change to the patient’s anatomy
▶ Potential stoma bag for months,
even life in some cases
▶ Approximately four hours
of treatment under general
anaesthetic with associated
risks (e.g. infection)
▶ Up to five days hospital stay
▶ Follow up treatment required
▶ EMR has become the industry
standard from removing small,
non-cancerous complex polyps
in the colon endoscopically
▶ Lesions can be removed en-bloc
using monopolar devices in a
procedure commonly referred to
as ESD
▶ It does so by snaring and ripping
complex polyps from the colon—
bit by bit or ‘piecemeal’
▶ This does not achieve an en-bloc
resection, making follow ups
a necessity and preventing a
curative outcome
▶ High chance of re-occurrence,
with associated need for further
future procedures
▶ ESD traditionally has a long
learning curve (with doctors often
spending up to six months
in Japan to train)
▶ Using monopolar energy
requires the body to complete
the Radiofrequency circuit—with
energy passing though the patient
at every use
▶ This requires high volumes of
energy which can cause issues
with precision and spread, and can
cause complications
▶ Because of the distribution of
energy, monopolar devices can
often result in charring of the tissue
or perforation into the muscle layer,
with associated complications
Why SSD?
Speedboat Submucosal Dissection (“SSD”)
▶ Provides intelligent, controlled and precise distribution of energy using less power to greater effect—
minimising the chances of perforation, charring and other unwanted outcomes
▶ Offers a curative outcome, with typically no follow up procedures required
▶ Changes a patient’s pathway from surgical to day care—freeing up surgeons and doctors
▶ Significant time and cost savings to the provider of care
▶ Creo Medical’s Pioneer training programme has demonstrated the potential to teach non ESD trained
doctors to perform SSD in a weekend, with a short period of case mentioning to ensure optimal use
39
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Pioneer Clinical Education Programme
Training—Growth of the
Pioneer Programme
With a pipeline of experts wanting to be part of the
Creo journey, we have significantly increased our
training capacity post-pandemic.
▶ Fourfold increase in doctors trained since 2021
Continued Growth Plan
▶ The Pioneer Clinical Education Programme is becoming
recognised globally as a world-class programme
Global experts providing training all over the world
Creo Clinical Resources Driving Utilisation
▶ A huge increase in ex-vivo activities, used for better
selection of trainees for higher procedure volumes
following first human case
Ability to run more cost-effective in-vivo training
programmes
▶ Increase in trainers and demand allowing training events
of 10 or more trainees at a time to become the norm, with
cost efficiencies in the per head cost of training and time
away from clinical practices for staff and trainers
▶ Introduction of both multi-national and local training
programmes mean training can be provided in a way
which encourages take up and onward regular use of
the device
▶ Decrease in training costs per user means user
accounts become profitable more quickly
Increase in live training events
▶ Using our expanding group of experienced users, we
have increased live case training events across all
regions with Creo’s core technology
Launch of the Pioneer Online Community
▶ Sharing learning and experience between clinicians,
peer to peer, is the fastest way to educate and accelerate
change of practice within the medical community. The
Pioneer Community gives doctors a closed and secure
way of sharing information on all Creo technology
▶ 2022 was the breakthrough year for establishing our
clinical resources. We have added a Clinical Education
Specialist in all geographies to be able to train, mentor
and accelerate the pathway from trainee to user. This
will continue to grow as we enter further new markets
▶ Wider suite of devices does not require such an
intensive level of training as those to date so it will be
easier, faster and more cost effective to train users on
these devices
▶ With the pipeline of clinicians increasing due to brand
awareness, device optimisation and the introduction
of new territories, Creo now has the ability to provide
bespoke training to ESD or EMR trained doctors based
on background and skillset
Adoption and Outcomes
▶ New users are being added each week with multiple
cases daily on a global basis, the rate of adoption and
conversion is increasing
▶ The second Speedboat Inject device in the Speedboat
family of devices. With a ‘slimmer’ profile, the device is
compatible with endoscopes with a working channel of
3.2mm or greater and enables endoscopists to address
more indications in patients where narrower and
more flexible devices are required over the original
Speedboat Inject
▶ We have attracted some of the world’s finest
endoscopists as early adopters and key opinion
leaders of our devices
41
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Healthcare Economics
Adoption & Outcomes
East Kent Complex Polyp Service
The first of its kind globally showing
excellent results.
Patient
Nurse
Clinician
NHS Clinical Coder
East Kent Complex Polyp Service
Data
Complex polyp service facilitated by Speedboat Inject
and SSD. It has changed the patient pathway from one of
surgical intervention to minimally invasive day care with
better outcomes for the patient, the clinical team and the
hospital.
With Speedboat’s regular users now having treated
a statistically significant number of patients, we are
beginning to see clinical papers and data make the case
for Speedboat Inject. We anticipate this accelerating
sharply in the first half of 2023 given the data-sets now
available to clinicians and this will only help increase the
take up of Speedboat amongst Healthcare Providers.
Speedboat Submucosal Dissection
(“SSD”) Procedure—the alternative,
impact and savings
The Alternative, Clinical Impact & Health
Economic Data
▶ Alternative is for up to 30cm of bowel removed and the
two sections re-joined
• Change to the patient’s anatomy
• Potential stoma bag for up to six months or
even life
• Other associated effects such as depression
▶ Between three to four hours of treatment under
general anaesthetic with associated risks
▶ Up to five days’ hospital stay
▶ In one day, four to five patients can be treated under
sedation with Speedboat
• Savings of over £10k per procedure
• So in one day can save NHS: £40,000 – £50,000 of
cost; 16-20 hours of operating theatre time and up
to 20 to 25 inpatient days
▶ Actual savings based on an independent case series
of 60 patients and episode data validated at £10,400
(c.50%)
▶ Cumulative NHS savings by end of 2022 forecast to be
over £2.5m
▶ The potential NHS savings would amount to c.£180m
per year*
▶ NICE accreditation submission targeted in late 2022 /
early 2023
DATA STUDY
Cost effectiveness analysis of Speedboat
Submucosal Dissection
Data gathered under a joint study with the NHS validates
potential healthcare benefits and clinical opportunity for
Speedboat technology.
KEY FINDINGS
Up to £10,000 saving
per procedure, double that of originally
thought. The potential NHS savings
could amount to c.£180m per annum.
Faster Diagnosis
as tumour/lesion can be removed
during initial investigation rather than
during surgery.
Improved Patient Outcomes
as shorter procedure and recovery times
allow patients to leave the hospital on the
same day.
Reduced Risk
as patients would ordinarily have up to
30cm of bowel removed under traditional
surgery with associated risk of complication.
Life changing
as patients can typically require a
temporary or permanent ostomy with
stoma bag following traditional surgery.
43
Scan the QR code to
watch the full interview.
* based on the The 2020 National Bowel Cancer Audit
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Rapid Clinical Adoption
Petah Tikva
Israel
Israel’s Rapid Speedboat Adoption
Distribution model enables seven
hospitals across Israel to adopt
Speedboat Inject in record time.
Creo Medical’s unique advanced energy CROMA platform
and associated Speedboat Inject device are now in
everyday use across the world, with direct sales, clinical
education and support structures having ensured a
bespoke pathway to adoption for each individual user
and hospital.
In Israel, by combining with the strengths of local
distributor Tradis Gat, a more streamlined approach is
proving hugely successful.
The distributor
Upon the relaxation of international COVID19 restrictions,
Creo Medical identified Israel as being a target market,
well placed to quickly benefit from Speedboat Inject, with
the device having gained FDA clearance for both upper
and lower GI procedures.
In Tradis Gat, Creo found a well-established distribution
partner with an excellent reputation across Israel who
also shares Creo’s drive and ambition to put the most
advanced technology in the hands of skilled doctors to
help transform lives.
“ Besides its impact on patient care, Speedboat
Inject is unique in that it empowers these
professionals to handle complex situations
more effectively and thus, completely change
the role of Advanced Endoscopy.
It is rare to see a medical device make such
an impact as Speedboat Inject, and we look
forward to maximising its opportunities with
Creo Medical’s great team.”
—Alon Gat, Managing Director, Tradis Gat Ltd
The key to the Israel model has been selecting the right
distribution partner for the market and ensuring that Creo
Medical’s customers were trained as a team.
For this to be successful the distributor, supported by Creo
Medical, ensure early engagement at both a business and
clinical level to ensure Speedboat Inject is the right fit and
to establish a bespoke training and mentoring plan before
gaining commitment to attend Creo Medical’s global
Pioneer Clinical Education Programme.
45
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Rapid Clinical Adoption
New user Dr Sergei Vosko
removed a GIST using
Creo’s Speedboat Inject
for the first time anywhere
in the world.
September 2021
March 2022
May & June 2022
July 2022
August 2022
November 2022
Identified regional distributor, Tradis
Gat, and agreed distribution model.
Commercial agreement signed on
10th September.
Four Israeli physicians attend
Pioneer Training event in Spain.
Dr. Sergei Vosko performs first
human case on 1st of May.
Three further physicians perform
their first human cases.
“ There’s nothing like watching our team return
from a Speedboat Inject case with such a spark
and thrill. We’re riding an opportunity wave with
this unique device. We have built a network of
driven, passionate, and eager professionals
who are standing in line to be able to steer
Speedboat Inject.”
— Guy Dar, Tradis Gat Ltd
Distributor began to lead on training,
with support from Creo. Allows for
more doctors trained and more
procedures through localised training
and alignment of training and first
cases.
Multiple physicians now performing
multiple cases with several more
planned.
World’s first GIST (Gastro Intestinal
Stromal Tumour) SSD removal
procedure performed at Assaf
Harofeh Medical Center by Dr. Sergei
Vosko using Speedboat Inject device.
Four more physicians trained in
Cambridge. From the Clalit group—
no.1 private hospital group in Israel.
Eight doctors and counting from
hospitals across Israel trained on
Speedboat Inject, all with cases
either completed or scheduled
and with more in the pipeline.
47
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Multi-User Site
Houston, Texas
United States
Baylor College of Medicine:
Multi doctor site. More cases.
More users.
Baylor College of Medicine is a world-renowned medical
institution and academic centre in Houston, Texas, US.
Dr. Mohamed Othman is Professor of Medicine there, and
has quickly become one of Speedboat’s biggest users
following his first case with the Speedboat Inject device
in April 2021. Dr. Othman also has more than 80
publications and book chapters in the field of
pancreaticobiliary disorders and advanced endoscopy.
2021—with Dr Jawaid soon completing upwards of 40
cases with Speedboat Inject (POEM and lower GI SSD)
since then.
Having both now performed live educational cases using
Speedboat Inject at both US and international endoscopy
events, Dr. Othman and Dr. Jawaid are now completing
Randomised Controlled Trials using the device as the data
mounts on its impact.
He uses advanced energy and the Speedboat Inject
device to perform both POEM procedures in the upper
GI tract and SSD in the lower GI tract, quickly completing
more than 75 procedures as it rapidly became clear that
the patient outcomes, caseloads and economic benefits
of using Speedboat Inject merited a second doctor being
able to offer the benefits facilitated by the technology.
The positive impact of Speedboat Inject and CROMA’s
advanced energy on the endoscopy programme at Baylor
means that a third doctor, Dr. Kehanian, is now undergoing
training to further widen the pool of doctors able to offer
third space endoscopy procedures, with a second CROMA
platform recently purchased to ensure that cases can be
completed simultaneously where the need arises.
Dr. Othman was part of the team who trained Dr. Jawaid,
Assistant Professor—Advanced Endoscopy at Baylor
College of Medicine, prior to his first case in October
“ I learned it quickly with great mentors from the Creo Medical Group, as
well as Dr. Othman. It feels like better technology. It feels like more precise
technology. More focused energy with less waste resulting in better
patient outcomes. We just have to prove the benefits over time, and I think
we’re at that stage now from a research perspective. It’s very exciting.”
—Dr. Jawaid*
* Taken from our recent webinar
—scan the QR code to watch.
49
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Early Adoption
Bangkok
Thailand
Thailand—KOLs and first
rate facilities supporting early
Speedboat Inject adoption
King Chulalongkorn Memorial Hospital is one of the
two King’s Hospitals in Thailand and the second largest
university affiliated teaching hospital in the country.
After successfully identifying and partnering Meditop
Co. Ltd. as Creo’s distributor for Thailand, both parties
combined to successfully run the first Thai Speedboat
Inject training lab at King Chulalongkorn Memorial
Hospital on April 26, 2022.
Six skilled local doctors joined Creo’s clinical specialists
and two existing Speedboat Inject users: from the UK and
India to complete a successful one-day training course
at the world-renowned Chula Soft Cadaver Surgical
Training Center.
The trainee doctors took quickly to Speedboat Inject and
were impressed by Creo’s advanced energy application
from the onset of training.
Prof Pradermchai Kongkam, Director of the GI Endoscopy
Center at Chulalongkorn Hospital, and a highly regarded
expert in ERCP/EUS across the Asia Pacific region, was
so impressed by Creo’s new technology that he then went
immediately to treating human patients using Speedboat
Inject in the two days following training—his first SSD
(or Rectal ESD of any kind).
In fact, three out of the total six trained doctors at
Chulalongkorn Hospital were able to immediately use
Speedboat Inject for live cases, a real testament to the
technology, the success of the improved, localised Pioneer
Clinical Education Programme and the facilities available
to Creo Medical in APAC. It also highlighted the volume of
potential cases quickly treatable by Speedboat Inject in
the region.
Following another successful local training lab in July,
Creo organised our first multi-national APAC training lab
in September to engage regional doctors from Thailand,
India, Malaysia and the Philippines in collaboration with
Prof Pradermchai to accelerate the adoption of Speedboat
Inject in the respective markets.
In addition, the hospital will soon be made an APAC
regional Centre of Excellence, collaborating with Prof
Pradermchai Kongkam and others not only on the wider
use of Speedboat Inject but also further Creo products as
they make their journey towards commercialisation and
adoption in the region.
“ We are extremely pleased with the success
of our training labs in Thailand’s King
Chulalongkorn Memorial Hospital and how
they, in conjunction with our technology,
have facilitated quick adoption by numerous
Thai doctors.
“ We are also delighted with the reaction we
have had from regional KOLs, which has not
only cemented our presence in Thailand but
also allowed us to quickly make inroads into
lucrative markets such as India.
“ With our technology easily compatible with
the high volume of experienced ESD doctors
practising in Asia, we look forward to building
on our early successes across the region.”
—Tom Kwan, President APAC
51
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Kamaptive
Technology™
53
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Transforming Energy
Kamaptive™—Creo’s
Proprietary Platform
Intelligent Energy
with Safety at Heart
CROMA
Kamaptive technology’s architecture allows multiple
Creo development teams to design, test and build
innovative devices independently whilst functioning
with the CROMA platform without complex software
changes or menu options for users.
Miniaturised
Creo Medical has been working to adapt Kamaptive
Technology to miniaturised hand-held devices for
heightened accuracy and control. The intuitive
intelligence of the interface allows for the platform
to be versatile and resilient in scale and function.
What is Kamaptive Technology?
Kamaptive is Creo Medical’s proprietary intelligent energy
technology, found at the heart of all Kamaptive enabled
advanced energy platforms and devices.
Kamaptive represents seamless and empowering access
to next level, game-changing patient outcomes, through
use of full spectrum energy in surgical, medical and
therapeutic applications.
New Possibilities
Kamaptive’s full spectrum adaptive technology
allows for partnership opportunities in new and
innovative fields from robotics to laparoscopy.
Kamaptive Technology intuitively adapts to the
specific tool in use, self provisioning and intelligently
enhancing the settings of the CROMA platform
for the purpose of the device being used.
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Kamaptive Technology
Kamaptive Partnerships
Creo’s Kamaptive Licensing Programme sees the
Company partner with selected industry leaders in
lucrative, growing markets.
It provides Creo with a path to high margin, long term and
repeat revenue, maximising the potential of our technology
where it exists and where we wouldn’t be able to get to
ourselves e.g by partnering with robotics giants.
Kamaptive Licensing Programme will look to partners
to fund the development, optimisation or customisation
of technology in relation to their needs and that of their
industry. This reduces the R&D burden on Creo Medical
going forward whilst allowing us to continue to innovate.
“ Technological advancements
are facilitating a paradigm
shift in the way many surgical
procedures are delivered.“
—Craig Gulliford, CEO Creo Medical
KAMAPTIVE COLLABORATION AGREEMENTS
Creo technology to be adapted
for use with robotic-assisted
surgical platforms
Intuitive
CMR Surgical
▶ CMR’s next-generation surgical robot, Versius®,
is a significant new entrant into the robotic
surgery space, performing laparoscopic
procedures worldwide across a range of
specialties
▶ A non-exclusive Intellectual Property Licence
and Royalty Agreement has been made to
integrate certain aspects of Creo’s technology
with Versius®
▶ Multi-year collaboration agreement with
Intuitive—a global technology leader in minimally
invasive care and the pioneer of robotic-assisted
surgery
▶ Agreement will see optimisation of certain Creo
products to be compatible with Intuitive’s state of
the art robotic technology
▶ Agreement also provides a framework to allow
joint clinical studies to be undertaken and
includes a number of milestone payments to be
made to Creo
▶ Future royalty structures have been agreed which
will apply when products are commercialised
▶ First revenues from Kamaptive Licensing
Programme received in H1-22 with further
revenue in H2-22 and 2023
Source: https://cmrsurgical.com/press-kit
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Core Technology
59
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Intelligent Technology
Technology Review
Creo Medical harnesses latest advances in Microwave
and Radiofrequency technology and innovative thinking to
improve patient care. We have world-leading technology
developed and optimised by experts in their field—pushing
the boundaries of science and engineering to revolutionise
the way patients are treated.
Creo founder and CTO Professor Chris Hancock gives a run
through of what makes Creo’s intelligent technology so unique.
World-leading Components
Our CROMA generator and associated miniature flexible
instruments bring together the latest advances in material
science, semiconductor Microwave power generation
in miniature packages, high voltage fast switching RF
transistors, low loss Microwave transmission lines and
over 500 years of know how from our engineering
team, working harmoniously with exceptional outcomes.
Take the antennas and amplifiers we use as an
example, manufactured uniquely and specifically by
ABER Electronics, now part of the Creo Medical umbrella.
The advanced antennas we use and the way we use
them are just one example of how high-quality, cutting-
edge components work together to make our products
unparalleled and irreplicable.
Hand-picked Talent
Creo has a mixture of some of the most respected
engineering talent in the UK. From global
telecommunications experts and experts in military
antenna and RADAR design to signal processing
specialists and young Microwave focused PhD
students, their brilliance is at the very heart of our ‘anything
is possible with the right approach’ mantra.
This approach is further enhanced by our collaboration
with some of the most respected clinicians and key
opinion leaders in the world, talented physicians who are
passionate about delivering the best possible outcomes
for their patients and who support Creo Medical across
all aspects of product development, uptake, training and
PROF. CHRIS HANCOCK , CTO
evaluation. It’s a key part of ensuring that the products that
come to market are optimised for clinical use and the best
patient outcomes. The fact that they are excited by what
we are delivering and what’s around the corner speaks
volumes.
Add to that the range of specialists Creo now has, having
expanded the business, from manufacturing to marketing,
and it’s clear that what we now have is the right talent in
the right places to turn this technology into an attractive,
all-round package for the user.
Intellectual Property
Our aggressive, wide-ranging patenting strategy is now
also paying dividends through the Kamaptive Licensing
Partnerships expanding our presence in new clinical
specialties to provide better outcomes for more clinical
indications. These Licensing Partnerships illustrate the
importance of protecting and leveraging for the continued
prosperity of the business. Any potential competitor
that has attempted to enter our space has been blocked
through our IP development strategy to file claims for new
inventions at the prototype and ideation stages.
During 2022 we continued this strategy and pressed
ahead with different applications for our advanced energy,
whether that be endoscopically, laparoscopically, in robotic
surgery or elsewhere. A total of 15 patents were filed
over the year to protect our advanced sensing as well as
multi-modal energy delivery systems; this is 25% more
than in 2021 and includes a handful directed to numerous
developments for a new vessel sealer instrument and
inventions relating to detecting optimal tissue seals
among others.
When I founded the Company all those years ago, I could
never have envisaged the multiple markets we might
enter. Thanks to a combination of tech, talent and our
comprehensive patenting strategy we are making
the treatment of more and more indications possible
and achievable.
Realising our Potential
During 2022 we optimised existing devices, allowing
physicians a pathway for broader indications, the
development of future devices and the rapid progress in
the potential for our technology to help treat patients in
laparoscopic and robotic surgery.
Packing the optimal capability, functionality and
effectiveness into devices the size of a grain of rice is not
easy, but we are doing it and are excited about what more
we are delivering in our R&D and engineering departments.
We know the cases are mounting and with it the clinical
data. That will be what proves that what we have is
better, more effective and will open up our technology to
transform further lives. I think 2023 will be the year we
really see that data coming to the fore.
Elsewhere we are in the final stages of work on the next
iteration of our CROMA platform, with future exciting
enhanced delivery modalities such as tissue sensing also
being developed. We’ve quickly taken vessel sealing tech
from a concept to a working prototype and are excited
about the potential opportunities for it and we’ve a number
of further ongoing projects which I’m hopeful we can
update on in the near future.
I’m also heartened by Microwave ablation becoming more
commonplace in the mix of treatments for cancers. The
risks associated with percutaneous treatment (e.g. for
treatment in the lung where there are well established
risks of hemothorax and pneumothorax) further validates
the potential for our focused, advanced energy technology
which we are very excited about seeing the results for.
Powered by Kamaptive Technology—Seamless, intuitive integration
of multi-modal energy sources, optimised for Dissection, Resection,
Coagulation and Ablation
▶ Closed loop multi-modal
real time tissue feedback
automating adaptive
energy delivery specific
to patient/tissue needs
▶ Automatic device
recognition and
provisioning of energy
settings for specific
device needs
▶ Simultaneous delivery
of energy sources to
create new tissue effects
and improving patient
outcomes
▶ Bipolar Radio Frequency
and controlled high-
frequency Microwave
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements CFO’s Review
A year of significant
financial progress
“ First revenues from our Kamaptive
Licensing Programme in the year along
with growth in sales of our CROMA and
Speedboat Inject device”
—Richard Rees, Chief Financial Officer
I am pleased to announce our sixth Annual Report and
accounts since our IPO on AIM in 2016. We have seen the
first revenues from our Kamaptive Licensing Programme
in the year along with growth in sales of our CROMA and
Speedboat Inject device. These revenues along with cost
savings and operational efficiencies have reduced the
underlying EBITDA loss year on year. The fund raise of
£33.7m (before expenses) in Q1 2023 provides us with the
platform to achieve positive underlying EBITDA by 2025.
£24.9m was generated through consumable sales in
Creo Europe. Other operating income of £0.1m in the
12-month period to 31 December 2022 (2021: £0.1m) relates
to research grants.
Gross Margin
Gross margin improved from 46.0% in 2021 to 48.3% in 2022
driven by an increase in margin from consumable sales from
46.3% in 2021 to 48.0% in 2022.
Revenue and other income
Operating loss
The Group has made significant progress in establishing
sales channels through new products as well as the
development of our commercial footprint with our
Kamaptive Licensing Programme seeing its first revenues
and additional Heads of Terms signed with new partners.
Our European operations have continued to be cash
generative to the business and we are starting to see
growing sales through broader direct and indirect sales
channels for CREO across our large portfolio of products.
Revenues billed in the year in relation to Speedboat
Inject and CROMA increased to £0.9m (2021: £0.3m)
and Kamaptive licensing revenues of £1.4m (2021: nil).
The operating loss for the year increased to £30.8m (2021:
£29.9m), reflecting a full year of additional heads recruited
towards the end of 2021, to support the increased operational
growth and completion of key R&D projects. The underlying
operating loss for the year was £20.8m (2021: £20.0m).
The underlying EBITDA loss for the year was £22.1m (2021:
£22.6m). Operating expenses peaked during the year as we
completed key R&D projects and invested in our operational
capacity and operational resources. In the second half of the
year we saw these costs reduce against H1-22 by 5%, a trend
we expect to continue into 2023 and we have already seen
evidence of this in Q1-23 management numbers.
All Figures �’000
12 MONTHS TO
31 DECEMBER 2022
12 MONTHS TO
31 DECEMBER 2021
Revenue
Cost of Sales
Gross Profit
Other Operating Income
Administrative Expenses
27,169
(14,047)
13,122
51
(43,929)
25,161
(13,576)
11,585
52
(41,544)
OPERATING LOSS (statutory measure)
(30,756)
(29,907)
SIP Charge
Earnout
Depreciation & Amortisation
R&D expenditure recovered via tax credit scheme
119
933
3,112
4,507
–
500
2,562
4,299
UNDERLYING EBITDA (non-statutory measure)
(22,084)
(22,546)
Share-based payments
1,279
2,564
UNDERLYING OPERATING LOSS (non-statutory measure)
(20,805)
(19,982)
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), 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.
A deferred tax asset has been recognised in respect of
the business combination relating to our Creo Europe
subsidiaries. A £0.75m deferred tax asset has been
recognised in respect of tax losses in Creo Medical Limited
which we will utilise through Group relief of the future
profits in Creo Medical UK Limited. No further tax assets
in relation to these losses have been recognised due to the
uncertainty over the timing of future recoverability.
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts CFO’s Review…continued
Expenses
Dividend
Administrative expenses totalled £43.9m for the year (2021:
£41.5m). The increase was largely driven by headcount
costs which increased to £22.9m for the year from £20.5m
in 2021 due to an increase in employees at the end of Q4-
21. Non employment R&D costs were £6.9m in the year
(2021: £7.3m) due to the completion of key R&D projects
and a move towards funded R&D projects such as the
Intuitive agreement, offset by increase in Patent costs.
Sales and marketing costs were £3.8m (2021: £3.2m) driven
by increased travel compared to 2021 due to COVID-19
restrictions as well as costs associated with growing our
Core Technology sales.
General and Administrative expenses were £5.1m (2021:
£5.0m) with our facility and utility costs all increased due to
inflationary pressures. Non-cash expenses comprising of
SIP charge, earnout expenses, sharebased payments and
depreciation and amortisation were £5.2m (2021: £5.5m).
Adjusting for these our underlying admin expenses were
£38.8m (2021: £35.8m).
In the second half of the year we saw these underlying
administrative costs reduce against H1-22 by 5% a trend
we expect to continue into 2023 and we have already seen
evidence in Q1-23 in management numbers reported. This
was following a restructuring of the R&D teams as we
move to the next phase of commercial development with
the completion of many projects in 2022.
No dividend has been proposed for the year to
31 December 2022 (2021: £nil).
Cash Flow and Balance Sheet
Net cash used in operating activities was £25.0m (2021:
£26.0m), driven by the increased investment in operational
capacity, focusing on commercial activities and initial cash
outlay for Endotherapy consumable products in the US and
Europe. Net cash used in investing activities was £6.0m
(2021: £7.8m) driven by the investments in new facilities for
our UK headquarters and deferred and contingent payments
made for previous acquisitions. Cash generated from
financing activities was £0.5m during the year.
Total assets at the end of the year decreased to £75.3m
(31 December 2021: £100.6m), a 25% decrease, reflecting
the reduction in cash from operations for the year.
Cash and cash equivalents at 31 December 2022 was
£13.1m (31 December 2021: £43.5m). Net assets were
£49.4m (31 December 2021: £73.3m), a 33% decrease due
to operating loss and share based payment expense.
Post balance sheet event
We raised £33.7m (before expenses) through an
oversubscribed fundraise in March 2023 which enables
Creo to push commercialisation of the suite of products
and move to break even and being self-cash sustaining
within the near future.
Loss Per Share
Loss per share was 15 pence (2021: 15 pence).
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 year and are described
on pages 130 to 131.
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 our sustainability report on pages 70
to 85). 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 on pages 66 to 69.
Directors
Details of the Directors who served during the year ending
31 December 2022 are set out on pages 90 to 93. Six of the
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 situations or transactional conflicts 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.
On behalf of the Board
Richard Rees
Director
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Risk Management
Principal Risks and
Uncertainties
Risk Management Process
The ability to identify, manage and mitigate risks is integral to any business achieving its objectives and fulfilling its
strategy. Creo’s risk management process adopts a bottom-up approach to identifying risks and reporting them to
both the Audit Committee and, ultimately, the Board. The Board then reviews and assess the risks identified and the
risk appetite for the Group which, in turn, provides department heads feedback and guidance on those key risks to
focus on and address as a priority.
Risk Committee
Creo’s Risk Committee is a non-Board committee made
up of department heads. The Risk Committee meets
formally each quarter. Each member is responsible
for the identification, monitoring and mitigation of the
risks within their respective departments with guidance
provided by the Board. Risks are reviewed by the Risk
Committee and challenged by other heads of department
as to the impact and probability ratings.
Our Risk Appetite
The Board is responsible for determining the Group’s
risk appetite alongside its business and sustainability
strategy. This includes identifying risks and opportunities
across the Group. The risk appetite helps to determine
those salient risks requiring the most attention and effort
to mitigate or to which additional resource is allocated.
We have determined the following risk appetites for the
current period:
During the reporting period, the appetite for operational
risk has reduced from high to medium. This reflects the
work undertaken over the last 12 months to hone Creo’s
operations and internal processes and the increased
impact operations has on the business.
We recognise that the risks are different when achieving
commercial traction in Europe, the US and APAC and each
bring their own challenges and risk profiles. We therefore
have input from the commercial heads in each region
in relation to the risks to ensure we have appropriately
identified, recognised and mitigated the key risks.
As we continue to scale operations to head towards
profitability the risks will change and the business will
continue to evaluate these risks to ensure new risks which
have not previously been identified will be captured and
risks likelihood and impacts which might have become
significant. As part of this we have appointed a Chief
Operating Officer to oversee operations across the entire
group and manage these risks.
Risk Reporting Process
Risk Tolerance
Principal Risks
Appetite Rationale
Review of key risks to the business and progress against risk appetite.
Communicate risk appetite to rest of business
Board
RISK
APPETITE
Review of central risk register, process and
progress against risk appetite targets
Audit Committee
Identification of risks recorded in risk register, mitigations
and update of impact/probability of risk
Risk Committee
MODERATE
Barriers to sustain
the market, Business
Disruption Risks,
Geopolitical Risks
As a medical device company, we develop solutions that
tackle unsolved problems, often by applying new technology.
The technology risk we assume takes into consideration
our stakeholders’ interests and is commensurate with the
potential returns from our product pipeline and intellectual
property’s assets.
The Group has a measured approach to projects and
acquisitions and will take an appropriate level of risk
commensurate with the potential returns and availability
of capital.
Operational Risks,
Executive and personnel
Risks, Financial and going
concern, IT and Cyber
Security, Environmental
The nature of our business means that we are exposed to
operational and climatic risks that are beyond our influence
but where possible, we take steps to mitigate the impact of
these risks on the business.
The Group recognises the importance of its supply chain and
seeks to minimise risks within its supply chain which would
compromise quality and service for its customer.
Breach of legal and
regulatory requirements,
Product Liability Risks
Creo operates in the healthcare sector which is highly
regulated, where patient welfare is paramount. The Company
has a very low tolerance to risks of breaching legal, regulatory
or ethical standards or anything which could negatively impact
on our people’s health, safety and wellbeing, the communities
where we are present, our reputation or that of our customers.
67
REPORTING
LOW
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Risk Management…continued
The table below sets out those principal risks and uncertainties which, in the Directors’ opinion, are most relevant to the
Group. We have shown the movement of impact and probability of each risk against the risk reported in the previous year.
Whilst the business puts in place mitigations to reduce the probability of any risk arising and the impacts of any such risks,
it is not possible to remove all risk. Further, additional factors could affect the likelihood or impact of risks as the business
progresses on its commercialisation journey; for example an increase in revenue may increase impact; or increased product
sales may result in product liability risks become inherently more probable and thus having a greater impact on the business.
Principal Risk and Impact
How we manage the risk
Probability
movement
Impact
movement
Barriers to the market
▶ Engagement with KOLs and clinicians through
Risk our products do not meet the
necessary regulatory requirements for
the market, are not competitively priced,
do not provide value over competitor
products.
Risk that our technology becomes
outdated or superseded by a competitor.
Breach of legal and regulatory
requirements
Risk that the Group breaches legal
or regulatory requirements in local
jurisdictions which could result in fines,
penalties and damage to the Creo brand.
local industry and through our Clinical Education
Programmes.
▶ Benchmarking prices of products in local markets.
▶ Extensive IP portfolio to protect our core technology in
the market.
▶ Clear marketing strategy targeting individual markets.
▶ Development of our Kamaptive Technology, our suite
of compatible devices and our Kamaptive Licensing
Programme.
▶ Our Quality Assurance and Regulatory Assurance
Team is focused on the regulatory needs for product
development and develops quality documentation to
support all regulatory applications.
▶ We have CE marking for six of our devices as well
as our CROMA platform, and FDA clearance for
Speedboat Inject, MicroBlate Fine, MicroBlate Flex
and SlypSeal Flex devices in addition to the CROMA
platform.
▶ Work with local advisors to keep abreast of the
development of regulations and requirements.
Operational Risks
▶ Chief Operating Officer* appointed to oversee all
Risk that Creo is impacted by supply chain
issues, manufacturing delays or lack of
manufacturing capacity, product defects,
supplier dependence.
operations across the Group.
▶ Preventative maintenance plan to ensure out products
are calibrated and maintained, both before and once
they enter the market.
▶ Strategic purchasing of key components and careful
monitoring of resource requirements.
▶ Review of at risk suppliers and alternatives identified to
ensure minimal disruption if supply chain issues arose.
▶ We have an outsourcing partner ready if demand
required additional manufacturing capacity.
IT and Cyber Security Risks
▶ Remote servers across multiple sites reducing reliance
The risk of industrial hacking for sensitive
information and/or with the intention of
deliberate malice resulting in disruption to
the business.
In the event of a data breach the Group
may be liable to be fined for a breach of
relevant data protection legislation.
* Non-Board appointment
on a single site.
▶ VPN across the business
▶ Key application being migrated to the Cloud.
▶ Cyber security awareness training implemented across
all entities.
Executive and Personnel Risks
▶ Appraisal process set up to maximise employees’
Risk of over-dependence on key staff
and executives.
Risk that we cannot recruit the right talent
necessary for the Group to achieve its
objectives.
Product Liability Risks
Criminal or civil proceedings might be
filed against the Group by study subjects,
patients, the regulatory authorities, other
companies and any other third party using
or marketing our products.
Business Disruption Risks
Brexit may cause issues with supply chain,
increase export and import prices, cause
delays in selling/ purchasing goods.
COVID19 or similar pandemic disruption
to business stopping us manufacture, sell
and operate as usual.
Financial and Going
Concern Risks
Risk that the Company does not have
sufficient cashflow to meet its liabilities
and is no longer a going concern.
Risk that we do not have sufficient
cashflow to seize opportunities and
projects when they arise.
potential and aid their development.
▶ HR Director overseeing the Group and implementing
processes and policies.
▶ Leadership and management training to empower
management and enhance performance.
▶ Benchmark benefits package across industry roles
to ensure competitive.
▶ Identify points of failure (“PoF”) within the business
if someone were to leave and mitigate these PoF.
▶ By capturing IPR through patent applications,
we are able to ensure ownership of knowledge
and create foundations for our product pipeline.
▶ A number of our products have obtained approvals/
clearance from third-party regulatory bodies in the
EU and US.
▶ Our design process seeks to mitigate issues
by including preclinical and clinical trials in the
development of our products.
▶ We invite input from Key Opinion Leaders on
product development and their needs.
▶ Our QMS system is designed to comply with ISO 13485.
▶ Third party and OEM/OBL products manufactured
to ISO standards with audits undertaken.
▶ The Company property is well secured and
we have taken reasonable steps to protect
the contents.
▶ A disaster recovery plan has been developed.
▶ We monitor developments on an ongoing basis
to allow the business to react when necessary.
▶ The business is continually monitoring local and global
developments, including Brexit, COVID19, the war in
Ukraine as well as the cost of living crisis and assessing
the potential disruption impacts this could have and
mitigating these where possible.
▶ On track with budgeted initial cash requirements.
▶ We work closely with a number of agencies and
bodies to maximise the amount of grant funding that is
available to assist with our technological development
while minimising our spend.
▶ Creo Europe (previously Albyn) is profitable and
generates cash for the business.
▶ We are constantly talking to current and new investors
about our commercial plan and opportunities and the
funds those opportunities would require.
▶ Local and Group budgets are reviewed each month
with a five year forecast every six months to ensure
sufficient cashflow.
The Strategic Report was approved by the Board of Directors on 25 April 2023 and was signed on its behalf by
Richard Rees
Chief Financial Officer
25 April 2023
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Sustainability
Report
CLINICAL CASE STUDIES
Learn more about the benefits of Speedboat
Inject through a number of clinical case studies.
SCAN THE QR CODE TO READ OUR CASE STUDIES
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Sustainability Strategy
Our Mission: To Improve
Patient Outcomes
Creo’s sustainability strategy focuses on three key
areas where we believe we can make the greatest impact,
underpinned by our strong governance framework
and aligned with our overall mission to ‘Improve
Patient Outcomes’.
Healthcare Impacts: Ensuring what we do has a positive
impact on our patients, clinicians and the healthcare
industry through championing innovation and ensuring
quality outcomes.
People and our Communities: ensuring what we do has
a positive impact on our people and communities through
promoting diversity, equality and enhancing opportunities
within the business and wider communities
Our Planet: ensuring that the actions we take as a
business mitigate our environmental impact and work
towards and contribute to global targets
Supporting the following Sustainable Development Goals
Healthcare Impacts
People & Communities Our Planet
KEY FOCUS
▶ Advancing technology in the field
▶ Create a safe, diverse workplace
▶ Achieve net-zero across our
of therapeutic endoscopy
▶ Helping to tackle waiting times
and rising healthcare costs
▶ Enhancing clinician education
and skills
where innovation and
collaboration can thrive
▶ Supporting our communities
and local schools to further
education
Scope 1 & Scope 2 emissions
by 2027
▶ Achieve net-zero over Scope
3 emissions by 2035
▶ Enhanced sustainability
reporting and communication
OUR PROGRESS
▶ £10k savings per procedure
in NHS
▶ Kamaptive pioneering technology
opening up new treatment
pathways using advanced energy
▶ Quality training which goes
above and beyond the industry
standard
▶ Investment in new office
facilities in UK and Spain
▶ Appraisal & wellbeing
workshops to maximise
employee opportunity &
mental health
▶ Over seven charity events
attended with over £20k raised
for local good causes
▶ ISO 14001 compliant in three
sites across the Group
▶ 80% of energy comes from
renewable sources
▶ Reporting on Scope 1, 2 and
action plan to capture Scope 3
See more on our goals and progress on
pages 76 to 77.
See more on our goals and progress on
pages 78 to 81.
See more on our goals and progress on
pages 82 to 85.
GOVERNANCE
▶ Healthcare compliance
▶ ISO 13485 compliance
▶ Patient follow up
▶ Anti-bribery, anti-slavery, money
laundering policies and training
▶ Diversity metrics & monitoring
▶ SECR compliance
▶ ISO 14001 compliance
▶ UN Sustainable
Development Goals
▶ Strong Governance Framework — See our corporate governance report on pages 96 to 100.
▶ Sustainability Committee set up to guide, monitor and report on progress against strategy. See pages 74 to 75.
▶ Continuous stakeholder engagement — see our S.172 statement on pages 102 to 105.
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Sustainability Statement Explanation
How we Develop our Plan
In order to create and execute a successful sustainability
strategy it is important to identify those issues that
are most important to Creo, its business and its
stakeholders. In turn, this allows us to focus on those
matters where we have the greatest opportunity to
make an impact and ensure an appropriate governance
framework is in place to achieve the strategy.
To gather insights, we engaged with our key
stakeholders to gain their insight on the issues of
greatest importance for our business and society.
These included:
External stakeholders—we sought insight from our
patients, clinicians, healthcare providers (including
the NHS), suppliers and partners to understand their
views of our biggest risks and the opportunities to drive
greater value.
Our people—we engaged internal experts from across
the business to understand the issues which have the
greatest impact on the delivery of our strategy and those
which are the highest concern for our stakeholders.
What is clear is that Creo has a significant opportunity
to create positive and lasting impacts in the healthcare
sector, for the people Creo works with including local
communities across the globe and to be proactive in the
fight against climate change, minimising the impact we
have on our planet. These formed our three key focus
areas which, along with our strong internal governance
framework, form the basis for our strategy.
Materiality Assessment
We used the Global Reporting Initiative (“GRI”)
recommendations on materiality to ensure that our
process was conducted according to best-practice
reporting standards.
Through this process we identified 21 material issues.
We also combined the results of the materiality exercise
alongside the prioritised issues identified by the UN
Sustainable Development Goals (“SDGs”) to guide the
development and focus of our materiality assessment.
NO.
MATERIAL ISSUES
SUSTAINABILIT Y PILLARS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Supply Chain Management
Healthcare Impacts
Our People & Communities
Our Planet
Governance
Governance, Ethics and Compliance
Data Protection and Cyber Security
Responsible and Transparent Sourcing
Risk Management and Mitigation
Hazardous Materials
Sustainable Logistics and Product Distribution
Ethical Animal Trials
Diversity, Inclusion and Equal Opportunities
Employee Engagement, Attraction and Development
Occupational Health, Safety and Wellbeing
Community Engagement
Accessibility of Products
Clinician Experience and Development
Patient Outcomes
Innovation, Research and Development
Collaboration and Partnerships
Climate Change and Energy Use
Recycling and Waste
S
R
E
D
L
O
H
E
K
A
T
S
O
T
E
C
N
A
T
R
O
P
M
I
15
16
14
18
2
9
5
13
1
10
19
11
3
17
8
20
4
21
6
7
12
20
Product Life Cycle
21
Water Use and Efficiency
IMPORTANCE TO CREO GROUP
75
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Healthcare Impacts
Healthcare Impacts
Our focus on healthcare impacts aligns with the following UN SDGs
Ensuring what we do has a positive impact on our patients,
clinicians and healthcare industry through championing
innovation and ensuring quality outcomes. This was
recognised as an area of specific focus due to the unique
opportunity Creo has to make a positive impact in the
following ways:
Advancing Technology
Everything Creo does has one main aim, to improve patient
outcomes. In order to do this, current treatment pathways
will need to adapt through continued innovation, challenge
and collaboration. We do this through the following ways:
Our products—we are constantly identifying new treatment
pathways for our products such as Speedboat Inject. Since
the introduction of Speedboat Inject we have expanded into
further indications.
As well, we are constantly innovating to make our product
better and more accessible. Our new slimmer Speedboat
Inject device which launched in November 2022 is a perfect
example of this.
Collaborating with others in the industry—sharing our
knowledge and technology with partners allows innovation
within the industry and will help lead to new products and
pathways not yet available. We have currently partnered with
CMR, Intuitive and IQ Endoscopes with the aim of identifying
new technologies and disrupting the market norm.
Being at the forefront of innovation—Creo is constantly at
the forefront of innovation and has been recognised in the
industry as a leader in innovation. Our CTO and founder
Chris Hancock recently won the inaugural Technology
Innovator of the Year Award at European Microwave Week.
Tackling Waiting Lists and Rising
Healthcare Costs
Whilst our mission is to improve patient outcomes, our
technology has been proven to have the potential to reduce
procedure times and remove the need for long hospital
stays. Further, results from our health economics data shows
savings of up to £10,000 per procedure in the NHS. See page
43 for further details.
We are not limiting our benefits to just the NHS or first world
countries, but are actively looking to help ease healthcare
pressures and improve patient outcomes globally. We want
as many people to have access to our technology
as possible.
To achieve this we have supported clinicians to perform
procedures and introduced our technology in a number of
countries including Chile, Ecuador, India and Israel. With
a focus not just on the markets we have a direct presence
in but all across the world, we believe we can make a
significant impact on the pressures faced by healthcare
providers across the globe and help to tackle healthcare
inequality between regions.
Training that goes beyond expectations
Quality is of paramount importance to Creo and the
products and training we provide. As well as complying
with ISO 13485 Medical Devices certification and relevant
healthcare compliance, we strive to provide training and
education long after the clinicians pass the required level
of proficiency.
Our Pioneer Clinical Education Programme champions this
quality and follows users through multiple cases to ensure
the patients receive the best care and we prevent any
avoidable adverse impacts. Follow ups with patients and
clinicians allow us to obtain valuable feedback to enhance
future patient experience and clinician training.
How We Govern
▶ Healthcare compliance
▶ ISO 13485 compliance
▶ Clinical Training Policy
▶ Technology Patents
Scan the QR code
to see more on our
health economics
Case Study:
Speedboat Inject
Thanks to the advanced capabilities of
Speedboat Inject and the world-leading
complex polyp service it has facilitated at
NHS East Kent Hospitals Trust, Chris’ lesion
was removed endoscopically, en-bloc and
with no pain to the patient. He left the hospital
the following morning and was back in the
gym in no time. Histology showed the
procedure to be curative.
Read Chris’ story on page 33
What’s next?
▶ Release latest version of products to expand procedural capability
▶ Develop global accessibility to treatments through market penetration in developing countries
▶ Continue to invest in new treatment pathways
▶ Continue growth in our professional education programme
77
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Our People and Communities
Our People and
Communities
Our focus on our people and communities aligns with the following UN SDGs
Our people are the lifeblood of our business and the
driving force behind the innovative work we do within
the healthcare sector. We are committed to ensuring
our recruitment, talent assessment and development
processes can identify the best people for the roles
irrespective of any personal characteristics.
Creating a safe and inclusive environment
which fosters innovation
We recognise the importance of providing state of the art
facilities and space for our people to collaborate face to
face, share ideas and meet other members of the team.
We have recently expanded our new office in Chepstow
to complement our offices in the US and Singapore, with
state-of-the-art training facilities, collaborative workspaces
and R&D laboratories. This has allowed our employees
to come back to the office post-COVID19 on a flexible
basis and collaborate with other departments fostering
innovation and inclusion within the Creo family.
Online workshops and meetings are held with our
international colleagues on a regular basis to ensure
everyone feels part of the Creo family and that we are
all working towards the same goals.
To ensure a safe and inclusive environment we have the
following policies and workshops in place:
▶ Diversity & Ethical Behaviour Training
▶ Menopause Awareness Workshops
▶ Employee team building days
▶ Equality, Diversity & Inclusion Policy (including respect
for human rights)
▶ Whistleblowing Policy
▶ All hands meetings
We are committed to creating a diverse workforce and
working towards gender parity in senior positions within
the business. We are committed to ensuring that all
disabled persons whether newly hired or who have become
disabled during employment, have appropriate support,
training, career development and promotion opportunities.
Sickness 3% 2022
Employee wellbeing
Employee wellbeing is of paramount importance to Creo,
particularly in light of recent global events such as the
COVID19 pandemic, the war in Ukraine and the cost-of-
living crisis.
Happy and healthy people perform at their best. This is why
we implemented a range of tools to help support
our employees.
▶ Mental Health First Aiders—trained individuals provide
a channel of confidential and non-judgmental support to
employees who may require some assistance or simply
need to chat.
▶ Employee Assistance Programme—employees have
access to our free and confidential online and telephone
support service (Unum LifeWorks). Support topics
include bereavement support, financial wellbeing,
mindfulness, elder care and more.
▶ Beam Development and Training and Awaken
Wellbeing Services—Creo has engaged with a
professional wellbeing coach in order to provide one to
one telephone and online support to employees to help
promote positive wellbeing and avoid burn out.
▶ Wellbeing Sessions—webinars covering a variety
of topics including Menopause in the workplace,
Understanding and managing stress and the importance
of boundaries at home and work. Training has been
provided in locally appropriate language and tailored
content.
As well as the above programmes we have also introduced
Aviva Digicare and Unum Help@hand alongside our
current health services provided. This provides our UK
employees with:
▶ Annual Health Check—a home-based test examines 20
different health markers to help identify problems early,
including diabetes risk, cholesterol status and liver health.
▶ Digital GP—a private doctor service offering our
employees quick access to clinical advice and guidance,
through up to three sessions a year.
▶ Nutritional Consultations—our employees can have
up to six consultations a year with a nutritional expert,
including advice and guidance on delicious healthy
eating plans.
▶ Mental Health Consultations—tailored advice from
mental health professionals if there’s any issue—home or
work related—our employees need to talk over, including
bereavement support. Employees get access to six
Mental Health Consultations a year, with an additional
six bereavement consultations.
▶ Physiotherapy—our employees and their partners can
have up to eight sessions a year between them with a
physiotherapist who will give them bespoke exercises
normally via video consultation.
▶ Second Medical Opinion—helps our employees get two
expert second medical opinions a year and treatment
plan from a UK-based clinician after an initial diagnosis.
These programmes help to keep our staff in the best
condition and help to reduce sickness within the workplace.
Board of Directors
All employees
F E MALE
1
107
MALE
6
177
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Our People and Communities…continued
Challenging & Rewarding Careers
Community Engagement
Accidents per 100,000 hours
2021 0.67 vs. 2022
0.33
Health & Safety
Physical health is also key to ensuring we provide our
colleagues a safe place to work. During the year we have:
▶ Introduced a red tagging exercise
▶ Additional sharps bins for disposals
▶ DSE homeworking assessments
▶ New near miss reporting portal
▶ RoSPA Award
We always strive to get the best out of our employees and
ensure they are reaching their full potential. This year we
have introduced our Appraisal process. Every employee
within the business will have an appraisal where their
strengths and development areas are identified and goals
are set to help them achieve their potential. We have run
appraisal workshops to ensure employees understand
how to get the most out of their appraisals and managers
understand how to set SMART goals.
We keep our employees aware of our success stories with
patients through regular communication to help remind
them of the purpose of the business and difference they
are making to people lives.
Retaining and attracting the best talent is key to achieving
our strategic goals. We offer various employee benefits
including:
▶ Share Incentive Plan
▶ Cycle to work scheme
▶ Income protection
▶ Critical illness cover
▶ Time off for volunteering
▶ Flexible working
▶ Healthcare support
▶ Life Insurance
Employee Voluntary Turnover Ratios
18%
2022
We actively encourage our employees to get involved
in local community projects, volunteering and raising
money for good causes. Some of the projects we have
been involved in this year include:
▶ Tree planting at the local school in Chepstow. Not only
did this help offset carbon in the atmosphere it also
helped our employees engage with the local community,
raising awareness within the community of the work
that Creo is undertaking and the career opportunities
that it can offer.
▶ Majorca Bike Ride—Creo employees took part in an
overseas bike ride to Majorca over 384km to raise funds
for Velindre Cancer Centre.
▶ Dragon Boat Race—32 of our UK colleagues competed
in the Dragon Boat Race based in Bath this year to raise
funds for Designability, a charity which designs and
creates assistive technology and products for people
living with a disability or long term health conditions.
▶ Jiffy50challenge—A team of colleagues completed the
50 mile cycle to help raise funds for Velindre Cancer
Centre and the South West Wales Cancer Fund.
▶ Rhossili Bay Trek—A group of Creo employees
trekked along the coastal path to raise funds for
Bowel Cancer UK.
▶ Creo Medical Europe Charity Dinner—Our European
colleagues joined a Charity Dinner to raise funds for
a local cancer centre based in Spain.
▶ Our Global HR Director attended Dene Magna School
to offer students mock interviews.
▶ Our Chepstow head office hosted a class of students
from a local comprehensive school to show and inspire
them with the work we do and the careers we offer.
421 Total Volunteering Hours
£Thousands
Raised for charities and good causes
How we Govern
▶ Policies and training via our global learning platform:
• Anti-Bribery Policy
• Whistle Blowing Policy
• Money Laundering & Anti Bribery
• Equality & Diversity Policy
▶ Benchmarking pay and benefits to industry standard
▶ Diversity & behaviour in workplace training
▶ Appraisal process
▶ Exit interviews
▶ Analysis of key workforce data including sickness,
leavers, hires, promotions and pay parity
What’s next?
▶ Examining ways to improve employee value proposition
▶ Undertake employee surveys to track scores and
measure progress
▶ Continued community engagement
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Our Planet
Our Planet
Our focus on the environment aligns with the following UN SDGs
UK Emissions1
SCOPE 1
Emissions from facilities2
Emissions from vehicles3
SCOPE 2
METRIC
2022
2021
Tonnes / CO2e
Tonnes / CO2e
15.3
1.3
16.6
8.3
8.3
0.25
1.03
6.3
0.6
6.9
27.1
27.1
0.12
30.79
Purchased Electricity4
Tonnes / CO2e
Energy Consumption5
GWh
Intensity Metric6
Tonnes CO2e / Revenue £m
DISCLOSURE TIMELINE
It is key that we all minimise our impact on the
environment, including Creo and its employees. As a
business we want to ensure that the actions we take
minimise our environmental impact and work towards
and contribute to global targets. We recognise that as our
business grows so will our impact on the planet, however
we also recognise that we have an opportunity to reduce
or mitigate the negative impacts and an opportunity to
create positive impacts along the way.
Our emissions and energy usage
As an evolving business we recognise the challenge
in setting internal targets and want to ensure that
any targets we set we can reliably measure, report on
and actually have a positive impact. Our initial targets
therefore focus on achieving net-carbon neutral by 2027
across our Scope 1 and Scope 2 emissions and net-zero
for Scope 3 emissions by 2035. Further targets will be
implemented as our strategy and data capture evolves.
Scope 1 & Scope 2 Emissions
We have put in place systems and controls to capture our
Scope 1 & Scope 2 emissions and record this data on a
regular basis. Using this data we are able to understand
the impact from a Group perspective. We currently have
data for all UK sites and are close to having data for all
global sites across Europe, the US and APAC regions.
We anticipate having all Scope 1 & Scope 2 data across
all sites by the end of 2023.
Scope 3 Emissions
We recognise the challenges posed by obtaining Scope 3
data, particularly from third parties and indirect impacts.
We have started to gather the appropriate data for these
and have implemented the following timeline in relation to
Scope 3 data and disclosures.
Although we are not required to disclose Scope 3 data
under current regulations, in line with best practice and
TCFD and SECR guidance we have chosen to disclose the
2022 Scope 3 emissions for our Business Air and Land
Travel from our Chepstow and Bath sites.
In order to understand and reduce our Scope 3 emissions
we need to have a clear understanding of our supply
and value chain. We have begun this process through
identifying suppliers which currently hold ISO:14001
certificates to understand if they are working to reduce
their emissions.
80% of UK sites now
run entirely on green electricity
Sites
Scope 1
Scope 2
Business
Air Travel
Business
Land Travel
Upstream
Emissions
Downstream
Emissions
UK
2022
2022
Global
2023
2023
2022
2023
2022
2023
2023
2024
UK Emissions7
SCOPE 3
Emissions from business air travel8
Emissions from business land travel8
METRIC
Tonnes / CO2e
Tonnes / CO2e
Intensity Metric9
Tonnes CO2e / Revenue £m
1
CO2 per units for 2022 were calculated using the metrics provide by the suppliers directly. CO2 per units for 2021 were calculated using data from
Energy and Carbon Conversions 2021 Update by Carbon Trust UK as the direct data was not available.
2
Facilities in 2022 include all UK facilities, facilities in 2021 only include our Chepstow and Bath offices as the other data was not available.
3
The 2022 emissions include vehicles owned by UK all UK entities, the 2021 emissions include only vehicles owned by Chepstow and Bath sites.
4
Purchased electricity for 2022 includes all UK sites, purchased electricity for 2021 only includes data for our Chepstow and Bath sites.
5
Energy consumption for 2022 includes all UK sites, energy consumption for 2021 includes only data for Chepstow and Bath.
6
Intensity metric is based on revenues. We believe this to be appropriate metric as it will help us monitor our progress as the company continues to grow.
The 2022 revenues include revenues from all UK sites. 2021 revenue includes revenue from Chepstow and Bath sites only.
7
Scope 3 emissions for Chepstow and Bath site only.
8
9
CO2/Mile was calculated using direct data from travel provider and the CO2 per mile from Department for Transport 2020.
Revenues from Chepstow and Bath sites only.
2024
2025
2022
411.9
22.2
434.1
216.0
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Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Our Planet…continued
Action to Reduce Our Impact
Water & Waste
Despite our strategy and wider industry progress being
in its infancy we have already made great strides in
reducing our impact on the planet through the following:
▶ Obtained ISO: 14001 in Chepstow and Bath offices
▶ Installed LED lighting across our UK offices leading
to an 80% reduction in CO2 emissions per light
▶ 80% of the Group’s electricity currently comes from
renewable sources
▶ Revised our soak test requirements when manufacturing
our CROMA platform to save 5.4kWh per generator
▶ Installed electric vehicle charging points at our
Chepstow site
▶ Planting of trees within the UK and overseas to help
offset emissions through business travel
▶ Smart travel campaign to raise awareness of types
of business travel and the CO2 each produces
▶ Bike to work scheme
We are also in the process of implementing the following,
which we expect to be completed in early 2023:
▶ Supply chain analysis of supplier impacts
▶ Carbon calculator
Although we do not use a significant amount of water we
still track the amount of water usage across the Group
and look for ways to reduce our water usage. We have
undertaken an analysis to ensure that we do not operate in
any water deprived areas and monitor the amount of water
used throughout the business.
ISO 14001 is an internationally
recognised standard for
Environmental Management
Systems and demonstrates
Creo’s commitment to
Environmental Management.
We now segregate all wastes at all our offices including
batteries, WEEE, hazardous materials, sharps, and clinical
waste etc. We have now implemented flexible working
practices and we asked staff to return any waste electrical
items, batteries, etc. to the workplace so it can be recycled
as part of our business waste.
Waste Electrical and Electronic Equipment
(“WEEE”)
As a producer we place electrical items onto the UK market
which will eventually become waste. We understand our
obligations to manage this, both morally and legally. We
have joined a producer compliance scheme (“PCS”) to
support and assist our efforts. Under the relevant laws,
we are considered a small producer as we place less than
five tonnes of electrical product onto the market annually.
This allows us to register with the European Agency direct.
However, we have chosen a PCS to handle our registration so
that we receive timely and effective guidance as our business
develops and additional obligations come into force.
Regulatory Requirements and Frameworks
We keep abreast of the rapidly evolving regulatory
environment, particularly around climate change and
disclosures. Although we are not required to report on Task
Force on Climate-Related Financial Disclosures (“TCFD”)
we have made significant progress on our disclosures of
Scope 1 & 2 emissions and have a clear plan to understand
and disclose more detail about our Scope 3 emissions in the
next few years.
The implementation of our Sustainability Committee
alongside our Risk Committee will allow us to begin to
set a clear climate impact strategy along with appropriate
scenario testing, identification of opportunities and threats
and resilience testing.
We are aware that the IFRS Sustainability Standards Board
are planning on issuing the IFRS Sustainability Standards
Disclosures which are likely to come into force in the next
few years and await to see how these align with the TCFD.
The current plans and strategy mean we are on the front
foot in this ever-changing environment to be able to meet
future and current regulatory requirements as they arise.
What’s next?
▶ Increased Scope 3 data capture and disclosures
▶ Regional sustainability champions within the business
▶ Benchmarking of KPIs to industry and competitors
▶ Continue to save energy in our current business practices
How we Govern
▶ SECR compliance
▶ ISO: 14001
▶ Data capture
▶ Sustainability Committee
▶ Producer compliance scheme
85
Creo Medical Group plc — 2022 Annual Report & AccountsStrategic ReportSustainability ReportCorporate GovernanceFinancial Statements Corporate
Governance
CLINICAL CASE STUDIES
Learn more about the benefits of Speedboat
Inject through a number of clinical case studies.
SCAN THE QR CODE TO READ OUR CASE STUDIES
87
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Chair’s Statement
Continued Evolution of a
Medical Device Innovator
“ … a shared culture spanning multiple
markets and driving real synergies
across the business”
—Charles Spicer, Chair
Overview
Creo Medical continues its evolution from a UK medical
device innovator into an international group focused
on the clinical and commercial adoption of a full suite
of electrosurgical products. With multi-tiered revenue
streams and a global reach servicing over 4,800
customers from 14 offices, our core products are now in
daily use around the world.
During the year, the Group further embedded its core
technologies into its acquired businesses to create a
shared culture spanning multiple markets and driving
real synergies across the business. This is seen from
the launch of our Creo branded consumable products
in the US providing additional revenue streams from
these synergies. We signed a landmark collaboration
agreement with Intuitive Surgical and announced a
licence and royalty agreement with CMR Surgical.
Consequently, we are now working on both sides of
the Atlantic with two of the leading robotic surgery
brands to deploy our proprietary technology into new
surgical markets that complement our core
electrosurgical products.
Notwithstanding this progress, like most companies, we
faced economic headwinds fuelled by both war in Europe
and global fears around inflation and recession. These hit
the equity markets for small-cap, technology companies like
ours especially hard and increased as the year progressed
and our share price worsened. This resulted in uncertainty
over sources of equity finance in the second half of the
year but has been addressed, post-period, by the placing,
subscription and open offer that completed in March 2023
to raise gross proceeds of approximately £33.7 million. The
Directors believe our strengthened balance sheet provides
a pathway to cashflow breakeven and profitability and
gives comfort to our shareholders, bank debt providers,
customers, suppliers and partners.
Sustainability
Creo Medical is committed to best practice in its
environmental and social policies under the umbrella term
of ‘sustainability’ which emphasises our core social impact
of improving clinical outcomes for patients. Ivonne Cantu
leads the charge as the non-exec champion on sustainability
and represents the Board on the Sustainability Committee.
The Sustainability Report on pages 70 to 85 outlines
the three areas where we believe we can make the
greatest impact: by improving outcomes for our patients,
clinicians and healthcare providers; by promoting diversity,
equality and enhanced opportunities for our people and
communities; and by ensuring that the actions we take as a
business mitigate our environmental impact on our planet.
Governance
The Company continues to strengthen our governance
framework with energetic engagement by the Non-
Executive Directors at Board level, through the Board
committees and in discussion with shareholders. As
detailed in the 2022 Compliance Statement on pages 96
to 100, the Group has adopted the QCA Code of Conduct
with its 10 principles to deliver growth, maintain a dynamic
management framework, and build trust.
The Board recognise the challenging MDR/MDD
environment particularly for relatively new Companies
and the uncertainties that arise from this. Therefore, the
Directors share a close focus on risk management as the
Group develops new products, new clinical procedures,
and new markets. The Audit Committee, chaired by John
Bradshaw, our Senior Independent Director, meets regularly
to review and monitor the financial statements, accounting
principles, internal controls and risk management systems
as detailed in our maiden Audit Committee Report on
pages 106 to 107. The Committee also monitors the
relationship with our auditors to ensure independence and
objectivity.
The Board continues to seek guidance from our
professional advisers, including solicitors, auditors,
remuneration consultants and nominated adviser on
recommended best practice for AIM companies.
Employees
Creo Medical’s staff has grown from just 27 employees
in the year before IPO to 284 employees operating in 14
countries spanning Europe, the US and Asia. Approximately
120 employees came from acquisitions we completed in
2020 and 2021.
2022 was a tough year for all our management and
employees with challenging delivery requirements set
against constrained resources and disrupted economies
and capital markets.
A reorganisation reflecting the transition of the Company
towards operational focus means we have had to say
goodbye to some great people who have helped us get
where we are today.
The Board would like to thank all these employees
along with the Creo Medical team for their hard work,
commitment and patience during the year which laid the
foundations for the successful equity raise and therefore
the exciting next stage of our evolution.
The Group promotes an entrepreneurial employee
culture guided by five values: collaborative, creative,
disruptive, ‘can-do’, and life-changing patient outcomes.
The Remuneration Committee, chaired by Ivonne Cantu,
aims to implement a remuneration policy that promotes
long-term success, consistent with our culture and values
and that is aligned with the interests of our shareholders
and other stakeholders. Further details are included in the
Remuneration Report on pages 108 to 117.
Shareholders
While the Company’s frustrating share price performance
during 2022 can be partly blamed on the external factors
outlined above, it was exacerbated by its weakening
balance sheet and uncertainty over future sources of
capital. This necessitated frequent discussions between
the Company and its shareholders to determine the best
route forwards. These resulted in the equity raise in Q1
2023 that was oversubscribed by both existing and new
shareholders. The Directors extend heartfelt thanks to our
fellow shareholders for this engagement and support in
exceptionally challenging market conditions.
Outlook
Our CEO, Craig Gulliford, has outlined in his report on
pages 12 to 13, the Group’s ambitions to become a premier
global medical devices company transforming many
thousands more lives. With a now strengthened balance
sheet and clear targets for the next few years, management
and staff can focus on these bold ambitions. Meanwhile,
we will continue to build systems for governance,
sustainability, and remuneration that are well aligned with
the ambitions of all our stakeholders.
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Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsCreo Medical Group plc — 2022 Annual Report & Accounts Board of Directors
Board of Directors
NON-EXECUTIVE DIRECTORS
Charles Spicer
Chair
Charles is an experienced director of public and private companies, especially
in the MedTech sector. He is also Chair of IXICO plc and Korn Wall Limited
(KwickScreen). He is the Chair of the UK Department of Health’s Product
Development Awards Selection Panel B for Invention for Innovation (i4i).
Charles served as a director of Aircraft Medical (acquired by Medtronic Inc.
in 2015) and Stanmore Implants (acquired by Stryker Inc. in 2016). Charles
was previously Chief Executive of MDY Healthcare plc, a strategic healthcare
investor and, prior to that, Head of Healthcare Corporate Finance at both
Numis Securities and Nomura International.
Charles is a member of Creo’s Audit Committee.
John Bradshaw
Senior Independent Non-Executive Director
John is a chartered accountant with more than 25 years’ experience as a chief
financial officer with venture capital backed and listed companies. Prior to his
retirement in July 2021, John was Chief Financial Officer of Syncona Investment
Management Limited, the Investment Manager of Syncona Limited, a FTSE 250
listed life sciences investment company. John served as a non-executive director
and chair of the audit committee of AIM listed IXICO plc from October 2013 until
April 2022.
John chairs Creo’s Audit Committee and is a member of the Remuneration
Committee.
Ivonne Cantu
Independent Non-Executive Director
Ivonne joined Creo’s Board on 1 February 2020 and has extensive experience
in corporate finance, having acted as a corporate finance adviser to UK and
international companies for more than 20 years at Cenkos Securities plc and
previously at Merrill Lynch.
Ivonne is currently director of Investor Relations and Sustainability at
Benchmark Holdings plc, an AIM listed aquaculture biotechnology company
and a non-executive director and chair of the remuneration committee at
Primary Health Properties plc.
In addition, Ivonne is a trustee of La Vida, a UK registered charity which
supports grassroots projects in the fields of education, environment and
health throughout Latin America.
Ivonne holds a BSc in Engineering from Universidad Panamericana in Mexico
and an MBA from the Wharton School of Business.
Ivonne chairs Creo’s Remuneration Committee and is a member of the Audit
Committee.
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EXECUTIVE DIRECTORS
Craig Gulliford
Chief Executive Officer
Craig was a founding angel investor in Creo Medical and became CEO in 2012.
Craig qualified with an MSc in Electronic Engineering from the University College
of North Wales. Craig’s early career developed in the Middle East, working with
large corporates delivering complex commercial projects. Craig has over 25
years’ experience in building international businesses from early stage through to
significant scale. In January 1999, Craig joined a start-up software and hardware
business where, as COO, he was part of a small team that grew the company both
organically and through acquisition, from a loss-making start-up to a profitable
business delivering significant shareholder returns and an exit in 2007.
Craig is a non-executive director of I.Q. Endoscopes Limited.
Professor Christopher Hancock
Chief Technology Officer
Chris is the founder of Creo Medical and has over 25 years’ experience in
medical device innovation, design and development.
Chris holds a personal chair in the Medical Microwave Systems Research Group
at Bangor University. Chris is a Fellow of the Royal Academy of Engineering, a
Fellow of the Learned Society of Wales, a Fellow of the Institute of Physics, and
a Fellow of the Institute of Engineering and Technology. He is also a Chartered
Engineer, a Chartered Physicist and a Senior Member of the Institute of Electrical
and Electronics Engineers. Chris is a Royal Academy of Engineering Visiting
Professor at UCL, and an Honorary Professor in the School of Medicine at
Cardiff University.
Chris was awarded the Institute of Physics Katherine Burr Blodgett Gold
Medal and Prize in 2019 for work on Creo’s CROMA Advanced Energy Platform
technology and the Inaugural Junkosha Technology Innovator of the Year prize
and award in 2022.
Chris is a named inventor and lead author on over 1,200 worldwide granted
patents, pending patents and international journal publications in the use of
electromagnetic energy for medical applications.
Richard Rees
Chief Financial Officer
Richard joined Creo Medical as CFO in July 2016. Prior to joining Creo,
Richard was CFO of SPTS Technologies, a UK-based, global manufacturer
of semiconductor capital equipment. In 2011, Richard was part of the SPTS
Technologies’ management team that, together with Bridgepoint Capital,
acquired SPTS Technologies for $200m from Sumitomo Precision Products. In
2014, SPTS Technologies was acquired by Orbotech Ltd for more than $350m.
Prior to joining SPTS Technologies, Richard spent seven years at KPMG in audit.
David Woods
Chief Commercial Officer
David joined Creo as CCO in August 2020, having previously sat on Creo’s
Board as a Non-Executive Director. David provides leadership and strategic
direction for Creo’s commercial divisions, overseeing all strategic global
commercial activities.
David is an industry veteran within the MedTech sector. His experience
encompasses Gastroenterology, General and Orthopaedic Surgery,
Pulmonology and Ear, Nose and Throat.
Prior to joining Creo, David was the President and CEO of PENTAX
Americas and M&A Director of Hoya Corporation, Pentax Life Care Division.
David brings significant operating and commercial experience, market
understanding and a proven track record of achievement to Creo. He has also
previously sat on multiple MedTech boards over the years. He was awarded
the American Society for Gastrointestinal Endoscopy President’s Award in
2010, recognising exceptional contributions to the society and its mission.
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Directors’ Report
The Directors present their report together with the audited
consolidated financial statements for the 12 months to 31
December 2022. These will be laid before the shareholders
of the Company at the next Annual General Meeting
(“AGM”).
Creo Medical Group plc (admitted to the AIM market of
the London Stock Exchange (LSE: CREO), is incorporated
in England and Wales with registration number 10371794.
The Company’s registered office is at Creo House, Unit 2
Beaufort Park, Beaufort Park Way, Chepstow, Wales,
United Kingdom NP16 5UH.
Principal activity
in the field of research and development and the steps
being taken to commercialise the technology being
developed.
Directors
The Directors who held office during the year and up to
the date of approval of the financial statements were as
follows:
Executive Directors
Craig Jonathan Gulliford
Professor Christopher Paul Hancock
Richard John Rees
David Gerard Woods
The principal activity of the Group during the period continued
to be that of research and development and the manufacture
and sale of medical devices and instruments. The principal
activity of the Company is that of a holding company.
Non-Executive Directors
Charles Alexander Evan Spicer
John Bradshaw
Ivonne Maria Gloria Cantu
Results and dividends
The Group results for the 12 months to 31 December 2022
are set out in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income on page 126.
The Directors do not recommend the payment of a
dividend.
Review of the period
A summary of the Group’s progress and development is set
out in:
Directors’ interests and indemnity
arrangements
The Directors’ interests in the shares of the Company are
disclosed in the Remuneration Report on pages 108 to 117.
In accordance with Section 234 of the Companies Act
2006 and as permitted by the Articles of Association of the
Company, the Company maintained insurance throughout
the year for its Directors and officers against the
consequences of actions brought against them in relation
to the execution of their duties for the Company.
The Chief Executive’s Statement on pages 12 to 13;
The Chief Technology Officer’s Statement on pages 60 to 61;
The Chief Commercial Officer’s Statement on pages 16 to 17;
The Chair’s Statement on pages 88 to 89; and
The Financial Review on pages 62 to 65.
No Director had, during or at the end of the year, a material
interest in any contract which was significant in relation
to the Group’s business except in respect of service
agreements and share option awards and as disclosed in
the Directors’ Remuneration Report on pages 108 to 117.
each of which form part of the Strategic Report. This
analysis includes a commentary on the position of the
Group at the end of the reporting period, an indication of
likely future developments in the business of the Group
including steps being taken in respect of the Group’s overall
strategy, details of the commercial activity undertaken
during the reporting period, details of the Group’s activities
The Company has not granted any indemnities to any of its
Directors against liability in respect of proceedings brought
by third parties.
Share capital
Details of the Company’s issued share capital are shown in
Note 21 to the consolidated financial statements on pages
155 to 166.
As at 31 December 2022, 181,545,885 fully paid Ordinary
Shares were in issue. Following the completion of the post
period fundraising on 8 March 2023, 350,891,272 fully paid
Ordinary Shares were in issue. The share capital comprises
one class of Ordinary Shares and these are admitted on the
AIM market of the London Stock Exchange.
All shares are freely transferable and rank pari passu for
voting and dividend rights.
Substantial holdings
As at 31 December 2022, shareholders holding more than
3% of the share capital of Creo Medical Group plc1 were
as follows:
Number of
Voting
rights
Financial risk management objectives
and policies
The Company’s financial risk management objectives and
policies are shown in Note 18 to the consolidated financial
statements on pages 150 to 153. The main risks arising from
the Company’s financial instruments are interest rate risk,
exchange rate risk, credit risk, and liquidity risk, which are
continuously monitored by the Board.
Political contributions
The Company made no political donations or incurred any
political expenditure during the year.
Disclosure of information to auditor
The Directors who held office at the date of approval of
this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which
the Company’s auditor is unaware; and each Director
has taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit
information and to establish that the Company’s auditor is
aware of that information.
Name of shareholder
shares
(%)
Canaccord Genuity
26,082,158
14.37
Other information
Finance Wales Investments
12,776,727
7.04
6.91
12,537,441
11,533,623
6.35
Baillie Gifford
Capital Group
Creo Medical Group EBT
10,000,000
M&G Investments
9,428,500
5.51
5.18
An indication of likely future developments in the business
can be found in the Strategic Report on pages 56 to 61.
Significant events which have occurred since the end of
the financial year have been included in Note 27 of the
consolidated financial statements on page 158. Streamlined
Energy & Carbon Reporting (SECR) has been disclosed in
the sustainability report on page 83.
AXA Framlington Investment
7,992,961
4.40
Auditor
Managers
Hargreaves Lansdown,
6,753,632
3.72
stockbrokers (EO)
Tellworth Investments
5,772,778
3.18
PricewaterhouseCoopers LLP (“PWC”) was reappointed
as auditor at the last Annual General Meeting of the
shareholders, in accordance with Section 489 of the
Companies Act 2006.
1
Information obtained from an analysis of Creo Medical’s share register
(dated 31 December 2022) undertaken on behalf of Creo Medical by Equiniti—RD:IR.
Save as referred to above, the Directors are not aware of
any persons as at 31 December 2022 who were interested
in 3% or more of the voting rights of the Company or could
directly or indirectly, jointly or severally, exercise control
over the Company.
On behalf of the Board
Richard Rees
Director
Creo House
Unit 2, Beaufort Park
Beaufort Park Way
Chepstow, Wales
NP16 5UH
25 April 2023
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2022 Compliance
Statement
Introduction
In accordance with the London Stock Exchange’s
requirement for all AIM-quoted companies to adopt a
recognised corporate governance code, the Board of
Directors (Board) of Creo Medical Group plc (Creo, the
Company, we or us) adopted the Quoted Companies
Alliance (“QCA”) Corporate Governance Code (“Code”).
This statement provides a summary of how Creo
endeavours to comply with the 10 principles of the Code
(as in force at the date of this statement) taking into
account Creo’s stage of development and its available
resources. In addition to the Code, Creo seeks guidance
from its professional advisors including its solicitors,
auditors, remuneration consultants and NOMAD on
recommended best practice for AIM companies at a
similar stage of development.
Creo’s mission is to improve patient outcomes by applying
advanced energy to the emerging field of surgical
endoscopy. We aim to deliver value to all stakeholders,
including:
▶ patients, by improving patient outcomes by bringing
advanced energy to flexible medical devices;
▶ customers, by developing products with the aim of
reducing procedure times and costs;
▶ business partners, by interacting in an ethical and
equitable manner;
▶ employees, by offering rewarding careers with support
and encouragement to allow everyone to fulfil their
potential; and
▶ shareholders, by deploying capital against a well
thought through and measured business plan to
achieve long-term, sustainable growth.
The Board’s role is to ensure that Creo is managed for
the long-term benefit of all shareholders. Our corporate
governance processes are designed to ensure control,
reduce risk, enhance long-term value generation and
underpin Creo’s long-term objectives.
The Quoted Companies Alliance Corporate Governance Code
is constructed around 10 principles, taking key elements of
good governance and applying them in a manner which is
workable for the needs of a growing company in pursuit of
medium to long-term value creation for shareholders.
Each principle is set out below along with a commentary
of Creo’s compliance. To the extent an explanation of
Creo’s compliance for one principle is relevant against
another principle, the explanation is deemed to apply to
all relevant principles.
Deliver Growth
1. Establish a strategy and business model which
promote long-term value for shareholders
Creo is an advanced energy medical device company
focused on the development and commercialisation of
minimally invasive medical 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 and powered by Creo’s proprietary
adaptive technology.
Pages 20 to 21 set out our strategy and business model
and provide details on how we aim to promote long-term
shareholder value. Creo’s commercial focus is the increase
of clinicians trained in the safe use of its core technology
and the conversion of those clinicians into regular
users. In addition, as part of Creo’s Kamaptive Licensing
Programme, Creo has entered into agreements with a
number of partners pursuant to which it will develop and
license its technology, providing additional income streams
to the business and enabling third party products to
benefit from Creo’s technology and expertise. This ensures
that as many people as possible can benefit from Creo’s
technology and that shareholders derive maximum returns.
Any new initiatives, partnerships or variations to Creo’s
core strategy are communicated in a timely manner to
shareholders via the RNS through ad-hoc releases, trading
updates and/or interim results announcements.
2. Seek to understand and meet shareholder
needs and expectations
Creo is committed to open communication with all
shareholders to ensure that its strategy, business model
and performance are clearly understood. Understanding
what shareholders and analysts think about Creo and, in
turn, helping shareholders and analysts understand our
business and addressing any specific concerns that
they may have, best places the Board to drive Creo’s
business forward.
Creo primarily communicates to its shareholders through
the RNS, shareholder presentations and via the Annual
Report and interim reporting process.
Institutional Shareholders
The Directors engage with our institutional shareholders
regularly, and in any event meets with institutional and
other significant shareholders at least twice annually
through the results roadshow processes. This allows
members of the Board to develop an understanding of
their views and concerns and provides a forum for the
Executive Directors to update shareholders on strategy, the
Company’s performance and the evolution of its business.
The Chair also meets with institutional shareholders
separately from the Executive Directors. In addition, our
Senior Independent Director and committee Chairs are also
available to meet with shareholders on request to discuss
specific areas of concern.
Private Shareholders
Creo’s AGM is the principal in-person forum for dialogue
between private shareholders and the Board. All
shareholders are invited to attend Creo’s Annual General
Meeting where they can meet with the Directors and
understand and exchange opinions on the direction of
the Company. The Executive Directors, Chair of the Board
and all other Directors routinely attend the AGM and are
available to answer questions raised by shareholders.
Copies of our Annual Report and the notice of AGM are
sent to all shareholders at least 21 days before the AGM.
Copies of these documents, along with other information
for shareholders, are also provided on our website.
The results of the AGM are released via the RNS as soon
as practicable after the conclusion of the meeting. This
announcement also provides, for information, details of
the total number of votes in favour of each resolution. At
our 2022 AGM all resolutions put to shareholders were
duly passed.
Along with broker analysis, Creo retains the services
of Proactive Investors and Edison Research to provide
research and commentary on the business.
3. Take into account wider stakeholder and
social responsibilities and their implications
for long-term success
Creo’s key stakeholders are our patients, customers,
employees and workers, business partners, suppliers,
shareholders and the wider communities in which we
operate. The Board takes into account wider stakeholder
and social responsibilities when making its decisions. Our
Annual Report includes examples of how the business
takes into account the needs of our wider stakeholders
when taking key decisions.
Creo is a socially responsible company with ESG at its core.
Our Sustainability Report is set out on pages 70 to 85.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
The Board is responsible for maintaining a sound system
of internal financial and operational control and the
ongoing review of its effectiveness. The Board’s measures
are designed to manage, not eliminate, risk and, as such,
provide reasonable, but not absolute, assurance against
material misstatement or loss. Some key features of the
internal control system are:
▶ Management accounts information, budgets, forecasts
and business risk information which are regularly
reviewed by the Board;
▶ A rigorous quality management system which is
compliant with the ISO:13485 standard and which is
externally audited;
▶ Operational, accounting and employment policies which
are regularly reviewed and updated as appropriate;
▶ Clearly defined organisational and reporting structures
within the Company; and
▶ Established financial reporting and control systems
within the Company which are reviewed and challenged
by the Company’s Audit Committee.
Creo reviews its internal controls regularly to ensure that
they give the necessary flexibility to enable growth and the
delivery of long-term shareholder value while having the
correct checks and balances in place.
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The Company maintains a risk register which is reviewed
regularly through a working committee within the business
and ultimately by the Board who appraises external
and internal threats and determine the necessary steps
required to be taken to mitigate those risks. Principal risks
and uncertainties that may affect the business are set out
in more detail on pages 66 to 69 of this report.
The business is supported by a number of professional
advisors, including its patent agent, solicitors and legal
advisors (both internally and externally), product regulatory
advisors, auditors, accountants, NOMAD and its insurance
brokers. All advisors provide relevant advice to the
business to allow it to identify and mitigate risk accordingly.
Maintain a Dynamic Management
Framework
5. Maintain the board as a well-functioning,
balanced team led by the chair
Creo has a strong and effective leadership team. Creo’s
Board comprises an Independent Non-Executive Chair,
four Executive Directors, and two further Non-Executive
Directors, one of which acts as Creo’s senior independent
Non-Executive Director. Brief biographies for each Board
member are set out on pages 90 to 93.
Executive Board Members
Craig Gulliford, Chief Executive Officer
Richard Rees, Chief Finance Officer
Prof. Christopher Hancock, Chief Technology Officer
David Woods, Chief Commercial Officer
Non-Executive Board Members
Charles Spicer, Independent Non-Executive Chair
John Bradshaw, Senior Independent Non-Executive Director
Ivonne Cantu, Non-Executive Director
The Board delegates certain duties to an Audit Committee
and a Remuneration Committee, all of which operate within
clearly defined terms of reference and, where applicable, in
accordance with the Code. Further information on our Board
committees can be found on our website. The Board does
not currently have a Nomination Committee or Disclosure
Committee as matters which would be considered by these
committees are undertaken by the Board as a whole.
The Company’s Articles of Association require one third
of its Directors to stand for re-election at each AGM, with
each Director to be re-elected at least every three years. The
Company’s Articles of Association are available on our website.
At our 2022 AGM, Prof. Christopher Hancock and John Bradshaw
both stood for re-election. Both resolutions were duly passed.
Charles Spicer is Creo’s Independent Non-Executive Chair.
Charles has a limited shareholding in the Company, via his
SIPP, and a limited pre-IPO interest in the Company’s share
option scheme. The Board does not consider Charles’s limited
share and option holdings to be significant and therefore
consider him to be an independent Non-Executive Director.
John Bradshaw is Creo’s senior independent Non-Executive
Director. John has a limited shareholding in the Company,
having exercised his pre-IPO share options during the
year. The Board does not consider that John’s limited
shareholding to be significant and consider him to be an
independent Non-Executive Director.
The Board feels that it has an appropriate balance between
independence, knowledge of the Company’s technology,
sector experience and professional standing to allow it to
discharge its duties and responsibilities well. All Directors
are encouraged to debate and use independent judgement
based on their respective knowledge and experience on all
matters affecting the business.
The time commitment expected of the Directors is
commensurate with the size and complexity of a quoted
company and as necessary to properly perform their
duties. During the 12 months ending 31 December 2022,
the Directors attended the meetings set out above. 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 or Directors do not
attend or participate in such discussions. Directors are not
permitted to participate in such considerations or to vote
regarding their own conflicts.
6. Ensure that between them the directors have
the necessary up-to-date experience, skills
and capabilities
The Board considers that it contains an appropriate range
of skills, experience and knowledge, but is mindful of the
need to continuously review the needs of the business to
ensure that this remains true.
Director
Scheduled Board Meetings
Ad hoc meetings*
Audit Committee
Remuneration Committee
Charles Spicer
John Bradshaw
Ivonne Cantu
Craig Gulliford
Richard Rees
Christopher Hancock
David Woods
4/4
4/4
4/4
4/4
4/4
4/4
4/4
8/8
8/8
8/8
7/8
8/8
7/8
7/8
7/7
7/7
7/7
–
7/7 (as an attendee)
–
–
2/3 (as an attendee)
3/3
3/3
3/3 (as an attendee)
3/3 (as an attendee)
–
–
*
i.e. update calls, sub-committee meetings, or meetings where only a quorum is required
Creo’s Board members are of sufficient calibre to bring
independent judgment to issues of strategy, performance,
resources and standards of conduct, which are vital to
the future growth and success. The Board believes that
it operates in an open and constructive manner, working
effectively as a team.
Each Director is aware of the importance of keeping their
skills and capabilities up to date. The Board is kept up
to date on changes to the AIM rules briefings from the
Company’s nominated adviser, as well as other regulatory
and market matters on an ad hoc basis.
In addition, the Board has access to senior employees within
the business and is supported by a number of professionals
(both internal and external), including the Company’s
General Counsel, the CFO (who is a chartered accountant),
the Senior Independent Non-Executive Director (who is a
chartered accountant) and external advisors.
7. Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement
The Board seeks to improve the ways in which it interacts
and the manner in which information is presented to it.
Creo’s reporting processes allow a consistent reporting
approach, thus aiding analysis by the Board of all matters
at hand.
While the Company does not currently have any formal
appraisal processes or evaluation criteria for Board
members, the Chair and Non-Executive Directors regularly
discuss performance with members of the executive
team which, in the Board’s opinion, is sufficient for the
Company’s purposes currently. This will be kept under
review and the Board will consider whether formal
evaluations are appropriate in the future.
8. Promote a corporate culture that is based on
ethical values and behaviours
Ethical values and behaviours are at the heart of what
we do. The Board seeks to enshrine such ethical values
and behaviours throughout the conduct of all of Creo’s
activities. Our values are set out in our policies, our working
practices and our systems.
The Board seeks to treat all persons fairly and equitably,
through clearly defined parameters of operation. This
includes full compliance with safe working practices but
also maintaining and protecting a positive and supportive
working environment. Pages 70 to 85 of our Sustainability
Report set out further details of the steps we take in
respect of the wellbeing of our employees.
As part of the induction process, all employees are
provided with details of Creo’s policies and procedures that
promote and support ethical values and behaviours. Creo’s
HR team continually monitor and support employees on
their working practices and provide timely reminders and
updates on policies and procedures, including formal
online training. Breaches of Creo’s policies and procedures
are reported to relevant line managers and ultimately to the
Board to ensure that matters are dealt with in a timely and
fair manner. In addition, Creo has a whistleblowing policy to
allow and encourage all employees to bring matters which
cause them concern to the attention of certain persons
within the Company and, ultimately, to the attention of the
Chair of the Board.
The nature of our products requires a robust quality
management system which is third party audited to
the ISO:13485 standard. Underpinning this quality
management system are processes to ensure that
necessary safeguards are in place to ensure the integrity
of this system and accordingly the quality of the products
under development.
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Corporate Governance Report…continued
Statement of Directors’ Responsibilities
9. Maintain governance structures and processes
that are fit for purpose and support good decision-
making by the board
The Board has adopted a schedule of specific matters
reserved for the Board to consider and, if thought
appropriate, decide upon. These reserved matters relate to:
As Chair, Charles Spicer provides leadership to the Board and
is responsible for agreeing the agenda for Board meetings,
ensuring (with the Company Secretary) that the Directors
receive the information that they need to participate in Board
meetings in a timely fashion, and that the Board has sufficient
time to discuss issues on the agenda, especially those relating
to strategy and governance.
Craig Gulliford, Creo’s Chief Executive Officer, is responsible
for the day-to-day leadership of Creo, the management
team and its employees. The Chief Executive Officer is
responsible, in conjunction with senior management, for the
execution of the Company’s strategy, as approved by the
Board, and the implementation of Board decisions.
The Board is collectively responsible for the long-term
success of the Company. Its principal role is to provide
leadership within a framework of prudent and effective
controls, which enables risk to be assessed and managed. The
Board considers the management team’s strategic proposals
and, following a rigorous review, determines strategy and
ensures that the necessary resources are in place for the
management team to execute against that strategy.
The Board seeks to meet regularly, but in any event holds
Board meetings on a quarterly basis, together with meeting
for an annual strategy event. In addition to the scheduled
meetings, members of the Board regularly hold informal
discussions with both Executive Directors and senior
operational managers of the Company to discuss strategic
business developments and other topics important to the
Company’s progress. Further, Board calls are held when
needed to allow the executives to update the Board on
specific matters and/or to approve specific actions for
which Board approval is required.
The Board delegates certain duties to Board Committees,
all of which operate within clearly defined terms of
reference and, where applicable, in accordance with the
Code. Further information on our Board committees can be
found on our website.
The Board and its committees are provided with information
ahead of meetings to give time for review and analysis. For
each Board meeting an agenda is prepared and approved by
the Chair and followed. The Board maintains an ongoing list
of matters arising from the Board meetings which are then
followed up at subsequent meetings to ensure that matters
and decisions are being implemented.
▶ Strategy and oversight, including the approval of
annual budgets;
▶ Changes to the capital structure of the Company and
the corporate structure of the Group;
▶ Approval of financial statements and reports and any
capital spend above agreed limits;
▶ Approval of contracts outside of the ordinary course
of the business;
▶ Changes to Board and committee membership;
▶ Remuneration of Executive Directors and issues relating
to share options;
▶ Any delegation of authorities;
▶ Governance; and
▶ Approval of policies.
Build Trust
10. Communicate how the company is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
We seek to maintain dialogue with shareholders and other
relevant stakeholders through a number of channels. Our
Annual Report, full year and half year announcements are
the primary sources of information for shareholders. These
are supplemented by regular and appropriate RNS and
RNS Reach announcements.
The above, together with other relevant information on the
Company, can be obtained from our website.
The Company’s collegiate and open working environment
means that all employees are able to relay concerns to the
executive team directly. The Company has a whistleblowing
policy to allow and encourage all employees to bring matters
which cause them concern to the attention of certain persons
within the Company and, ultimately, to the attention of the Chair
of the Board.
The Company has engaged Walbrook PR to advise
on its communications strategy and to assist in the
drafting and distribution of regular news and regulatory
announcements. If shareholders or interested parties would
like to contact Walbrook regarding any communications,
they can be contacted at creo@walbrookpr.com.
On behalf of the Board
Richard Rees
Director
Statement of Directors’
Responsibilities in
respect of the financial
statements
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the group financial statements
in accordance with UK-adopted international accounting
standards and the parent company financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law).
Under company law, directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the group
and parent company and of the profit or loss of the group
for that period. In preparing the financial statements, the
directors are required to:
▶ select suitable accounting policies and then apply them
consistently;
▶ state whether applicable UK-adopted international
accounting standards have been followed for the group
financial statements and United Kingdom Accounting
Standards, comprising FRS 101 have been followed for
the parent company financial statements, subject to
any material departures disclosed and explained in the
financial statements;
▶ make judgements and accounting estimates that are
reasonable and prudent; and
▶ prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
group and parent company will continue in business.
The directors are responsible for safeguarding the assets
of the group and parent company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the group’s and parent company’s transactions and
disclose with reasonable accuracy at any time the financial
position of the group and parent company and enable them
to ensure that the financial statements comply with the
Companies Act 2006.
The directors are responsible for the maintenance and
integrity of the parent company’s website. Legislation
in the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
In the case of each director in office at the date the
directors’ report is approved:
▶ so far as the director is aware, there is no relevant audit
information of which the group’s and parent company’s
auditors are unaware; and
▶ they have taken all the steps that they ought to have
taken as a director in order to make themselves aware of
any relevant audit information and to establish that the
group’s and parent company’s auditors are aware of that
information.
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Engaging with
Stakeholders
Section 172(1) Statement
The Board of Directors’ statement regarding section
172(1) of the Companies Act 2006 and our commitment
to transparent and constructive dialogue with all our
stakeholders.
The impact on each stakeholder group is carefully
considered by the Board of Directors (the “Board”).
The Board considers, in good faith, that it acts and has
acted at all times, both individually and collectively, in a
way that would be most likely to promote the success of
the Company for the benefit of its members as a whole
having regard to the matters set out in s172(1)(a-f) of the
Companies Act 2006:
(a) The likely consequences of any decision in the long
term:
The long-term success of the Company and the Group
as a whole is key when making strategic decisions.
The Company is developing and commercialising
technology and products to address long-term clinical
needs for which sizeable addressable markets have
been identified. See page 23 for further details of these
markets.
(b) The interests of the Company’s employees:
Creo’s employees are core to our success. As a
significant and critical factor, employee wellbeing and
development has continued as a priority during 2022.
Our People and Communities section on pages 78 to
81 provides further details on the investment that we
continue to make in our employees during the year.
(c) Fostering business relationships with suppliers,
customers and others:
The adoption of Creo’s core technology requires strong
customer relationships which allow Creo to provide
support through ongoing clinical education on the safe
use of our products. By developing these relationships
along with continuing engagement with key opinion
leaders (“KOLs”), we seek to ensure that we release
products to the market in a measured and controlled
manner, reducing the risk of misuse and ensuring our
products are customer sponsored for the long term (i.e.
through clinical education and peer support by KOLs).
Outside of our core technology, the Group is both
a customer and supplier of third party, Original
Equipment Manufacturer (“OEM”) and Own Brand
Labelling (“OBL”) products. It is essential that strong,
collaborative, and fair relationships with third party
partners is built on trust and mutual respect as their
success is our success.
Our Kamaptive licence partners are carefully selected
to ensure alignment of long-term goals are aligned and
that relationships can be built for the mutual benefit of
both parties.
(d) The impact of the Company’s operations on the
community and the environment:
We place a high value on our relationships with our
communities around the globe. We are acutely aware
of the impact our operations and products have on
the environmental and how we can mitigate this.
Our Sustainability Report on pages 70 to 85 provides
further details on the steps that we are taking to
minimise our footprint and to align our objectives with
wider global initiatives.
(e) Maintaining a reputation for high standards of
business conduct:
Creo’s mission is clear: to improve lives. As such,
ethical values and high standards of business
conduct are at the heart of what we do. We expect
all employees and representatives of the Company
to maintain the high standards that we set ourselves.
These values and business conduct requirements are
enshrined in our corporate governance, our policies,
our working practices and our systems (including our
third party audited ISO:13485 quality management
system). Please also see our Governance Report on
pages 98 to 100 for further details.
(f) The need to act fairly between members of the
Company:
The Board recognises that members have different
views and objectives. The Board always seeks to ensure
that its decisions are equitable and fair as between the
members of the Company whilst balancing the interests
of all stakeholders.
▶ Attendance by Directors and employees at a number
of investor and sector-specific conferences allow
interested parties to have direct dialogue
▶ Timely and appropriate releases of business information
via the RNS and RNS Reach
▶ Social media updates allowing an insight into the day-
to-day activities of the business and its operations
Stakeholder Engagement
The Board takes into account the concerns of its
stakeholder groups in its discussions and decision making.
In discharging the duty set out in Section 172(1) of the
Companies Act 2006, the Board ensures that the impact
on each stakeholder group is carefully considered by
management when formulating all proposals requiring
Board approval.
Set out below are, in the Board’s view, Creo’s key
stakeholder groups, the key concerns of those groups and
how the Board seeks to engage with them.
Shareholders
Key concerns
▶ Deployment of capital against a clear strategy
▶ The development of our product portfolio and its
commercialisation
▶ Growth
▶ Corporate governance
▶ Sustainability
How we engage
▶ Regular communication with institutional and major
shareholders, not least to ensure that they understand
our strategy and business model
▶ Our Annual General Meeting (“AGM”) and any General
Meetings allow shareholders to meet and directly raise
concerns and have discussion with the Board
▶ Investor roadshows following the release of half and
full-year results
Employees
Key concerns
▶ Career development and remuneration
▶ Health & Safety and wellbeing
▶ Diversity
▶ Leadership
How we engage
▶ Our executive team, supported by a number of senior
managers, engage directly with all employees
▶ Team structures and organisation planning to facilitate
effective delegation and reporting
▶ Investment in IT solutions to allow a number of
communication channels, in particular to assist with
home working and cross office communications
▶ Employees are encouraged to take control of their career
development, in line with the longer-term growth of Creo
▶ During the reporting period we have continued to
support, in many areas increased support, in respect of
the health and safety and wellbeing of all employees
▶ Our performance management processes and the
promotion a culture of continuous improvement
throughout the business
▶ All employees have the ability to raise grievances
and to escalate concerns through our whistleblowing
procedures
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Customers/End Users
Business Partners/Suppliers
Key Decisions
Key concerns
Key concerns
▶ Quality products that meet clinical needs
▶ Strong relationships
▶ Competitive pricing
▶ Clear and ongoing dialogue to allow effective
▶ Clinical education and support
How we engage
▶ Creo engages with KOLs worldwide. Engagement starts
before prototype devices are made to ensure we develop
products that meet customers’ identified needs and
which they will ultimately use
▶ KOLs and clinicians provide feedback on our devices
through design processes, usability studies and pre-
clinical testing and analysis. This input assists strategic
decision making to ensure capital is deployed on
concepts and products that offer the greatest impact
for our customers, their patients and ultimately, Creo’s
business
▶ Creo’s Clinical Education Programme provides guidance
and training on the safe use of products and also
real-time feedback from the initial use of devices
▶ Creo’s expanded direct sales team offers support to all
customers and users, as well as support to distribution
partners
business planning
▶ Financial strength
▶ Regulatory compliance
How we engage
▶ We interact in an ethical and equitable manner with all
business partners and suppliers
▶ We strive to have open, constructive and effective
long-term relationships through open engagement,
regular meetings and dialogue, and recognise that this
is beneficial for the whole supply and product ecosystem
▶ Have dedicated internal resource to ensure we are
able to directly engage with regulators in a timely and
professional manner
Community And The Environment
Key concerns
▶ Safety
▶ Sustainability
▶ Community contribution
How we engage
▶ We actively seek to engage with local government
networks, with the intention of making a positive
economic impact on the region
▶ Where possible, we try to source locally to support
our community
▶ Our Pioneer Clinical Education Programme provides
our clinical community the opportunity to further their
practice which, in turn, benefits their patient community
and thus society as a whole
Two example decisions taken during the year together
with a summary of how the Board has taken into
account the factors set out in Section 172 of the
Companies Act 2006, are set out below:
Collaboration Agreement With Intuitive
Development Of Chepstow Site
Following Acquisition
Actions
▶ Mortgaged the site with Barclays Bank plc
▶ Utilised funding to develop the site to create additional
office, laboratory, training and meeting room space
▶ Utilised internal and external resource to undertake
Actions
the work
▶ Entered into a long-term, multi-year collaboration
with Intuitive to optimise certain Creo products to be
compatible with Intuitive’s robotic technology
▶ Utilised internal and external resource to negotiate
the agreement
▶ Ongoing deployment of resource to meet obligations
under the agreement
Key stakeholder group considerations
▶ Shareholders—deployed capital to further develop
Creo’s main site to provide sufficient space for expansion
and growth. Leverage provided additional capital
▶ Employees—provided employees with additional
facilities to allow closer collaboration in a more
collegiate environment
Key stakeholder group considerations
▶ Community and the Environment—by reinforcing
▶ Shareholders—considered the need to develop
additional revenue streams from Creo’s technology to
drive greater long-term business growth
▶ Employees—by engaging with third party partners,
employees gain greater experience and career
development opportunities
Creo’s commitment to its current facilities in Chepstow
it provides additional employment opportunities to
the local community along with the potential to attract
additional companies to locate there as part of the
MedTech ecosystem
On behalf of the Board
▶ Customers/End users—by working with third parties,
more opportunity for our technology to be used and
improve lives
Richard Rees
Director
▶ Partners, Customers and Suppliers—considered the
need for a balanced relationship whilst not limited
Creo’s ability to work with other partners
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Audit Committee Report
Audit Committee
Report
Introduction
Role and Responsibilities
I am pleased to present the maiden report of the Audit
Committee for Creo Medical Group plc, summarising the
Audit Committee’s role and activities undertaken during the
financial year ended 31 December 2022.
Members of the Audit Committee
The Audit Committee members as at 31 December 2022
are John Bradshaw, Charles Spicer and Ivonne Cantu, each
being independent Non-Executive Directors. The Audit
Committee has been chaired by John Bradshaw since
Creo’s IPO in December 2016.
The Board considers that the members of the Audit
Committee have sufficient competence to understand,
analyse and, when necessary, challenge the management
accounts and public financial statements of the Company:
▶ John Bradshaw is a chartered accountant with more
than 25 years’ experience as a chief financial officer
with venture capital backed and listed companies. Prior
to his retirement in July 2021, John was chief financial
officer of Syncona Investment Management Limited, the
Investment Manager of Syncona Limited, a FTSE 250
listed life sciences investment company.
▶ Charles Spicer is a seasoned non-executive chair and
director, previously being head of Healthcare Corporate
Finance at both Numis Securities and Nomura
International.
▶ Ivonne Cantu has extensive experience in corporate
finance, having acted as a corporate finance adviser to
UK and international companies for more than 20 years
at Cenkos Securities plc and previously Merrill Lynch.
Ivonne is currently director of Investor Relations and
Sustainability at Benchmark Holdings plc.
The Audit Committee has the primary responsibility of:
▶ Reviewing and monitoring the integrity of the financial
statements of the Company (including annual and
interim accounts and results announcements) and the
accounting principles and practice underlying them;
▶ Reviewing internal controls and risk management
systems;
▶ Reviewing changes to accounting policies;
▶ Reviewing and monitoring the extent of the non-audit
services undertaken by external auditors; and
▶ Advising on the appointment of and liaising with the
Company’s auditors.
The role and responsibilities of the Audit Committee are
defined in Terms of Reference (“ToR”) which comply with
the AIM market admission rules. The ToRs are reviewed
annually by the Audit Committee and external advisors to
ensure that they are in line with current market practice
and guidance and remain relevant for the Company. The
ToRs were last updated on 5 May 2021 and are available to
download at www.creomedical.com/investors/corporate-
governance/. A copy will be made available on request
from the Company Secretary.
The Audit Committee maintains an agenda to ensure
that all matters for which the Audit Committee is
responsible are considered during the year. During
2022, the main matters considered by the Audit
Committee included:
▶ Financial statements and Annual Report review
▶ Consideration and review of the external audit report
and management representation letter
▶ Review of the interim results
▶ Going concern assessment and review
▶ Review of the 2022 audit plan
▶ Risk management and internal control systems review
▶ Auditor engagement and meetings (with and without
executive representation present) to discuss the above
▶ Review of the Audit Committee terms of reference
▶ Review of the Company’s Anti-Bribery and Corruption
policy and training procedures
At the end of the meeting, the auditors are given time
without executive representation present to allow the
auditors to raise any concerns directly with the Audit
Committee. No such concerns were raised in the 2022
audit presentation.
The Group does not currently have an internal audit
function, however the need to establish such a function
remains under review.
Risk Management and Internal Controls
The Group has established a framework of risk
management and internal control systems, policies and
procedures. Pages 66 to 69 set out further details on the
Group’s approach to identifying and managing risks.
The Audit Committee is responsible for reviewing the
Group’s risk processes along with the Group’s internal
control framework. The Audit Committee is satisfied that
the risk and internal controls framework are operating
effectively. The Audit Committee is not responsible for the
identification of key risks or the review of the adequacy of
arrangements to mitigate those risks, which remains the
responsibility of the Board.
John Bradshaw
Chair of the Audit Committee
▶ Review of the Company’s whistleblowing policy
▶ Review of the Company’s ESG strategy, materiality
assessment and disclosure plan
The Audit Committee’s activities are reported at
subsequent Board meetings and the minutes of each
meeting are provided to all members of the Board.
Auditors
The Audit Committee monitors the relationship with
the Group’s auditors to ensure that independence and
objectivity are maintained. As part of its review, the
Committee has oversight of the provision of non-audit
services by the external auditors which is underpinned
by a policy requiring Audit Committee approval for any
such services. No non-audit services were provided by the
auditor in the reporting period.
In the usual course, the auditors prepare an audit plan
for the full-year financial statements, setting out the
scope of the audit, areas of special focus, materiality and
audit timetable. The audit plan is presented to the Audit
Committee for review and agreement prior to the audit
work commencing. After the audit of the annual financial
statements, the auditors present their findings to the Audit
Committee for consideration. Along with the findings from
the audit, the presentation includes details of all fees paid
to the auditors by the Group during the reporting period
along with confirmation of the auditor’s independence.
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Directors’ Remuneration Report
Statement from the Chair
of the Remuneration
Committee
Introduction
This report covers the activities of the Remuneration
Committee during the year, the determination of reward
outcomes linked to 2022 and the application of our
remuneration policy in 2023.
In 2022 the Company made good progress towards its main
strategic objectives of achieving commercial adoption of its
core Creo suite of products and developing new distribution
channels for its technology through its robotics partnerships,
while substantially delivering on the financial, commercial
and ESG objectives set at the beginning of the year.
At a macroeconomic level, 2022 was marked by highly
adverse conditions in the global geopolitical and economic
environment which significantly affected the financial
markets in the UK and globally. Smaller growth companies
in particular were affected by a change in investor sentiment
which constrained the Company’s ability to pursue an
anticipated fundraising to support its ongoing strategy. This
resulted in a material deterioration in the Company’s share
price contrasting with the Company’s solid performance
and strategic progress in the year which will drive long term
shareholder value.
The Committee acknowledged the resulting experience for
shareholders and the impact on the incentive plans in place
for the Executive Directors and employees.
Post period end, the Company successfully completed the
planned equity fundraising despite prevailing challenging
market conditions, raising £32m which places the Company
in a solid position to continue to execute on its strategy to
achieving profitability.
Activities of the Committee during the year
The Remuneration Committee’s principal objective is to
implement a remuneration policy which promotes the long-
term success of the Company and is aligned to the interests
of the Company’s shareholders and other stakeholders
including its patients, customers and employees. In meeting
this objective, the Committee welcomes engagement with
all its stakeholders. During the year the Committee met with
some of the Company’s major shareholders to discuss their
views on our remuneration arrangements. We are grateful
for the valuable input we received which has been taken
into consideration in the review and implementation of our
directors’ remuneration policy and in the disclosure in this
report. We shall continue to engage with our shareholders
and other stakeholders on remuneration matters.
Review of the Directors’ remuneration policy and
disclosure
During the year the Committee undertook a review of the
Directors Remuneration Policy (the “Remuneration Policy”)
and its implementation. The remuneration policy has been
designed to adhere to the corporate governance principles
set out in the QCA (Quoted Companies Alliance) Code and
guidelines taking into consideration the latest market and
governance developments. The Committee also undertook
a review of the disclosure in the remuneration report with a
view to enhance transparency. In conducting these reviews,
we sought independent advice from our external adviser,
FIT Remuneration Consultants LLP (“FIT Remuneration”),
as well as consulting with some of our main shareholders as
referenced above. We also took into account the principles
of the major proxy voting agencies.
Following the review, the Committee has decided to make
certain changes to how we implement the remuneration
policy. These include applying a higher weighting to
the financial KPI’s for the purposes of the annual bonus
measures and targets, and adopting forward-looking
performance measures and targets to determine the vesting
of share awards made under the Long-Term Incentive Plan
(LTIP). This is described in detail further below. We have also
increased transparency in our remuneration disclosure.
Overview of the remuneration policy
The Remuneration Committee determines pay for the
Company’s four Executive Directors. The Committee
applies a remuneration policy including four components:
salary, benefits and pension, an annual bonus subject to
performance conditions and an annual share-based long-
term incentive award subject to performance conditions.
In implementing the policy, the Committee seeks to ensure
a close link between pay outcomes, Group and individual
performance, and shareholder value creation. On an annual
basis the Committee conducts a benchmarking review of
the Executive Directors’ pay with the support of its external
remuneration adviser. In addition, the Committee takes
into consideration the views of our shareholders and the
remuneration for the broader Group.
The annual bonus scheme for Executive Directors allows
for up to 100% of salary to be paid based on the successful
delivery against financial, commercial, strategic and ESG
objectives. In 2022 financial objectives included revenue and
cost control; commercial objectives included the adoption of
Creo core products in the market measured by the number
clinical sites using Creo products and the total number of
regular users, and strategic objectives included delivery
against milestones for Company’s robotics partnership
programme. Further detail on the 2022 measures and
targets is presented below.
LTIP and share ownership across the Group
Creo Medical seeks to promote an entrepreneurial culture
guided by five values: collaborative, creative, disruptive,
“can-do” and life-changing patient outcomes. Aligned to
this culture, the Company encourages share ownership
including through share-based incentive arrangements
for senior management delivered through a Long Term
Incentive Plan (“LTIP”), and share ownership plans across
the Group including an all-employee HMRC approved SIP.
The remuneration policy encourages that the Executive
Directors build and maintain a shareholding equivalent to
at least 100% of salary. Three of the four Executive Directors
meet this criteria.
Executive Directors can be awarded annual share-based
incentives of up to 100% of salary through a long-term
incentive plan.
Early in its development the company implemented a long
term incentive plan across the workforce which has been a
key driver behind recruitment and retention, in particular in
the early years.
The Company’s LTIP is operated through a joint share
ownership plan (“JSOP”) structure implemented in 2020,
whereby the participant and a trustee jointly own the
beneficial interest in the LTIP shares under award. The
participant is entitled to any value above a share price hurdle
set relative to and higher than the share price on the date of
award. The trustee is entitled to the value below the hurdle.
The participant also has a nominal cost option over the
trustee interest. Both elements vest after three years and
three months subject to continuing employment. Further
information on the operation of the JSOP is included in the
table below on page 112.
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To date, LTIP awards have been based on pre-grant
performance conditions on the same basis as the annual
bonus, that is by reference to delivery against certain targets
in the year prior to grant with vesting subject to retention.
For example, in 2021 the annual bonus was 67% of salary,
and therefore the face value of the LTIP award was also 67%
of salary. The award is priced relative to the share price on
the grant date and is subject to a three year vesting period
incentivising Management to deliver long term share price
accretion and shareholder returns.
Going forward we intend to incorporate, in addition to
continued service, forward-looking performance measures
as conditions for vesting and fix the normal grant level at
a consistent rate as a percentage of salary and de-link it
from the level of annual bonus. This change represents
a natural evolution of the LTIP plan as the Company fully
enters a commercial phase resulting in increased financial
visibility. Further details of the LTIP and of the other elements
of the Directors’ remuneration policy are set out on pages
112 to 113.
Performance and remuneration outcomes
for FY2022
The Remuneration Committee assessed the performance
outturn for the annual bonus against the objectives set at
the start of the year. The Company substantially met its
targets in full as set out in the table below with an output
against targets of 95%. The Committee was conscious
of the need to appropriately recognise the achievements
of the management team while considering the overall
experience of shareholders over the past 12 months. Taking
this into account and acting in consultation with the CEO,
the Committee has used its discretion to apply a reduction
in the annual bonus outturn for the Executive Directors
from 95% to 50% of salary. (FY2021: 67% of maximum (i.e.
67% of salary)). LTIP awards granted in FY2022 were made
based on pre-grant conditions mirroring the annual bonus
scheme for 2021 achievement. On this basis, in April 2023,
the Remuneration Committee granted an LTIP award to the
Executive Directors equivalent to 67% of salary in line with
the annual cash bonus. No salary increases were awarded to
Executive Directors in the year or in the prior year.
Annual Bonus – Metrics Used and Weighting
METRICS
Financial
▶ Total revenue and revenue from Creo core products
▶ Expenditure control
Commercial adoption of Creo core products
▶ Number of regular users and clinical sites using core Creo technologies
WEIGHTING
FORMULAIC OUTPUT
30%
Met in full
30%
Nearly met in full
Salary and benefits
Strategic
30%
Nearly met in full
▶ Signing of robotics partnership agreements and delivery against milestones
▶ Acquisition integration
ESG
▶ Delivery against ESG programme goals
10%
Met in full
Total
100%
95%
The alignment of the Executive Directors’
remuneration and that of all employees
across Creo Medical
With input from the Group’s Head of People and the CEO,
the Committee reviewed and discussed the approach
to reward for all employees across the business and the
alignment with the Executive Director’s remuneration and
with the Company’s strategy, targets and culture. We seek to
ensure that measures, targets and remuneration structures
are cascaded through the business as appropriate and
that the culture of pay for performance is translated across
the organisation. In 2022, c.35% of employees received a
bonus based on the achievement of objectives aligned to
the Company’s overall targets and c.48% of employees
participated in share option and/or share incentive plans at
31 December 2022. In addition 63% of eligible employees
participated in the UK HMRC approved SIP during the year.
Cost of Living Crisis
Taking into account the macroeconomic backdrop, targeted
cost of living increases were implemented for those most
in need. The company did not implement a company wide
scheme to address the wider impact of the cost of living
crisis in 2022 due to the cash constraints in the business
and this will need to be addressed in 2023. The average
salary increase across all employees in the Group was 3.7%.
This percentage also includes adjustments for increased
responsibilities. No salary increases were awarded to
Executive Directors in the year.
How the policy will be applied for FY2023
The Company aims to conduct an annual review of salary
and benefits across the Group with salary increases
implemented in the second half of the year. This enables
the Company to have sufficient visibility of the Company’s
performance for the year and affordability. As mentioned
above in 2022 salary increases were limited to employees
most affected by the cost of living crisis and certain
adjustments related to increased responsibilities leaving
gaps that need to be addressed. In 2023 the Company
intends to implement tiered salary increases to address
the inflationary environment and cost of living pressures
providing more support to those employees on lower
salaries and awarding lower salary increases to those on
higher salaries including the Executive Directors.
Annual bonus
The maximum bonus opportunity for the Executive Directors
will be split between financial, strategic and ESG objectives.
In 2023 a greater weighting of 60% will be applied to
financial objectives (2022: 30%). This change reflects the
stage of development of the Company and engagement with
shareholders during the year.
LTIP Awards
Our policy allows for LTIP awards of up to 100% of salary. In
2023 we intend to evolve the LTIP by incorporating forward
looking performance criteria including TSR, and an annual
grant as a fixed percentage of salary. We plan to transition
the framework over two years. In line with our policy, awards
will have a three year vesting period and vesting will be
subject to continued service and performance criteria being
met. A holding period of two years applies from the date of
vesting. We intend to engage with our largest shareholders
on the changes that we plan to make in FY2023.
Share dilution
The total number of ordinary shares issued and issuable in
respect of options granted in any ten-year period under the
Company’s discretionary share option is restricted to 10% of
the issued ordinary shares in any ten-year rolling period. In
the financial year ended 31 December 2022, the Company
allocated 1,537,212 options on 4 August 2022 (1% of issued
share capital as at such date of grant to employees including
Executive Directors. Following the equity raise conducted
post period end the total number of ordinary shares issued
and issuable in respect of options granted is 7% of the
Company’s issued shares.
Summary
We seek and welcome engagement with our shareholders
and other stakeholders and are grateful for the level of
shareholder engagement in 2022. I hope that this report
provides greater insight into the Committee’s remit as well
as greater transparency on the remuneration framework and
the way we apply our policy to achieve alignment between
business performance, stakeholder interests and reward
outcomes.
111
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Directors’ Remuneration Report…Continued
COMPONENT
PURPOSE AND
LINK TO STRATEGY
OPERATION
MAXIMUM
LINK TO
OPPORTUNIT Y
PERFORMANCE
▶ Strategic alignment - the Company’s remuneration
arrangements are designed to support Creo Medical’s
business objectives and strategy, to align with the
Company’s values and entrepreneurial culture, and to
ensure a close link between pay outcomes and Group
and individual performance.
In designing and implementing the remuneration policy, the
Remuneration Committee adheres to principles of corporate
governance appropriate for an AIM company of Creo’s size
and maturity as set out in the QCA Code. The Committee
also considers the views of shareholders on pay and the
feedback received informs its decision-making. The 2022
Directors’ remuneration policy is shown below.
Directors’ remuneration policy
Objectives and principles
The principal objective of the Directors’ remuneration policy
is to promote the long-term success of the Company. It is
guided by the following key principles:
▶ Competitive and fair - remuneration packages should
be competitive but not excessive when compared with a
relevant peer group and should be sufficiently attractive
to recruit, retain and motivate individuals of the requisite
calibre to deliver long-term success;
▶ Simple - remuneration packages should be clear and
communicated transparently
▶ Aligned to performance and stakeholder interests - a
significant proportion of remuneration should be based
on performance-related components with potential
rewards subject to the achievement of challenging
performance targets linked to the Group’s KPIs and to the
best interests of shareholders and other stakeholders
Key Elements of Policy for Executive Directors
COMPONENT
PURPOSE AND
LINK TO STRATEGY
OPERATION
MAXIMUM
OPPORTUNIT Y
LINK TO
PERFORMANCE
Base
Salary
To provide a
competitive base
salary to attract
and retain high
calibre executives
Reviewed annually or on a significant
change
of responsibilities and typically takes
effect from
1 January.
Salaries are determined by reference
to the skills, role and personal
performance of the individual.
The Committee takes into account
external market data and pay and
employment conditions elsewhere
in the Group when considering
increases to base salary levels.
Although there
are no formal
performance
conditions, any
increase in base
salary is only
implemented
after careful
consideration
of individual
contribution and
performance.
Increases will normally be broadly
in line with the range awarded (in
percentage of salary terms) to the
wider workforce.
Increases above this level may
apply to take into account individual
circumstances, e.g. a change in
scope or responsibilities of the
role, a change in market practice, a
change in the size/complexity of the
business, or to reflect development
and performance in role.
Internal and external reference
points including market salaries for
comparable organisations may also
be taken into account.
Benefits
Pension
To provide
broadly market
competitive
benefits as
part of the total
remuneration
package
To aid recruitment
and retention
by providing
long-term savings
to support
retirement
planning
Annual
bonus
To incentivise the
delivery of annual
objectives
Long-
term
incentive
To drive superior
performance of
the Company
and delivery of
short- and long-
term objectives,
aid retention and
align directors’
interests with
those of the
Company’s
shareholders
Other benefits may include car allowance, health-related life
= cover and death in service insurance.
Not
applicable
None
For external and internal appointments or relocations, the
Company may pay relocation costs
10% of
salary
None
Awards are based on performance measured over one year.
Pay-out levels are determined by the Committee after the year end
based on performance against pre-set targets.
Discretion will apply, enabling the Committee to adjust the bonus
outcome upwards or downwards where the formulaic outcome is,
in the view of the Committee, not a fair and accurate reflection of
business performance.
Capped at
100% of
salary.
Pay-outs are
based on an
assessment of
performance
against
defined
financial,
commercial,
strategic
and ESG
objectives.
The Creo Medical LTIP is made up of two elements: (i) a JSOP
award subject to a share price hurdle and (ii) a nominal cost
option over the trustee interest in the JSOP shares.
Both elements vest after three years and three months subject to
continued employment and performance conditions.
The nominal cost option gives the participant the opportunity to
receive the value of the underlying shares, e.g. even if the share
price hurdle is not reached.
Following vesting:
▶ JSOP award may be split and resulting shares sold
▶ Employee may exercise nominal cost option over remaining
trustee shares
Key features of the JSOP element:
▶ Intended to deliver value to the participant (on a tax-efficient
basis) if the share price exceeds a specified hurdle, e.g. £2.50
for the 2020-23 awards.
▶ Employee, together with a third party (the “co-owner” e.g. an
employee trust) jointly acquires the entire beneficial interest in
shares.
▶ The co-owner and the employee each sign a “joint ownership
agreement” setting out how the proceeds of sale will be split
between them when the shares are eventually sold.
▶ The value below the hurdle is not tax advantaged and any
amount below this will incur full NI and PAYE. Any value above
the hurdle will be tax advantaged.
▶ The Company may settle any upfront PAYE and NIC liabilities
associated with participation in the JSOP on behalf of the
directors with the cost to the Company recovered from any
future LTIP option exercises
113
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Directors’ Remuneration Report…Continued
Consideration of employment conditions
elsewhere in the Group
In setting remuneration for the Executive Directors, the
Committee takes note of the overall approach to reward for
employees in the Group. The Global HR Director updates
the Remuneration Committee annually on remuneration
arrangements and trends across the Group.
The main principles of remuneration are cascaded through
the Company, taking into account seniority and market
practice. Key features include:
▶ The Company aims to provide market competitive levels
of remuneration across the workforce in order to recruit
and retain high calibre employees at all levels;
▶ The Company aim to sustain and promote a culture
of share ownership. Share-based long-term incentive
awards are made to a significant proportion of employees.
In addition, UK employees have the opportunity to
participate in HMRC-approved employee share scheme
arrangements (with similar plans subject to local tax
and regulatory environments offered to all employees
worldwide); and
▶ senior managers participate in annual bonus
arrangements based on Group and personal
performance. At senior levels, the proportion of
remuneration which is long-term is higher than it is for
other colleagues and more ‘at risk’, with an increased
emphasis on performance-related pay and share-based
remuneration. c.25% of employees participate in an
annual discretionary bonus plan with bonus potential
determined based on delivery against Company and
personal objectives.
The Remuneration Committee regards the widespread
use of share-based arrangements as a key plank of the
remuneration policy. This ensures all employees are offered
the opportunity to participate in the long-term success of
the business while aligning their interests to those of our
shareholders and other stakeholders. Since before the IPO
in 2016 we have had an LTIP for all staff. The Creo Medical
LTIP implemented in FY2020 is currently intended to be the
primary vehicle for making long-term incentive awards using
the CSOP scheme for awards to most staff and the JSOP
Scheme used for the Executive Directors and other senior
managers.
Service contracts
Executive Directors are employed under contracts which
may be terminated by either party on no more than 12
months’ notice.
Remuneration policy for the Chair and the
Non-Executive Directors
The Chair and the Non-Executive Directors are employed
on letters of appointment which have an initial term of one
year and then which may be terminated at any time by either
party with three months’ notice.
The remuneration of the Chair is set by the Remuneration
Committee and the remuneration of the Non-Executive
Directors is set by the Executive Directors of the Board. No
individual is involved in the determination of their own pay.
Neither the Chair nor the Non-Executive Directors receive
awards under Creo Medical’s incentive schemes. Charles
Spicer and John Bradshaw were awarded share options prior
to the Company’s IPO in 2016 and have not been awarded
share options since.
Annual Report on Remuneration
Remuneration Committee membership
and responsibilities
During the year ended 31 December 2022 the Remuneration
Committee comprised Ivonne Cantu (Chair) and John
Bradshaw. By invitation of the Committee, meetings are also
attended by the CEO, CFO, the Company Chair, the General
Counsel and the Global HR Director, who are consulted on
matters discussed by the Committee, unless those matters
relate to their own remuneration.
The Company continues to seek professional, independent
advice from FIT Remuneration Consultants LLP. FIT has no
connection to the Company or its Directors other than in
relation to advice provided to the Remuneration Committee.
The key responsibilities of the Remuneration Committee
are to set a remuneration policy for the Executive Directors
and the Chair and to review and determine on behalf of
the Board the Chair’s fee and specific remuneration and
incentive packages for each of the Company’s Executive
Directors to ensure that they are fairly rewarded for
their individual contributions to the Company’s overall
performance. The Remuneration Committee assesses the
performance of the Executive Directors in the context of
recommending their annual remuneration to the Board for
final determination, including annual bonus awards and
long-term incentive grants.
The remuneration of the Non-Executive Directors (other than the Chair) is recommended by the Executive Directors and
takes account of the time spent on Board and Committee matters. The Board will make the final determination although no
Director will participate in any discussion about their own remuneration.
Actions and decisions undertaken by the Committee during the year:
▶ conducted a review of the Company’s remuneration policy and disclosure;
▶ engaged with and sought the views of major shareholders on remuneration matters;
▶ reviewed market benchmark analysis for the executive director roles;
▶ undertook a review of the remuneration policy in light of the above;
▶ reviewed and approved the remuneration packages for our current executive directors;
▶ approved the annual bonus outcomes for FY2021 and the annual bonus plan for FY2022; and
▶ approved the terms of the LTIP grant for FY2022.
Directors’ remuneration for 2022 (audited)
The remuneration of the Board of Directors of Creo Medical Group plc during the 12-month period ending
31 December 2022 was:
(ALL FIGURES £)
EXECUTIVE
SALARY
TAXABLE
BENEFITS
PENSION
ANNUAL
BONUS1
LTIP2
OTHER3
31 DECEMBER
31 DECEMBER
12 MONTHS TO
12 MONTHS TO
2022
20214
Professor Christopher Hancock
210,000
22,280
21,000
105,000
153,590
1,894
513,764
1,030,207
Craig Gulliford
280,000
22,133
28,000
140,000
204,787
2,525
677,445
1,223,637
Richard Rees
David Woods
210,000
21,910
21,000
105,000
153,590
1,894
513,394
894,661
262,210
36,775
13,111
134,281
164,642
-
611,019
557,162
Total Executive
962,210
103,098
83,111
484,281
676,609
6,313
2,315,622
3,705,666
NON-EXECUTIVE
Charles Spicer
John Bradshaw
Ivonne Cantu
86,000
56,000
56,000
Total Non-Executive
198,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
86,000
86,000
56,000
56,000
56,000
56,000
198,000
198,000
Total Directors’ Remuneration
1,160,210
103,098
83,111
484,281
676,609
6,313
2,513,622
3,903,666
1
Annual bonus for performance for the year ending 31 December 2022. The payments reflected the Remuneration Committee’s assessment of performance versus the targets set at
the beginning of the year of 95% after applying discretion
2 Value relates to the options which have vested during the period at the share price on the vesting date net of the exercise price required to obtain the shares. In prior years we have
reported the IFRS2 Share Based Payments charge as the value for the shares during the period. However this year we have elected to follow the regulations for quoted companies on
the Main Market show the value of shares vested during the period where performance conditions are present and on date of grant where only a service condition exists.
The LTIP award is structured as a joint share ownership plan whereby the Participant and the Trustee jointly own the beneficial interest of the LTIP Shares. The Participant is entitled
to any value above the hurdle price of £2.50 per share and the Trustee entitled to all value below the hurdle price. The Participant has also been granted an option to acquire
the Trustee’s beneficial interest in the LTIP Shares, at nominal cost, which is exercisable three years and three months after the acquisition date (subject to remaining in eligible
employment) and followed by a three-month holding period.
3 Value relates to the upfront PAYE and NIC costs associated with participation in the JSOP which were paid by the Company during the year to settle the liabilities on behalf of the
directors. The cost to the Company will be recovered from any future LTIP option exercises.
4 The prior year disclosure was based on the IFRS 2 charge, has been revised to show the prior year LTIP calculated based on the value of vesting shares in 2021 at the share price on
the vesting date, the revised values were as follows: Professor Chris Hancock £329,010 (prior year £361,329), Craig Gulliford £426,891 (prior year £392,826), Richard Rees £329,010
(prior year £284,839) and David Woods £1,302 (prior year £83,970).
115
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Directors’ Remuneration Report…Continued
Directors’ shareholdings
The interests of the Directors at 31 December 2022 in the shares of the Company, including family interests, were:
(ALL FIGURES £)
31 DECEMBER 2022 NUMBER
31 DECEMBER 2022 %
Executive
Professor Christopher Hancock
Craig Gulliford
Richard Rees
David Woods
Total Executive
Non-Executive
Charles Spicer
John Bradshaw
Ivonne Cantu
Total Non-Executive
Total Directors’ Shareholdings
4,405,741
617,032
77,146
25,000
5,124,919
143,411
105,947
-
249,358
5,374,277
2.43%
0.34%
0.04%
0.01%
2.82%
0.08%
0.06%
0.00%
0.14%
2.96%
Directors’ interests in LTIP awards and share options
Directors’ interests in share options, granted under either the Creo Medical Group plc Enterprise Management Incentive Share
Option Scheme or the Creo Medical Group PLC Unapproved Share Option Scheme, and interests in awards granted under the
Creo Medical Group plc LTIP, at 31 December 2022 were:
(ALL FIGURES £)
EXECUTIVE
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
Prof. Christopher Hancock
31 DECEMBER 2021
GRANTED
FORFEITED
EXERCISED
31 DECEMBER 2021
VESTED BUT
EXCERCISED
NUMBER
DURING YEAR
DURING YEAR
DURING YEAR
NUMBER
UNEXCERCISED
PRICE
417,240
72,000
1,184,210
107,914
268,293
114,035
115,000
210,000
2,348,288
-
-
-
-
-
-
-
-
-
-
184,645
4,836,980
184,645
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
417,240
72,000
1,184,210
107,914
268,293
114,035
115,000
210,000
2,348,288
184,645
417,240
72,000
1,184,210
107,914
268,293
114,035
-
-
-
-
5,021,625
2,163,692
16.67p
16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p
0.01p
0.01p
31 DECEMBER 2021
GRANTED
FORFEITED
EXERCISED
31 DECEMBER 2021
VESTED BUT
EXCERCISED
NUMBER
DURING YEAR
DURING YEAR
DURING YEAR
NUMBER
UNEXCERCISED
PRICE
(ALL FIGURES £)
EXECUTIVE
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
David Woods
David Woods
540,000
936,000
1,578,948
143,885
325,203
143,275
140,000
280,000
1,553,658
-
-
-
-
-
-
-
-
-
-
246,194
5,640,969
246,194
288,000
1,184,210
118,705
268,293
114,035
115,000
210,000
731,519
-
-
-
-
-
-
-
-
-
184,645
3,029,762
184,645
130,208
-
219,816
130,208
219,816
Total Executive
13,637,919
835,300
NON-EXECUTIVE
Charles Spicer
John Bradshaw
John Bradshaw
Ivonne Cantu
118,421
27,000
78,947
105,947
-
Total Non-Executive
224,368
-
-
-
-
-
-
Total Directors’ Shareholdings
13,862,287
835,300
Ivonne Cantu
Chair of the Remuneration Committee
25 April 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,000
78,947
105,947
-
105,947
540,000
936,000
1,578,948
143,885
325,203
143,275
140,000
280,000
1,553,658
246,194
540,000
936,000
1,578,948
143,885
325,203
143,275
-
-
-
-
5,887,163
3,667,311
288,000
1,184,210
118,705
268,293
114,035
115,000
210,000
731,519
184,645
288,000
1,184,210
118,705
268,293
114,035
-
-
-
-
3,214,407
1,973,243
130,208
219,816
350,024
-
-
-
16.67p
16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p
0.01p
0.01p
16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p
0.01p
0.01p
0.00p
0.00p
105947
14,591,640
8,028,614
118,421
118,421
76.00p
-
-
-
-
-
-
-
-
-
118,421
21.39p
76.00p
-
105,947
14,591,640
7,922,667
117
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Financial
Statements
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Independent auditors’ report to the members of Creo Medical Group plc
Report on the audit of the financial statements
Opinion
In our opinion:
X Creo Medical Group plc’s group financial statements and parent company financial statements (the “financial statements”) give a true and
fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2022 and of the group’s loss and the group’s
cash flows for the year then ended;
X the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied
in accordance with the provisions of the Companies Act 2006;
X the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
X the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
The key audit matters below are consistent with last year.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and Parent Company
statements of financial position as at 31 December 2022; the Consolidated statement of profit or loss and other comprehensive income, the
Consolidated and Parent Company statements of changes in equity and the Consolidated statement of cash flows for the year then ended;
and the notes to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to other listed entities of public interest, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
We have provided no non-audit services to the parent company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
X The UK Group audit team has performed full scope audit work over the four largest entities whose accounting records are based in the UK
i.e Creo Medical Group Plc, Creo Medical Limited, Creo Medical Inc and Creo Medical UK Limited.
X Creo Medical SAS and Creo Medical SRL were audited by local PwC component teams in France and Belgium respectively.
X Specified procedures were performed over Creo Medical S.L by the local PwC component teams in Spain.
X Specified procedures were then performed by the UK Group audit team over the remaining reporting units, not selected for full scope audits.
X Further audit procedures were carried out by the UK Group audit team over central functions, the group consolidation and consolidation
journals
X Our scoping resulted in coverage of 98% of the Group’s revenue, 90% of the Group’s net assets and 92% of the Group’s loss before tax.
Key audit matters
X Goodwill impairment assessment (group)
X Recoverability of the parent company investment in subsidiaries and intercompany receivable balance (parent)
Materiality
X Overall group materiality: £1,549,000 (2021: £1,459,000) based on 5% of Group’s loss before tax.
X Overall parent company materiality: £1,472,000 (2021: £600,000) based on 1% of the parent company’s net assets, restricted to 95% of
Group materiality.
X Performance materiality: £1,162,000 (2021: £1,094,000) (group) and £1,104,000 (2021: £450,000) (parent company).
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment (group)
As at 31st December 2022, the Consolidated statement of financial
position includes £19.6m of goodwill (2021: £18.6m).
In accordance with International Accounting standards, management
has performed impairment reviews in relation to the goodwill held in
each of the Group’s cash generating units (CGUs). Management has
prepared value in use calculations for each of the CGUs.
The impairment reviews include significant estimates and
judgements in respect of future growth rates, cash flows and
discount rates. The sensitivity of these key assumptions is detailed
in note 12, Intangible assets and goodwill.
As part of our assessment of the carrying value of goodwill we have:
• Held discussions with management to identify the key
judgements and estimates in relation to the impairment
assessments at the year end.
• Agreed the impairment models to the FY23 strategic plan and
tested the mathematical accuracy of the model.
• Challenged management as to whether the forecast Revenues
and EBITDA margins are reasonable by comparing them
to historical trends and by considering the accuracy of
management’s forecasting in the past.
• Reviewed management’s allocation to CGUs and agreed carrying
values to underlying support. Understood management’s
consideration of wider risks including climate change.
• Challenged the key assumptions identified, including
consideration of the impact of changes to these assumptions on
headroom under different scenarios, such as restrictions to future
growth levels and changes to discount rates.
• Used our in-house valuation experts to consider the
appropriateness of the discount rate used in relation to the wider
market and sector comparatives.
Based on our audit work performed, we concur with the results
of the impairment assessment performed. We consider that
the carrying value of goodwill is materially correct and that the
disclosures in the financial statements are appropriate.
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Independent auditors’ report …continued
Key audit matter
How our audit addressed the key audit matter
Recoverability of the parent company investment in
subsidiaries and intercompany receivable balance (parent)
As at 31st December 2022, the Parent Company’s statement of
financial position includes investments of £27.4m (2021: £26.8m)
and intercompany receivables of £118.9m (2021: £89.1m).
In accordance with International Accounting standards, at the
end of each reporting period management are required to assess
whether there is any indication that the investment/receivable value
may be impaired.
Management has identified an indicator of impairment due to a
decline in market capitalisation of the Group during the year to
31 December 2022. Accordingly, management has prepared an
impairment assessment. The impairment assessment compares the
carrying value to the recoverable amount, which is calculated as the
higher of the value in use and the fair value less costs to sell.
Management has performed a value in use calculation, based on
the long-term business plan. Management have also considered
the average market capitalisation of the Parent Company over
the past 12 months and changes since the balance sheet date.
The recoverable amount, based on using the higher of these two
models shows that there remains headroom over the net assets of
the Parent Company. There is complexity and judgement involved
in calculating the valuation of the investments and recoverability
of the intercompany receivable. The key estimate in regard to
the value in use calculation and recovery of the receivable is the
revenue growth over the next 5 years.
To assess the recoverability of the investment in subsidiary and the
intercompany receivable balance, we have obtained managements
Value In Use workings. We have challenged key inputs and assessed
managements methodology including:
• Verifying the accuracy of the underlying calculations and agreeing
cash flow forecasts to the long term strategic plan. Evaluating
the appropriateness of forecast cash flows by understanding
management’s process for forecasting and examining support.
• Evaluating the appropriateness of projected growth rates and
considered the impact of restrictions to future growth.
• Consideration of prior year and current performance in
comparison to projected results.
• Consideration of sensitivity analysis to assess the impact of
changes in key assumptions.
• Evaluating the appropriateness of the discount rate including
comparison to the wider market.
Based on our work performed, we consider the carrying value of
investment in subsidiaries and intercompany receivables to be
materially correct with no impairment being required.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the group and the parent company, the accounting processes and controls, and the industry in
which they operate.
Of the Group’s 12 reporting components, 3 are considered to be financially significant to the group. 3 further components were selected for
full scope audit work to ensure appropriate coverage over revenue and loss before tax. The Group engagement team also audited the parent
company, which was scoped in accordance with the company materiality.
Specified procedures were also performed by the UK Group audit team over the remaining reporting units, not selected for full scope audits.
Further audit procedures were carried out by the UK Group audit team over central functions, the group consolidation and consolidation
journals.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – parent company
Overall materiality
£1,549,000 (2021: £1,459,000).
£1,472,000 (2021: £600,000).
How we determined it
5% of Group’s loss before tax
1% of the parent company’s net assets, restricted to 95% of
Group materiality
Rationale for
benchmark applied
Overall materiality is based on loss before
tax. This is a primary measure used by
shareholders and is a generally accepted
auditing benchmark
We determined materiality based on net assets (capped at
95% as part of group scoping), which is more applicable than a
performance- related measure as the parent company is primarily
a Holding company and therefore does not have any revenue.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of
materiality allocated across components was £230,000 to £1,468,000. Certain components were audited to a local statutory audit materiality
that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to £1,162,000 (2021: £1,094,000) for the group financial
statements and £1,104,000 (2021: £450,000) for the parent company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £77,000 (group
audit) (2021: £73,000) and £74,000 (parent company audit) (2021: £30,000) as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the going concern basis of
accounting included:
X Evaluation of management’s going concern assessment and related disclosure in the financial statements.
X Evaluation of the Group’s forecast financial performance,liquidity and covenant compliance over the going concern period.
X Evaluation of stress testing performed by management in their downside scenario and consideration of whether the stresses applied are
Our scoping resulted in coverage of 98% of the Group’s revenue, 90% of the Group’s net assets and 92% of the Group’s loss before tax.
appropriate for assessing going concern
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the group’s and parent
company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. Our
procedures did not identify any material impact as a result of climate risk on the group’s and parent company’s financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the parent
company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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Independent auditors’ report …continued
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon.
The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ Report
for the year ended 31 December 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the directors are responsible
for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to AIM Listing Rules and employment legislation, and we considered the extent to which non-compliance might have a material
effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements
such as financial reporting regulations, tax legislation and Companies Act 2006. We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks
were related to the posting of journal entries designed to increase revenue or to extract cash, together with the manipulation of accounting
estimates which could be subject to management bias. The group engagement team shared this risk assessment with the component auditors
so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the group
engagement team and/or component auditors included:
X Confirmation and enquiry with management and those charged with governance over compliance with laws and regulations, including
consideration of actual or potential litigation and claims.
X Reviewing board minutes for evidence of breaches of regulations or instances of actual or suspected fraud.
X Challenging assumptions made by management in its significant accounting estimates.
X Identifying and testing the validity of journal entries, in particular any journal entries posted with unusual account combinations.
X Designing audit procedures to incorporate unpredictability around the nature, extent and timing of our testing.
X Reviewing financial statement disclosures
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a
conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the parent company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
X we have not obtained all the information and explanations we require for our audit; or
X adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
X certain disclosures of directors’ remuneration specified by law are not made; or
X the parent company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Jason Clarke (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff
25 April 2023
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Creo Medical Group plc – 2022 Annual Report & Accounts
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
for the 12-month period ended 31 December 2022
31 December 2022
(All figures £’000)
Note
12 months to
31 December
2022
12 months to
31 December
2021
Revenue
Cost of sales
Gross profit
Other operating income
Administrative expenses
Operating loss
Finance expenses
Finance income
Loss before tax
Income tax credit
Loss for the year
Exchange gain/(loss) on foreign subsidiary
Changes to the fair value of equity investments at fair value through other comprehensive
income
Total other comprehensive income (expense)
Total comprehensive loss for the year
Loss per Share
Basic and diluted (£)
The notes on pages 130 to 164 form part of the financial statements.
2
2
9
9
3
10
21
18
27,169
(14,047)
13,122
51
(43,929)
(30,756)
(287)
66
(30,977)
4,041
25,161
(13,576)
11,585
52
(41,544)
(29,907)
(463)
31
(30,339)
5,744
(26,936)
(24,595)
1,166
(1,896)
388
1,554
231
(1,665)
(25,382)
(26,260)
11
(0.15)
(0.15)
(All figures £’000)
Assets
Non-current assets
Intangible assets
Goodwill
Investments
Property, plant and equipment
Deferred tax
Other assets
Current assets
Inventories
Trade and other receivables
Tax receivable
Cash and cash equivalents
Total assets
Shareholder equity
Called up share capital
Share premium
Merger reserve
Share option reserve
Foreign exchange reserve
Financial assets at fair value through other comprehensive income
Accumulated losses
Total equity
Liabilities
Non-current liabilities
Interest-bearing liabilities
Deferred tax liability
Provisions
Current liabilities
Interest-bearing liabilities
Trade and other payables
Non interest-bearing loans
Other liabilities
Provisions
Total liabilities
Total equity and liabilities
12 months to
31 December
2022
12 months to
31 December
2021
Note
12
12
18
13
16
15
14
15
10
21
21
21
21
21
18
21
19
16
20
19
17
17
17
20
8,080
19,563
2,122
10,184
1,548
153
41,650
9,325
6,765
4,500
13,097
33,687
75,337
182
149,516
13,603
9,338
(1,159)
619
(122,696)
8,692
18,563
1,733
8,603
1,705
146
39,442
8,504
4,830
4,299
43,534
61,167
100,609
181
149,448
13,603
7,940
(2,325)
231
(95,760)
49,403
73,318
6,067
2,000
384
8,451
4,029
9,000
1,587
2,622
245
17,483
25,934
75,337
5,175
1,786
593
7,554
3,705
9,921
1,676
4,221
214
19,737
27,291
100,609
These financial statements on pages 126 to 164 were approved by the Board of Directors on 25 April 2023 and were signed on its behalf by:
Richard Rees
Director
Company registered number: 10371794
The notes on pages 130 to 164 form part of the financial statements.
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Creo Medical Group plc – 2022 Annual Report & Accounts
Consolidated statement of changes in equity
Consolidated statement of cash flows
for the 12-month period ended 31 December 2022
for the 12-month period ended 31 December 2022
(All figures £’000)
Called up
share
capital
Accumulated
losses
Share
premium
Merger
reserve
Share
option
reserve
Balance at 1 January 2020
150
(50,849)
115,112
13,603
4,648
Total comprehensive loss for the year
Loss for the financial year
Other comprehensive (loss)/income
Total comprehensive loss
Transactions with owners, recorded
directly in equity
Issue of share capital
Equity settled share-based payment
transactions
–
–
–
8
–
(20,316)
–
(20,316)
–
–
–
–
–
152
–
–
–
–
–
–
–
–
–
–
728
Balance at 31 December 2020
158
(71,165)
115,264
13,603
5,376
Total comprehensive loss for the year
Loss for the financial year
Other comprehensive (loss)/income
Total comprehensive (loss)/income
Transactions with owners, recorded
directly in equity
Issue of share capital
Equity settled share-based payment
transactions
Balance at 31 December 2021
Total comprehensive loss for the year
Loss for the financial year
Other comprehensive income
Total comprehensive (loss)/income
Transactions with owners, recorded
directly in equity
Issue of share capital
Equity settled share-based payment
transactions
–
–
–
23
–
181
–
–
–
1
–
(24,595)
–
(24,595)
–
–
–
–
–
34,184
–
–
–
–
–
–
(95,760)
149,448
13,603
(26,936)
–
(26,936)
–
–
–
–
–
68
–
–
–
–
–
–
–
–
–
–
2,564
7,940
–
–
–
–
1,398
Changes to the
fair value of
equity
instruments
at fair value
through other
comprehensive
income
–
–
–
–
–
–
–
–
231
231
–
–
Foreign
Exchange
Reserve
Total
equity
–
82,664
–
(429)
(20,316)
(429)
(429)
(20,745)
–
–
160
728
(429)
62,807
–
(1,896)
(24,595)
(1,665)
(1,896)
(26,260)
–
–
34,207
2,564
231
(2,325)
73,318
–
388
388
–
–
–
1,166
1,166
(26,936)
1,554
(25,382)
–
–
69
1,398
Balance at 31 December 2022
182
(122,696)
149,516
13,603
9,338
619
(1,159)
49,403
The notes on pages 130 to 164 form part of the financial statements.
(All figures £’000)
Cash flows from operating activities
Loss for the year
Depreciation/amortisation charges
Equity settled share-based payment expenses
Finance expenses
Finance income
Taxation
Increase in inventories
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Interest paid
Tax received
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Acquisition of subsidiary net of cash acquired
Interest received
Net cash used in investing activities
Cash flows from financing activities
Capital repaid in respect of loans
Proceeds of new loan
Principal elements of lease repayments
Share issue
Net cash generated from financing activities
(Decrease) in cash and cash equivalents
Effect of exchange rates in cash held
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
The notes on pages 130 to 164 form part of the financial statements.
12 months to
31 December
2022
12 months to
31 December
2021
Note
8
9
9
10
9
12
13
17
9
18
18
18
22
(26,936)
3,112
1,398
287
(66)
(4,041)
(348)
(1,570)
(902)
(287)
4,299
(24,595)
2,562
2,564
463
(31)
(5,744)
(2,967)
(3,170)
1,975
(463)
3,395
(25,054)
(26,011)
(95)
(3,179)
(2,753)
66
(5,961)
(1,572)
2,851
(827)
70
522
(30,493)
56
43,534
13,097
(146)
(5,976)
(1,752)
31
(7,843)
(1,844)
144
(515)
34,208
31,993
(1,861)
303
45,092
43,534
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Creo Medical Group plc – 2022 Annual Report & Accounts
Notes to the financial statements
1. Accounting policies
General information
Creo Medical Group plc is a public company, limited by shares, registered and domiciled in England and Wales in the UK. The Company’s
registered number is 10371794 and the registered office is Creo House, Unit 2, Beaufort Park, Beaufort Park Way, Chepstow, Wales NP16 5UH.
The Group financial statements consolidate those of the Parent Company and its subsidiaries (together referred to as the “Group”). The Parent
Company financial statements present information about Creo Medical Group plc as a separate entity and not about its Group.
The Group financial statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting
standards (“Adopted IFRSs”). The Company has elected to prepare its Parent Company financial statements in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”). In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of UK-adopted international accounting standards (“Adopted IFRSs”), but makes
amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure
exemptions has been taken.
Basis of preparation
This is the sixth annual financial report of the Company since the incorporation of Creo Medical Group plc on 12 September 2016 and the
subsequent acquisition of Creo Medical Limited via a share for share exchange on 9 November 2016. The financial statements are presented
in sterling and rounded to the nearest thousandth pound. All accounting policies, other than new policies have been applied consistently
throughout the year.
This financial report for the 12-month period ended 31 December 2022 (including comparatives for the 12 months ended 31 December 2021)
was approved by the Board of Directors on 25 April 2023.
Changes in accounting policy and disclosures
New standards, amendments and interpretations
The following new standards, amendments and interpretations have been adopted by the Group for the first time for the financial year
beginning on 1 January 2022:
X Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
X Onerous contracts – Cost of Fulfilling a Contract – Amendments to IAS 37
X Annual Improvements to IFRS Standards 2018-2020; and
X Reference to the Conceptual Framework – Amendments to IFRS 3
The adoption of these standards, amendments and interpretations has not had a material impact on the financial statements of the Group or
Parent Company.
New standards, amendments and interpretations issued but not effective and not adopted early
The following new standards, amendments to standards and interpretations have been issued but not are yet effective and therefore have not
been applied in preparing these consolidated financial statements:
X Deferred Tax related to Assets and Liabilities arising from a Single Transaction – amendments to IAS 12; and
X Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2.
The Directors anticipate that none of the new standards, amendments to standards and interpretations is expected to have a significant effect
on the financial statements of the Group or Parent Company.
Measurement convention
The financial statements are prepared on the historical cost basis except that derivative financial instruments and equity investments are
stated at their fair value.
Business combinations and basis of consolidation
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the
definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business,
the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether
the acquired set has the ability to produce outputs.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any contingent
consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not
remeasured, and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration
are recognised in profit or loss. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in
profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Where non-controlling interests do not still have present access to the returns associated with the underlying ownership interests, the
anticipated-acquisition method will be applied and the acquisition accounted for as though 100% of the equity had already been acquired.
This is the case for the acquisition of Albyn Medical S.L. in 2020.
Accounting policies adopted are consistent across the Group. All intra-Group balances and transactions, including unrealised income and
expenses arising from intra-Group transactions, are eliminated on consolidation.
Going concern
For the year ended 31 December 2022 the Group made a total comprehensive loss of £25.4m, had cash and cash equivalents of £13.1 million
with net assets of £49.4m. £31.7m (after expenses) was raised in February and March 2023 through Share Placement and Open Offer. The
financial statements have been prepared on a going concern basis which the Directors believe to be appropriate for the following reasons.
The Directors have considered the applicability of the going concern basis in the preparation of the financial statements. This included the
review of financial results, internal budgets and cash flow forecasts for the period of at least 12-months following the date of approval of the
financial statements (“the going concern period”).
The Directors have modelled severe but plausible downside scenarios on the going concern period. These scenarios include sensitivity
analysis to delay future growth. In such a case the Group would take mitigating actions and the Directors concluded that the Group would be
able to reduce expenditure on its research and development programmes and other areas in order to meet its liabilities as they fall due for the
going concern period.
The Directors have prepared forecasts which show under both the base case and severe but plausible scenario, the Group’s cash resources
will extend at least 18 months from the date of approval of the financial statements.
Based on the above, the Directors are satisfied that the Group and Company will have sufficient funds to meet their liabilities as they fall due
for the going concern period and therefore have prepared the financial statements on a going concern basis.
Intangible assets
Intangible assets include the capitalisation of development costs and software for the year ended 31 December 2022.
Software which is not an integral part of hardware assets are stated at historic cost, including expenditure that is directly attributable to the
acquired item, less accumulated amortisation and impairment losses.
Expenditure on research activities is recognised as an expense in the year in which it is incurred. Costs are classified as research expenditure
rather than development unless all of the below criteria are met, in which case these costs are capitalised on the balance sheet.
Development criteria:
a. completion of the intangible asset is technically feasible so that it will be available for use or sale;
b.
c.
the Company intends to complete the intangible asset and use or sell it;
the Company has the ability to use or sell the intangible asset and the intangible asset will generate probable future economic benefits
over and above cost;
there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
the expenditure attributable to the intangible asset during its development can be measured reliably.
d.
e.
Amortisation commences when the project is available for sale or use within the business.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.
Amortisation is charged so as to write off the costs of intangible assets over their estimated useful lives, on the following basis:
Software
Development costs
Trade Name
Supplier Relationships
Customer Relationships
– 3 years straight line
– 5 years straight line
– 10 years straight line
– 10 years straight line
– 10 years straight line
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Notes to the financial statements…continued
1. Accounting policies continued
Property, plant and equipment (“PPE”)
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Cost includes the original purchase
price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Leases are recognised if they meet the criteria in IFRS 16 as a lease. Where low value or short term lease exemptions are taken the asset is
classified as PPE, otherwise it is classified as a right of use asset. Where land and buildings are held under leases the accounting treatment
of the land is considered separately from that of the buildings. Leased assets acquired are stated at an amount equal to the lower of their fair
value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and less accumulated
impairment losses. Lease payments are accounted for as described below.
Depreciation is charged so as to write off the costs of assets over their estimated useful lives, on the following basis:
Freehold Land
Buildings
Leasehold improvements
Office equipment
Fixtures and fittings
Motor vehicles
Plant and machinery
Demo equipment
– not depreciated
– 40 years straight line
– 3 or 5 years straight line
– 2, 3 or 4 years straight line
– 3 or 4 years straight line
– 4 years straight line
– 3 years straight line or 4 years reducing balance
– 3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between sales proceeds and the carrying amount of the
asset and is recognised in income on the transfer of the risks and rewards of ownership.
Inventories
Inventories are stated at the lower of cost and net realisable value. Raw materials cost is based on the First In, First Out (“FIFO”) principle
using standard costing techniques and includes expenditure incurred in acquiring the inventories, production or conversion costs and other
costs in bringing them to their existing location and condition. Finished goods cost is based on standard cost with variances between actual
and standard going through the cost of sales line.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
This policy is applied to contracts entered into, on or after 1 January 2019. For leases acquired as part of a business combination the policy
applies from the acquisition date. The Group has taken the practical expedient not to reassess whether contracts at the date of initial
application constituted a lease.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to
each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate
non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset
or the site on which it is located, less any lease incentives received. On transition, the right-of-use assets were recognised at an amount equal
to the lease liability, adjusted to the amount of prepaid lease payments relating to that lease recognised in the statement of financial position
immediately before the date of initial application.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease
term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use
asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the
underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the
Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain
adjustments to reflect the terms of the lease, country lease entered into and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
X fixed payments, including in-substance fixed payments;
X variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
X amounts expected to be payable under a residual value guarantee; and
X the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period
if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a
residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there
is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease
liabilities in ‘loans and borrowings’ in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including
IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease
term.
Financial instruments
The Group predominantly enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities
like trade and other accounts receivable and payable, loans from other third parties, loans to related parties and investments in non-puttable
financial instruments. Any transactions relating to share options issued by the entity are disclosed in the share-based payment accounting
policy and Note 8. The Group is also able to enter into a variety of derivative financial instruments to manage its exposure to foreign exchange
risk, including foreign exchange forward contracts and cross-currency swaps.
Impairment
The Group recognises loss allowances for expected credit losses (“ECLs“) on financial assets measured at amortised cost, debt investments
measured at FVOCI and contract assets (as defined in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances for which credit
risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition,
which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL,
the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and
including forward-looking information.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, when
demanded.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a
shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
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1. Accounting policies continued
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
Write-offs
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.
Provisions under IFRS 9 may still be made to account for the probability of such default events, however such a provision being made is not
indicative that an actual default event will occur.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method, less any impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral
part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow
statement.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the
effective interest method.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.
Derivative financial instruments
Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in
profit or loss. The Group has not applied hedge accounting in the current or comparative periods.
Foreign currencies
The functional currency of the Group is Pounds Sterling. Transactions entered into by Group entities in a currency other than the reporting
currency are recorded at the rates ruling when the transaction occurred. Foreign currency monetary assets and liabilities are translated
into Sterling at the rates ruling at the statement of financial position date. Exchange differences arising on the retranslation of the unsettled
monetary assets and liabilities are similarly recognised in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the
Group’s presentational currency, Sterling, at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign
operations are translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the
transactions.
Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and
accumulated in the translation reserve or non-controlling interest, as the case may be. When a foreign operation is disposed of, such that
control, joint control or significant influence (as the case may be) is lost, the entire accumulated amount in the translation reserve, net of
amounts previously attributed to non-controlling interests, is recycled to profit or loss as part of the gain or loss on disposal. When the Group
disposes of only part of its interest in a subsidiary that includes a foreign operation while still retaining control, the relevant proportion of the
accumulated amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or
joint venture that includes a foreign operation while still retaining significant influence or joint control, the relevant proportion of the cumulative
amount is recycled to profit or loss.
Current and deferred tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates
enacted or substantially enacted by the statement of financial position date.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the
initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences
relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable
profits will be available against which the temporary difference can be utilised.
The Company incurs research and development expenditure which qualifies for Research and Development (“R&D“) tax relief and as such,
prepares and submits an R&D claim to HMRC in relation to each accounting period. The claims are made on the basis that the Company and
its activities meet the necessary conditions.
As the Company is currently loss making, there is no corporation tax liability arising, therefore it has chosen to convert the tax relief into
payable tax credits instead of carrying forward a loss. This results in the credit being paid in cash directly to the Company following the
submission of a valid claim.
The Company is claiming R&D tax relief predominately under the small or medium-sized enterprises (“SME“) scheme therefore the credit
is accounted for as tax in accordance with IAS 12 Income Taxes. However, where the R&D expenditure is related to monies received from
research grants, the Company is claiming an R&D expenditure credit (“RDEC“) under the Large Company Scheme and as such the related
credit is accounted for ‘above the line’ in accordance with IAS 20 Accounting for Government Grants, specifically as a reduction from the
related expenditure in the statement of comprehensive income.
Employee benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are
rendered by employees of the Group.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an expense in the income statement in the periods during which services are rendered by employees.
Share-based payments
Equity-settled share options are granted to certain Directors, employees and certain contractors which have been granted options to
subscribe for Ordinary Shares. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value.
Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model or where they are based on market-
based performance conditions, the Monte Carlo model. Compensation expense is recognised over the tranche’s vesting period based on the
number of awards expected to vest, through an increase to equity. The number of awards expected to vest is reviewed over the vesting period,
with any forfeitures recognised immediately.
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are
accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding
increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense
is adjusted to reflect the actual number of awards for which the related service, market and non-market vesting conditions are expected to be
met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service, market
and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair
value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
Where the Company grants options over its own shares to the employees of its subsidiaries it recognises, in its individual financial statements,
an increase in the cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge recognised in its
consolidated financial statements with the corresponding credit being recognised directly in equity. Amounts recharged to the subsidiary are
recognised as a reduction in the cost of investment in subsidiary. Where costs recharged match those incurred there is no net impact on the
investment in subsidiary.
Financing income and expenses
Financing expenses comprise interest payable, finance charges on shares classified as liabilities and leases recognised in profit or loss using
the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income
statement (see foreign currency accounting policy). Financing income comprises interest receivable on funds invested, dividend income, and
net foreign exchange gains.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event,
that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current
best estimate. If it is no longer probable that an outflow of economic benefit will be required to settle the obligation, the provision is reversed.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.
Revenue from contracts with customers
Revenue is recognised when substantially all of the risk and reward of ownership of the goods are transferred to the customer on despatch,
and thus has the ability to direct the use and obtain the benefits from the goods. Revenue is recognised net of any sales tax.
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1. Accounting policies continued
Performance obligations and revenue recognition policies
Revenue is recognised in accordance with IFRS 15 at the point at which the Group’s performance obligation has been satisfied. Below is a
summary of the recognition policies for each type of sale:
Type of product/
service
Nature and timing of satisfaction of performance obligations,
including significant payments terms
Direct Sales
of Devices/
Products
Customers obtain control of medical devices or products when the goods
either leave the warehouse or when they physically arrive at the customer
premises based on the shipment terms.
Invoices are generated at this point with payment required within 30-60 days
depending on customer terms.
Sales to
Distributors
Distributors obtain control of medical devices or products when the goods
either leave the warehouse or when they physically arrive at the distributor
premises based on the shipment terms. There is no right of return for the
goods.
Invoices are generated at this point with payment required within 30-60 days
depending on distributor terms. Equipment may be provided free of charge
to the customer provided they purchase ancillary products, or it may transfer
to them if they purchase a set volume.
No contract is deemed to exist under IFRS 15 in relation to the placement
of the equipment, due to Creo retaining the significant element of risks
and rewards including future cashflows, a lack of commercial substance in
relation to the equipment and recoverability of the asset without ability to
enforce compensation for the period of use of the equipment. Where the
Group retains control of the equipment it is classified as a fixed asset.
Revenue recognition policies
Revenue is recognised when the goods
leave the warehouse or are delivered to
the customers premises (depending on
shipment terms).
Revenue is recognised when the goods
leave the warehouse or are delivered to
the customers’ premises (depending on
shipment terms). Where the rights to an
asset are retained by the Group the asset
is depreciated over its useful life.
Service/
Maintenance
Contracts
Service & maintenance contracts are for a set period of time as specified
with the customer. Our performance obligations are satisfied over the
length of the contract.
Customers are invoiced monthly based on the annual value of the
contract agreed.
Revenue is recognised over the life of
the contract on a straight line basis. We
consider this matches the satisfaction of our
performance obligations of the contract.
Warranty
Products manufactured by the Group have a warranty period. Customers
have the right to return the product if it is faulty within this period.
Revenue is only recognised when we consider
it likely that the product will not be returned.
We calculate a warranty provision based
on historical warranty data of comparable
products. The warranty provision is accounted
of under IAS 37 as a provision and an expense.
Income which is related to ongoing
development or licensing activity is
recognised as the activity is undertaken, in
accordance with the contract to match the
costs incurred.
Development and regulatory approval
milestone payments are recognised as
revenue when the respective milestones are
achieved.
Licensing/
Development
Income
Licensing agreements may contain a number of elements and provide
for varying consideration terms, such as initial fees, sales, development
and regulatory milestones together with sales-based royalties and similar
payments.
Such arrangements are within the scope of IFRS 15 and are assessed
under its five-step model to determine revenue recognition. The distinct
performance obligations within the contract and the arrangement transaction
price are identified. The fair value of the arrangement transaction price is
allocated to the different performance obligations based upon the relative
stand-alone selling price of those obligations together with the performance
obligation activities to which the terms of the payments specifically
relate. The allocated transaction price is recognised over the respective
performance period of each performance obligation.
Creo carries out development for or with a third party. Performance
obligations are recognised at a point in time if considered a milestone or
overtime as the development project is completed.
Critical accounting judgements and policy update
The application of the Group’s accounting policies requires judgements in certain areas and to make estimates and assumptions concerning
the future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual
results. The following are those areas that are deemed to involve judgements and/or estimation about matters that have the most significant
effect on the amounts recognised in the financial statements.
Critical accounting judgements in applying the Group’s accounting policies
Capitalisation of development costs
Capitalisation of development costs requires analysis of the technical feasibility and commercial viability of the project concerned. Capitalisation
of the costs will only be made where there is clear demonstration that future economic benefit will flow to the Company. Costs relating to the
development of our initial Speedboat Slim, Slypseal, Microblate and Spydrblade devices of £1.9m were expensed during the year.
Our new Speedboat Slim product met the capitalisation criteria in Q3. Between it meeting the capitalisation criteria and being made available
for sale the total amount of capitalisable development costs were £38k. Due to this being an immaterial amount these were not capitalised in
the year and instead expensed. No further development of the Speedboat and CROMA products has been undertaken with an emphasis on
developing the later versions of these devices. No further development costs have been capitalised in the year.
The Group’s internal budgets demonstrate that the products will generate probable future economic benefits relating to Speedboat and
CROMA and therefore there is no impairment to capitalised development costs.
Recognition of deferred tax asset
Management judgement is required on whether the Group should recognise any deferred tax assets for losses. A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.
Given the nature and stage of development of Creo Medical Limited there are significant losses accumulated to date. To determine whether a
deferred tax asset should be recognised in relation to the future tax deduction that these losses represent, the Directors have considered the
estimated profits over a medium to long-term forecast and the events required to achieve such forecasts. Creo Medical UK Limited (formally
AMLTD acquired in 2020) is forecast to make profits over the medium term and these profits would be available for Group relief. Therefore we
have recognised a tax asset of £0.8m in relation to element of profit expected to be earned in that entity.
Forecasts for Creo Medical Limited continue to show tax losses for at least the medium term (to four years) as the Group continues to
develop and commercialise its products. Given the extent of uncertainty with forecasting over a longer-term horizon, it is determined that
there is not the level of convincing evidence that sufficient taxable profit will be available against which further tax losses or tax credits can
be utilised. Thus, there is considered to be insufficient certainty over the timing and amount of loss recoverability for a any further deferred
tax asset to be recognised.
Operating segments
An entity is required to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the
business activities in which it engages and the economic environments in which it operates. As the Group’s global reach has expanded in the
year, management have exercised significant judgement in determining whether presenting segment information on an alternative basis would
better adhere to this core principal.
Whilst the operations in different geographical locations form a fundamental part of the Group’s long-term strategy, they are in the early stages
of development and the Group continues to focus on the development and commercialisation of its key range of unique endoscopic surgical
devices and CROMA Advanced Energy Platform. In making their judgement, the Directors considered the Group’s activities and the internal
reporting structures and information regularly reviewed by the entity’s chief operating decision-maker to make decisions about resources to be
allocated and assessing performance. After the assessment, the Directors concluded that financial information at a consolidated Group level
appropriately reflects the business activities in which the Group is currently engaged, and the economic environment in which it operates. As
explained in Note 2 of the financial statements, as the Group continues to grow it is expected that the internal reporting structure will evolve in
order to meet the changing activities, goals and objectives of the business and therefore additional operating segments may be identified as
appropriate in future reporting periods.
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2. Revenue and other operating income
The revenue split between the Group for 2022 was as follows:
5. Staff numbers and costs
The cost of employees (including Directors) during the year was made up as follows:
(All figures £’000)
UK
Europe
RoW
Total
12 months to
31 December
2022
12 months to
31 December
2021
7,780
19,099
290
27,169
6,027
19,068
66
25,161
(All figures £’000)
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Total remuneration
At 31 December 2022 the Group had a number of unsatisfied performance obligations under IFRS 15 in relation to the Intuitive collaboration in
line with the contract agreement. The value of this unsatisfied performance obligation is in excess of £1m. (2021: £nil).
The average monthly number of employees during the year was as follows:
Segmental reporting
Operating segments are identified on the basis of internal reporting and decision making. Creo currently has one operating segment which is
the research, development and distribution of electrosurgical medical devices relating to the field of surgical endoscopy.
The Group has started the process of integrating the previous Albyn and Boucart brands into the Creo brand and offering customers our full
suite of products. As such the Group is still operating in a single segment. As the Group continues to grow we expect the internal reporting
structure to change to meet the changing goals and objectives of the business and additional operating segments may be identified in future
reporting periods.
(All numbers)
The average monthly number of employees during the year was as follows;
Research and development
Administration & Operations
Sales & Marketing
As there is only one reportable operating segment whole profit, expenses, assets, liabilities and cashflows are measured and reported on a
basis consistent with the financial statements, with no additional disclosures necessary.
6. Directors’ remuneration
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. Grant income received in the year was £51k (2021: £52k).
(All figures £’000)
Directors’ remuneration
Pension
Total Directors’ remuneration
12 months to
31 December
2022
12 months to
31 December
2021
18,102
2,675
1,042
1,279
23,098
16,122
2,530
742
2,564
21,958
12 months to
31 December
2022
12 months to
31 December
2021
100
122
87
309
55
107
77
239
12 months to
31 December
2022
12 months to
31 December
2021
1,753
83
1,836
2,735
82
2,817
3. Loss before tax
The loss before income tax is stated after charging:
(All figures £’000)
Depreciation – owned assets
Depreciation – right of use assets
Amortisation
Research and development expenditure
4. Audit and non-audit fees
An analysis of auditors’ remuneration is as follows:
(All figures £’000)
Audit of Parent Company and Consolidation
Audit of Group subsidiaries
Audit fees
Directors’ emoluments disclosed above paid to the highest paid Director in the year was £473k (31 December 2021: £623k) including Pension
contribution of £28k. The share options exercised in the year by the highest paid Director was £nil (31 December 2021: £nil).
There were Company pension contributions of £83k made to defined contribution schemes during the current year (31 December 2021: £82k).
Four Directors are in the defined contribution scheme (2021: Four). No shares were received or receivable for any Director in respect of long-
term incentive schemes. One of the Non-Executive Directors exercised 105,947 share options during the year.
(All figures £’000)
Gain on exercise of shares
Total gain on exercise of shares
12 months to
31 December
2022
12 months to
31 December
2021
10
10
–
–
7. Research and development expenditure
During the current and comparative years, research and development was a significant activity of the entity. Expenditure on research activities
is recognised in the statement of profit or loss as incurred.
12 months to
31 December
2022
12 months to
31 December
2021
1,296
672
1,145
13,527
782
651
1,129
12,869
12 months to
31 December
2022
12 months to
31 December
2021
149
148
297
129
136
265
139
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
8. Share-based payments
At 31 December 2022 the Group has an established Enterprise Management Incentive (“EMI”) and non-EMI schemes (the “Schemes”) under
which share options have been granted to certain officers, employees and certain suppliers. The Schemes are equity-settled share-based
payment arrangements whereby holders of vested options are entitled to purchase shares in the Company at the market price of the shares at
the grant date.
The Schemes include both market and non-market based vesting conditions. The share options may be exercised from the date that they vest
until the 10th anniversary of the date of the grant. In addition to the performance-based vesting conditions the only vesting requirement is that
the recipient remains in employment with the Company with the exception of tranches 11 and 12 where employment is not a criteria. All options
are to be settled by the physical delivering of shares. Details of the grants under these schemes are as follows:
Award
Grant date
Number of
options
Vesting conditions
243,720 Continual service of employment over 3 years
1,121,400 Continual service of employment over 3 years
670,680 Continual service of employment over 3 years
1,242,000 Continual service of employment over 3 years
216,000 Continual service of employment over 3 years
1,944,000 Continual service of employment over 3 years
5,907,896 Continual service of employment over 3 years
875,902 Continual service of employment and market
based performance conditions
1,746,718 Continual service of employment over 3 years
and non market based performance conditions
Exercise
price
(£)
0.21
0.17
0.17
0.17
0.17
0.17
0.76
1.13
1.54
Fair
value
(£)
0.09
0.11
0.11
0.12
0.12
0.11
0.48
0.58
Contractual
life of
options
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
0.84
10 years
749,209 Non market based performance conditions
1,000,000 Non market based performance conditions
3,348,475 Non market and market based performance
0.76
1.26
0.001 to 1.71
1.60
0.67
0.86 to 1.69
10 years
10 years
10 years
conditions
490,000 Non market and market based performance
0.001
0.51
10 years
conditions
23 July 2020
04 & 27 January 2021
725,369 Continual service of employment over 3 years
1,117,837 Continual service of employment over 3 years
and non market based performance conditions
2.01
0.001 to 1.92
1.18
0.97 to 2.17
10 years
10 years
14 June 2021
928,164 Non market and market based performance
0.001 to 2.06
0.81 to 1.84
10 years
conditions
23 November 2021
04 August 2022
4,633,465 Market based performance conditions
1,537,212 Market based performance conditions
0.001
0.001 to 1.92
1.41
0.26 to 0.76
10 years
10 years
28,498,047
06 December 2013
14 July 2015
14 July 2015
03 August 2015
04 August 2015
29 September 2016
09 December 2016
04 April 2018
29 August 2018
18 October 2018
02 July 2019
17 October &
7 November 2019
18 February 2020
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Share option activity for the year ended 31 December 2022 and 31 December 2021 is presented below:
Outstanding at start of year as previously stated
Granted during the prior year*
Forfeited during the prior year
Granted during the year
Forfeited during the year
Cancelled during the year
Exercised during the year
Outstanding at end of year
Exercisable at end of year
Weighted average remaining contractual life (in years) of options
outstanding at the year end
31 December
2022
Number of
options
31 December
2022
Weighted
average
exercise price
18,763,437
105,000
–
1,537,212
(297,835)
–
(123,947)
19,983,867
10,850,549
£0.60
£1.71
£0.00
£0.34
£1.69
£0.00
£0.55
£0.62
£0.79
6.3
31 December
2021
Number of
options
15,187,115
100,000
(78,947)
6,679,466
(104,858)
(2,772,130)
(247,209)
18,763,437
10,318,487
31 December
2021
Weighted
average
exercise price
£0.66
£1.71
£0.80
£0.21
£1.58
£0.01
£0.28
£0.60
£0.74
7.1
* Management identified 105,000 share options which were not disclosed in the prior year which have been added in the current year.
The estimated fair value of the share options was calculated by applying a Black-Scholes model for shares with no market-based performance
conditions and a Monte Carlo model for those with a market-based performance condition. The model inputs for the current period option
grants were as follows:
Exercise price
Share price at date of grant
Risk-free interest rate
Expected volatility
Dividend yield
Contractual life of option (years)
31 December 2022
31 December 2021
£0.001 – £1.92
£0.75
1.75%
46%
0%
10
£0.001 – £2.06
£1.52 – £2.17
0.1% – 0.1%
32% – 49%
0%
10
Expected volatility was based on historical share price volatility for the 12 months to the grant date, which may not necessarily be the actual outcome.
The weighted average share price of the shares exercised during the year was £0.55.
(All figures £’000)
Expense arising from share-based payment transactions
31 December
2022
31 December
2021
1,279
2,564
The following amounts for share-based payments are reflected in the above Consolidated Statement of Profit or Loss and Other
Comprehensive Income in relation to Directors:
(All figures £’000)
Professor Christopher Hancock
Craig Gulliford
Richard Rees
David Woods
31 December
2022
31 December
2021
212
251
184
22
669
361
393
285
84
1,122
During the prior year the Group implemented a SIP scheme for all UK employees. Employees are able to purchase up to £1,800 in Partnership
shares each year. The Company will then provide two matching shares for each Partnership share purchased. Employees must remain with
the Company for three years to keep the matching shares and five years to receive the shares tax free. The shares purchased/issued during
the year under the scheme are as follows:
(All figures exact numbers)
Total Shares at 01 January
Partnership shares purchased in year
Matching shares issued in year
Total Shares in SIP scheme at 31 December
31 December
2022
31 December
2021
139,838
111,211
322,752
573,801
–
78,226
61,612
139,838
The total value of the Partnership Shares which was charged to administrative expenses in the year was £119k. Matching shares for the
partnership shares purchased under the SIP scheme in December 2022 were not issued until after the yearend.
9. Finance expenses and finance income
(All figures £’000)
Finance income:
Bank interest
Fair value adjustment for derivatives
Total finance income
Finance costs:
Bank interest
Interest expense on lease liabilities
Fair value adjustment for derivatives
Unwind of the discount on lease liabilities
Unwind of the discount on deferred and contingent liabilities
Total finance costs
12 months to
31 December
2022
12 months to
31 December
2021
34
32
66
202
5
–
41
39
287
31
–
31
183
26
100
28
126
463
141
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
10. Taxation
Recognised in the income statement:
(All figures £’000)
Current tax:
Current year
Adjustments for prior years
Foreign tax
Current tax credit
Deferred tax:
Origination and reversal of temporary timing differences
Total tax credit
Reconciliation of effective tax rate:
(All figures £’000)
Loss for the year
Total credit
Loss excluding taxation
Tax using the UK corporation tax rate of 19% (2021: 19%)
Research and development
Movement in deferred tax not provided
Non-deductible expenses
Equity-settled share-based payments
Different tax rates applied in overseas tax jurisdictions
Losses utilised
Fixed asset differences
Deferred tax assets recognised
Adjustments for prior years
Total tax credit
31 December
2022
31 December
2021
Note
(4,394)
–
(3,879)
(100)
114
161
(4,280)
(3,818)
16
239
(4,041)
(1,926)
(5,744)
31 December
2022
31 December
2021
(26,936)
(4,041)
(24,595)
(5,744)
(30,977)
(30,339)
(5,886)
(1,937)
2,895
430
119
63
440
35
(200)
–
(4,041)
(5,764)
(2,180)
3,314
87
240
139
163
16
(1,659)
(100)
(5,744)
The Group has submitted R&D tax relief claims under the small or medium-sized enterprises (“SME“) scheme and £4,500k (2021: £4,299k)
has therefore been accounted as a tax credit in accordance with IAS 12 Income Taxes. In addition, the Group has also submitted R&D claims
under the large company (“RDEC“) scheme in relation to monies received from research grants. In accordance with IAS 20 Accounting for
Government Grants, an amount of £nil (2021: £nil) has been accounted for ‘above the line’ as a reduction from the related expenditure in the
statement of comprehensive income.
11. Loss per share
Loss per share has been calculated in accordance with IAS 33 – Earnings Per Share using the loss for the year after tax, divided by the
weighted average number of shares in issue.
(All figures £)
Loss
Loss attributable to equity holders of Company (basic)
Shares (number)
Weighted average number of Ordinary Shares in issue during the year
Loss per share
Basic and diluted
Ordinary Shares start of year
Issued in year
Issue 1 - Ordinary
Issued with months remaining
Issue 2 - Ordinary
Issued with months remaining
Issue 3 - Ordinary
Issued with months remaining
Issue 4 - Ordinary
Issued with months remaining
Issue 5 - Ordinary
Issued with months remaining
Issue 6 - Ordinary
Issued with months remaining
Closing Ordinary Shares
Average Ordinary Shares
Basic EPS
12 months to
31 December
2022
12 months to
31 December
2021
(26,936,464)
(24,594,919)
181,335,216 164,433,455
(0.15)
(0.15)
181,099,186
157,891,181
49,209
105,810
8
11
3,000,000
216,942
6
5
61,612
27,000
5
5
19,899,184
78,947
3
5
108,000
18,000
1
3
90,000
–
–
–
181,099,186
181,545,885
181,335,216 164,433,455
(0.15)
(0.15)
12. Intangible assets and goodwill
(All figures £000’s)
Goodwill
Trade Name
Customer
Relationships
Supplier
Relationships
Development
costs
capitalisation
Computer
software
Assets
under
construction
Cost:
At 1 January 2021
Additions
Acquired on business combination
Transferred
Effect of movements in exchange rate
At 31 December 2021
Accumulated amortisation and
impairment:
At 1 January 2021
Charge for year
Effect of movements in exchange rate
At 31 December 2021
Net book value at 31 December
2021
18,262
–
1,467
–
(1,166)
18,563
–
–
–
–
1,249
–
–
–
(80)
1,169
48
120
(7)
161
1,161
–
–
–
(74)
1,087
48
112
(6)
154
7,699
–
–
–
(491)
7,208
278
742
(39)
981
650
–
–
–
–
650
160
130
–
290
346
146
–
–
–
492
304
24
–
328
49
–
–
–
–
49
49
–
–
49
Total
29,416
146
1,467
–
(1,811)
29,218
887
1,128
(52)
1,963
18,563
1,008
933
6,227
360
164
–
27,255
143
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
12. Intangible assets and goodwill continued
(All figures £000’s)
Goodwill
Trade Name
Customer
Relationships
Supplier
Relationships
Development
costs
capitalisation
Computer
software
Assets
under
construction
Cost:
At 1 January 2022
Additions
Transferred
Effect of movements in exchange
rate
At 31 December 2022
Accumulated amortisation and
impairment:
At 1 January 2022
Charge for year
Transferred
Effect of movements in exchange
rate
At 31 December 2022
Net book value at 31 December
2022
18,563
–
–
1,000
19,563
–
–
–
–
–
1,169
–
–
68
1,237
161
119
–
14
294
1,087
–
–
64
1,151
154
110
–
14
278
7,208
–
–
421
7,629
981
730
–
88
1,799
650
–
–
–
650
290
130
–
–
420
492
81
48
–
621
328
56
48
–
432
49
14
(48)
–
15
48
–
(48)
–
–
Total
29,218
95
–
1,553
30,866
1,962
1,145
–
116
3,223
The discount rate has been calculated based on the weighted average cost of capital for Albyn Medical, based on the capital asset pricing
model. In calculating the relevant inputs we considered historical and long-term market return studies, data from comparable companies
within the industry and other relevant external data.
We considered potential future impacts from climate change in the future and the impact these could have on the carrying value of each CGU
in the Group. Although a formal scenario planning has not yet been finalised we did not identify any indicators which we consider would have
a material impact on the assessment of the value in use of the CGU.
The growth rate was based on a five year forecast based on management expectations with revenue assumed to reduce to a 2% terminal
growth rate over the long term. The Group has conducted sensitivity analysis on the impairment testing.
(Amounts in €000’s)
Albyn CGU Group
Sensitivity scenario (amounts in €’000s):
Pre-tax Discount rate increase by 1%
Terminal value growth rate reduce by 1%
Budgeted revenue growth rate (average of next 5 years) reduced by 2%
Headroom
10,843
Impact on
Headroom
(4,384)
(3,500)
(7,359)
19,563
943
873
5,830
230
189
15
27,643
Boucart Goodwill Assumptions
Goodwill arising on acquisition of Boucart has been allocated to a single CGU. The recoverable amount of this CGU Group was based on value
in use, estimated using discounted cashflows. The key assumptions used in the calculation are shown in the table below:
The amortisation of intangibles has been charged to administrative expenses in the Consolidated Statement of profit or loss and other
Comprehensive Income. The supplier relationship intangible arose on the acquisitions of Albyn and Boucart Medical in 2020. The remaining
amortisation period of the Albyn supplier relationships is 91 months and the remaining amortisation period for the Boucart supplier
relationships is 94 months.
Capitalised development costs
£48k of capitalised software was transferred from assets under construction to computer software in the year. No other assets have been
transferred from assets under construction during the year. No development costs were capitalised during the year (31 December 2021: £nil).
Assets under construction
There was £15k of assets under construction at the 31 December 2022 in relation to software purchased during the year (31 December 2021:
£nil).
Impairment of intangible assets
An impairment review of intangibles was carried out including consideration of potential climate related risks on the longer-term intangibles
including trade name, supplier relationships and customer relationships. No impairment to intangible assets were recognised during the year.
In percent
Pre-tax discount rate
Terminal value growth rate
Budgeted revenue growth rate (average of next five years)
13.42%
2%
4%
The discount rate has been calculated based on the weighted average cost of capital for Boucart, based on the capital asset pricing model.
In calculating the relevant inputs we considered historical and long-term market return studies, data from comparable companies within the
industry and other relevant external data.
We considered potential future impacts from climate change in the future and the impact these could have on the carrying value of the CGU.
Although a formal scenario planning has not yet been finalised we did not identify any indicators which we consider would have a material
impact on the assessment of the value in use of the CGU.
The growth rate was based on a five year forecast based on management expectations with revenue assumed to reduce to a 2% terminal
growth rate over the long term. The Group has conducted sensitivity analysis on the impairment testing.
Goodwill impairment test
Goodwill assets considered significant in comparison to the Group’s total carrying amount of such assets have been allocated to cash
generating units or groups of cash generating units as follows:
(Amounts in €000’s)
Boucart CGU
(All figures £’000)
Albyn Group of CGUs
Boucart single CGU
Aber single CGU
31 December
2022
31 December
2021
16,022
2,074
1,467
19,563
15,137
1,959
1,467
18,563
Sensitivity scenario (amounts in €’000s):
Pre-tax Discount rate increase by 1%
Terminal value growth rate reduce by 1%
Budgeted revenue growth rate (average of next 5 years) reduced by 2%
Albyn Goodwill Assumptions
Goodwill arising on acquisition of Albyn has been allocated to a single CGU Group which consists of the subsidiary entities within the
Albyn Group, each being classified as a CGU unit. The recoverable amount of this CGU Group was based on value in use, estimated using
discounted cashflows. The key assumptions used in the calculation are shown in the table below:
In percent
Pre-tax discount rate
Terminal value growth rate
Budgeted revenue growth rate (average of next five years)
14.23%
2%
4%
Headroom
3,435
Impact on
Headroom
(853)
(674)
(1,301)
145
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
Aber Goodwill Assumptions
Goodwill arising on acquisition of Aber has been allocated to a single CGU. The recoverable amount of this CGU Group was based on value in
use, estimated using discounted cashflows. The key assumptions used in the calculation are shown in the table below:
In percent
Pre-tax discount rate
Terminal value growth rate
Budgeted revenue growth rate (average of next five years)
14.89%
3%
6%
The discount rate has been calculated based on the weighted average cost of capital for Aber, based on the capital asset pricing model. In
calculating the relevant inputs we considered historical and long-term market return studies, data from comparable companies within the
industry and other relevant external data.
We considered potential future impacts from climate change in the future and the impact these could have on the carrying value of the CGU.
Although a formal scenario planning has not yet been finalised we did not identify any indicators which we consider would have a material
impact on the assessment of the value in use of the CGU.
The growth rate was based on a five-year forecast based on management expectations with revenue assumed to reduce to a 2% terminal
growth rate over the long term. The Group has conducted sensitivity analysis on the impairment testing.
(Amounts in £000’s)
Aber CGU
Sensitivity scenario (amounts in £’000s):
Pre-tax Discount rate increase by 1%
Terminal value growth rate reduce by 1%
Budgeted revenue growth rate (average of next 5 years) reduced by 2%
Headroom
456
Impact on
Headroom
(229)
(181)
(378)
13. Property, plant and equipment
(All figures £’000)
Cost:
At 1 January 2021
Acquired in business
combination
Additions
Transferred
Disposals
Exchange rate movements
At 31 December 2021
Accumulated Depreciation:
At 1 January 2021
Acquired in business
combination
Charge for the year
Disposals
Exchange rate movements
At 31 December 2021
Net book value at 31 December
2021
Cost:
At 1 January 2022
Additions
Transferred
Disposals
Exchange rate movements
At 31 December 2022
Accumulated Depreciation:
At 1 January 2022
Charge for the year
Disposals
Exchange rate movements
At 31 December 2022
Net book value at 31
December 2022
Land &
Buildings
Leasehold
Improvements
Office
equipment
Fixtures
and
fittings
Motor
vehicles
Plant and
machinery
Assets
under
construction
Demo
Equipment
Right of
Use
Asset
Leases
Total
–
695
1,014
179
499
1,391
29
696
2,466
6,969
–
4,507
–
–
–
4,507
–
–
52
–
–
52
–
41
29
–
(25)
–
347
–
–
125
81
4
–
–
3
–
36
–
(22)
(27)
21
823
–
–
(86)
740
1,486
267
486
2,149
457
–
126
–
1
584
755
–
191
–
27
973
119
48
10
–
7
291
1,019
–
44
(12)
22
12
236
–
(8)
184
345
1,259
–
145
(29)
–
–
145
–
–
–
–
–
–
–
73
–
(1)
(48)
52
844
–
(134)
(103)
154
6,820
–
(157)
(161)
720
3,125
13,625
475
475
3,591
–
123
(1)
(62)
–
651
(28)
(8)
60
1,433
(41)
(21)
535
1,090
5,022
4,455
156
513
83
141
890
145
185
2,035
8,603
4,507
103
–
–
–
4,610
52
106
–
–
158
740
92
146
–
(38)
1,486
267
–
(2)
27
940
1,778
584
134
–
1
719
973
289
(1)
9
1,270
267
3
–
(18)
8
260
184
17
–
6
207
486
156
–
(89)
(66)
2,149
447
–
(3)
32
145
1,388
(146)
–
5
720
723
–
(82)
25
3,125
215
–
–
184
13,625
3,394
–
(194)
177
487
2,625
1,392
1,386
3,524
17,002
345
62
(77)
(79)
251
1,259
454
–
14
1,727
–
–
–
–
–
535
234
(76)
28
721
1,090
672
–
3
1,765
5,022
1,968
(154)
(18)
6,818
4,452
221
508
53
236
898
1,392
665
1,759
10,184
Assets under construction for the year of £1,392k (2021: £145k) relate to leasehold improvements in our additional building at the Chepstow
site. £145k of brought forward assets under construction were transferred to leasehold improvements during the year.
147
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
14. Inventories
(All figures £’000)
Raw materials & consumables
Finished goods
Total inventories
16. Deferred tax and other tax receivables continued
31 December
2022
31 December
2021
2,964
6,361
9,325
2,188
6,316
8,504
(All figures £’000s)
Balances:
Deferred tax asset
Deferred tax liability
Net deferred tax liability
31 December
2022
31 December
2021
(1,548)
2,000
452
(1,705)
1,786
81
These carrying values are stated net of impairment provisions of £2,645k (2021: £2,285k). Inventories of £1,434k (2021: £732k) were written
down during the year and the expense recognised in the income statement. £13,387k of inventories was recognised in the income statement
in cost of sales. The Directors are of the opinion that the replacement values of inventories are not materially different to the carrying values
stated above. Inventories also include £1.6m of PPE inventories in Spain. The value of these inventories match the value of the loan from the
Spanish government held on the balance sheet.
15. Trade and other receivables
(All figures £’000)
Current:
Trade receivables
Accrued other income
Other debtors
Prepayments
Total current
Non-current:
Other assets
Total trade and other receivables
31 December
2022
31 December
2021
4,859
387
428
1,091
6,765
153
6,918
3,876
66
518
370
4,830
146
4,976
An expected credit loss provision of £235k (2021: £505k) in relation to trade debtors has been booked during the year. An expected credit loss
provision was calculated for the other debtors balance and was deemed immaterial and therefore not recognised.
16. Deferred tax and other tax receivables
The accelerated capital allowances deferred tax liability set out below is expected to reverse over the life of the related fixed assets. Deferred
tax has been calculated at a rate of 25% (2021: 25%).
The movement on the deferred tax account is as shown below:
(All figures £’000)
Movement:
At 1 January
Deferred tax Asset recognised
Tax charge recognised in profit and loss
Losses utilised
Exchange rate movements
At 31 December
31 December
2022
31 December
2021
81
(201)
106
(14)
440
26
452
1,522
(1,632)
(420)
(530)
745
(134)
81
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the
deferred tax balances (after offset) for financial reporting purposes.
(All figures £’000)
Balances:
Intangible assets
Pension accruals and other temporary timing differences
Tax losses offset (see below)
31 December
2022
31 December
2021
2,132
(132)
(1,548)
452
2,069
(283)
(1,705)
81
There are unused trading losses at 31 December 2022 of approximately £50.6m (31 December 2021: £46.4m). A deferred tax asset of
£0.75m has been recognised in relation to these losses as Group believe they will be able to offset future profits from Creo Medical UK Limited
over the next two years. We also have £0.75m deferred tax asset relating to Creo Spain and Creo France. These have been recognised as
we expect to utilise these losses against future profits over the next 1 to 2 years. A remaining deferred tax asset of approximately £12.5m (31
December 2021: £9.8m) has not been recognised in respect of these tax losses due to uncertainty in respect of its recoverability. A deferred
tax asset of approximately £175k arises in respect of the share options that haven’t yet been exercised. This has not been recognised due to
uncertainty in respect of its recoverability.
Tax receivables at 31 December 2022 of £4.5m (31 December 2021: £4.3m) relate solely to R&D tax credits. The Company has submitted
R&D tax credit claims for the years presented in relation to its qualifying research and development expenditure and has taken the option of
surrendering the resulting losses and claiming an R&D tax credit in the form of immediate cash payments from HMRC.
17. Trade and other payables
(All figures £’000)
Current:
Trade payables
Social security and other taxes
VAT payable
Other payables
Accrued expenses
Derivative liability
PPE loan
Deferred and contingent consideration
Total trade and other payables
31 December
2022
31 December
2021
4,279
532
530
592
3,067
–
1,587
2,622
13,209
3,538
470
–
1,099
4,714
100
1,676
4,221
15,818
The PPE loan relates to a loan provided to the Group subsidiary Albyn Medical SL from the Spanish government for the procurement of PPE
equipment for Spanish hospitals and other industries. The loan is interest-free and repaid once the PPE has been purchased in Spain and the
funds received. The initial loan was for €4m of which €2.3m has been paid to date. As at 31 December 2022 the Group had £1.6m of PPE stock.
Albyn purchased PPE using the loan with suppliers based on an ‘arms length’ transaction. The PPE is then sold on to the end customer at a set
price. Albyn does not have a mark up on product however where larger quantities are purchased some element of profit is made. The risks and
rewards are all with Albyn and therefore this has been accounted for as a normal transaction as a principal. The proceeds received then go to
pay back the loan provided by the government.
As at 31 December 2022 the Group has deferred consideration in relation to the Albyn Medical acquisition in 2020 of £1.1m. £1.1m of deferred
consideration was paid during the year.
A contingent consideration liability of £0.7m has been recognised in the accounts in relation to the acquisition of Albyn Medical SL in 2020.
The Group considered it probable that the targets will be achieved based on current performance to date and forecast results, and therefore
expect the provision will be paid in full. £1.5m of contingent consideration was paid during 2022.
A contingent consideration liability of £0.4m has been recognised in the accounts in relation to the acquisition of Boucart Medial SRL in
2020. The Group considered it probable that the targets will be achieved based on performance to date and forecast results and therefore the
provision will be paid in full.
A contingent consideration liability of £0.4m has been recognised in the accounts in relation to the acquisition of Aber Electronics Limited
in 2021. The Group considered it probable that the targets will be achieved based on current performance to date and therefore expect the
provision will be paid in full.
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Creo Medical Group plc – 2022 Annual Report & Accounts
18. Financial instruments
Carrying amount of financial instruments
The amounts for all financial assets carried at fair value are as follows:
The Company measured the fair value of instruments which are categorised as level 2 in the fair value hierarchy, being the investment in
I.Q. Endoscopes as the price paid per share by other shareholders who also invested in the entity at the same time as the Group. As the
investment was made close to the year-end we consider the fair value per share at the time of investment to be representative of the fair value
of the shares at 31 December 2022.
(All figures £’000)
Investments:
I.Q. Endoscopes
Foreign currency forward contracts:
Liabilities
Reconciliation to cashflow movements
01 January 2021
Assumed in business combinations
Additions
Cashflow principles
Cashflow interest
Non-cash changes interest*
Non-cash changes FX
31 December 2021
01 January 2022
Additions
Cashflow principles
Cashflow interest
Non-cash changes interest*
Non-cash changes FX
31 December 2022
31 December
2022
31 December
2021
2,122
1,733
–
(100)
Gross Loan Lease Liabilities
8,554
44
100
(1,844)
(92)
60
–
6,822
2,011
–
868
(515)
–
40
(348)
2,056
Gross Loan Lease Liabilities
6,822
2,851
(1,572)
(125)
37
349
8,362
2,056
215
(827)
(1)
41
252
1,736
* Non-cashflow changes relate to effective interest rate charge on the Cardiff Capital Region loan and lease interest incurred on IFRS 16 leases.
Financial instruments measured at fair value
The fair value of forward exchange contracts is estimated by discounting the difference between the contractual forward price and the current
forward price for the residual maturity of the contract using a risk-free interest rate. The value of forward contracts in place as at 31 December
2022 was £nil. (2021 £100k liability). The foreign currency forward contracts are categorised as level 1 in the fair value hierarchy.
Financial risk management
The main purpose of the Company’s financial instruments is to finance the Company’s operations. The financial instruments comprise of
leases, foreign currency forward contracts, bank loans and facilities, cash and liquid resources and various items arising directly from its
operations, such as trade receivables and trade payables. The main risks arising from the Company’s finance instruments are exchange rate
risk, interest rate risk, and liquidity risk. The Company’s policies on the management of liquidity interest rates and foreign currency risks are set
out below.
Fair values of financial instruments
All financial assets and liabilities are held at amortised cost apart from forward exchange contracts, and the investment which are held at fair
value. Foreign exchange contracts changes go through the statement of profit or loss.
The Groups preference shares held in I.Q. Endoscopes were converted to Ordinary Shares during the year. As part of this Creo was issued
a warrant to purchase additional shares at par value. Creo exercised this warrant in December 2022. The investment was fair valued at
31 December 2022.
(All figures £’000)
Carrying value as at 1 January 2022
Additional investment
Share warrant exercise
Fair value gain through OCI
Balance at 31 December 2022
2022
1,733
–
1
388
2,122
2021
500
1,002
–
231
1,733
Shares owned 1 January 2022
Additional shares acquired during the year
Fair Value per share (£)
Fair Value of investment (£’000s)
Cost of initial investments (£’000s)
Gain through OCI (£’000s)
755,900
94,808
2.494
2,122
1,503
619
We have made an irrevocable election to classify fair value changes of the investment in I.Q. Endoscopes through other comprehensive
income rather than through profit or loss, the impact of this being any changes in fair value will never be reclassified through the profit or
loss account even if the investment is disposed of. Management rationale for this treatment is that the investment is not being held for the
purposes of future sale or to receive returns. Instead the investment is to help develop their disposable endoscopy products and potential
synergies this could have with the Creo product range.
The Company has not disclosed the fair values for certain financial instruments such as short-term trade receivables and payables, because
their carrying amounts are a reasonable approximation of fair values. Short and long-term interest bearing liabilities, as detailed in Note
19, are discounted at the effective interest rate of the respective financial liability and their carrying value is considered to be a reasonable
approximation of their fair value.
Liquidity
The Company’s policy is to ensure that it has sufficient cash resources to cover its future trading requirements which is predominately sourced
from its shareholders and investors. Short-term flexibility is available through current investor support via funding rounds held when required.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and investments in debt securities.
Interest-rate risk and benchmark reform
The Group has limited exposure to interest rate fluctuations with some acquired loans having variable interest rates. Where possible we look
to offset interest from loans with interest received from our cash on deposit. We do not consider that any significant increase in interest rates
would have a material impact on the business. The Group has some loans linked to the EURIBOR however these are expected to be settled
within the next year with the exception of one loan which is not material to the Group. We therefore do not consider the transition to alternative
benchmark rates to be a significant risk.
Trade Receivables
The carrying amounts of financial assets represent the maximum credit exposure. As at 31 December 2022 no investments in debt securities
or other contract assets were held and receivables from customers were £4,658k (2021: £4,499k).
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also
considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country
in which customers operate.
Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are
offered. The Group’s review includes external ratings, if they are available and review of financial statements. Where it is deemed the risk of
the customer defaulting may be high the Group will require the customer to pre-pay for items for a certain length of time before offering credit
terms.
The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one and three months for
customers. The terms very depending on their individual characteristics such as credit risk assessment, geographical local and public or
private customers. The majority of the Group’s customers have been transacting with the Group for a number of years with no credit issues
arising.
151
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
18. Financial instruments continued
Expected credit loss assessment for trade receivables
The following table provides information about the exposure to credit risk and ECLs for trade receivables and contract assets from individual
customers as at 31 December 2022.
(All figures £’000)
Excluded from ECL calculation
Current (not past due)
0-60 days
61-120 days
121-180 days
More than 180 days past due
Weighted
Average Loss
Gross Carrying
Amount
Loss Allowance
0%
1%
5%
11%
20%
100%
202
3,312
1,038
122
57
128
4,859
–
33
48
14
12
128
235
The Group uses an allowance matrix to measure the ECLs of trade receivables consistent with IFRS 9. Loss rates are calculated using
historical write-off data from the last 18 months to work out the probability of default based on the aging of the receivable. Where the Group
has forward looking information which means the ECL would be unlikely to occur we have excluded these from the calculation.
At 31 December 2022 the ECL for trade receivables was £235k (2021: £505k).
The movement in the allowance for impairment in respect of trade receivables and contract assets during the year was as follows:
(All figures £’000)
Balance at 1 January
Loss allowance movement
Specific amounts provided for
Balance at 31 December
2022
2021
(505)
270
–
(235)
(447)
(58)
(118)
(623)
Specific amounts of £nil (2021: £118k) were provided for in the year relate to the specific customer debts which we deem to be credit impaired.
Foreign exchange risk
The Company currently purchases certain materials throughout the world in connection with research and development of its primary product.
The Company also has subsidiaries which operate in a different functional currency. The consequence of this is that the Company is exposed
to movement in foreign currency rates. Liabilities within the Group are settled where possible using the currency of the liability to reduce
foreign exchange exposure. Forward foreign exchange contracts are used to manage the net foreign exchange exposure where appropriate.
19. Interest-bearing liabilities
(All figures £’000)
Current:
Lease liabilities
Bank credit facilities
Bank loans
Mortgage
Non-current:
Lease liabilities
Bank loan
Commercial loan
Mortgage
Lease liabilities are payable as follows:
Less than one year
Between one and five years
More than five years
Bank borrowings are payable as follows:
Less than one year
Between one and five years
More than five years
25
25
31 December
2022
31 December
2021
561
2,246
1,114
108
4,029
1,173
629
2,178
2,087
6,067
10,096
561
1,059
114
1,734
3,468
4,894
–
8,362
10,096
670
1,647
1,388
–
3,705
1,386
1,649
2,140
–
5,175
8,880
670
1,340
46
2,056
3,035
3,789
–
6,824
8,880
153
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
19. Interest-bearing liabilities continued
The terms and conditions of outstanding loans are as follows:
(All figures £’000)
Currency
Nominal
interest rate
Year of
maturity
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Secured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Unsecured Bank Loan
Mortgage
Commercial Loan
Short term Credit with Banks
Lease Liabilities
Lease Liabilities
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
GBP
GBP
GBP
EUR
EUR
GBP
EURIBOR+2%
EURIBOR+2,5%
EURIBOR+2%
EURIBOR+2%
EURIBOR+2%
EURIBOR+2%
2%
EURIBOR+2%
EURIBOR+2%
EURIBOR+1%
EURIBOR+1%
EURIBOR+1%
EURIBOR+1%
EURIBOR+2%
2%
EURIBOR+2%
1%
2%
EURIBOR+2%
2%
EURIBOR+1,9%
3%
2%
1%
1%
2%
2%
EURIBOR+1,75%
0.44%
0.44%
0.44%
0.87%
0.46%
0.50%
2.50%
Base rate +2.5%
5%
1.45-1.75%
1.5%-4%
2.8%-5%
2022
2023
2022
2022
2023
2023
2023
2022
2023
2023
2023
2023
2023
2023
2022
2023
2025
2022
2023
2023
2022
2022
2023
2023
2025
2025
2025
2025
2021
2022
2022
2021
2021
2021
2026
2021
2025
2021
2021–26
2021–24
31 December 2022
31 December 2021
Face
Value
89
177
71
18
35
142
177
89
177
133
133
133
133
532
106
532
310
106
532
355
106
266
532
177
355
355
355
355
89
89
89
29
75
21
50
2,250
2,055
2,394
1,755
729
Carrying
Value
–
32
–
–
6
25
34
–
31
27
27
27
27
121
–
111
142
–
111
40
–
–
111
15
201
205
205
211
–
–
–
–
–
–
35
2,195
2,178
2,246
1,148
585
Face
Value
84
168
67
17
34
134
168
84
168
126
126
126
126
503
101
503
293
101
503
335
101
251
503
168
335
335
335
335
84
84
84
28
71
20
50
–
2,055
1,760
1,658
729
Carrying
Value
15
59
12
3
11
47
60
15
58
50
51
51
50
215
17
207
193
17
208
151
19
43
208
71
257
260
260
265
–
28
84
–
–
–
44
–
2,140
1,645
1,223
833
Total interest bearing liabilities
16,106
10,096
12,753
8,880
The secured bank loans (other than the UK Secured Bank Loan) belong to Albyn Medical SL and are guaranteed by Elkargi. A mortgage for
the building purchased in 2021 was obtained during the year. The mortgage is secured to the property and has a loan to value covenant of
75% and a cashcheck covenant of £5m.
The commercial loan is provided by Cardiff Capital Region for the sum of £2,055k with the first year interest free. The loan has a 1:1 cashflow
covenant attached which becomes active on the third anniversary of the commencement of the loan. The lease liabilities are detailed at
Note 25.
20. Provisions
(All figures £’000)
At 1 January 2021
Provisions made in the year
Provisions used in the year
At 31 December 2021
Non current
Current
(All figures £’000)
At 1 January 2022
Provisions made in the year
Provisions used in the year
At 31 December 2022
Non current
Current
Warranties
Dilapidations
Legal & Tax
Other
89
7
(7)
89
–
89
89
459
172
(221)
410
410
–
410
761
–
(578)
183
183
–
183
149
2
(26)
125
–
125
125
Warranties
Dilapidations
Legal & Tax
Other
89
30
(5)
114
–
114
114
410
70
(96)
384
384
–
384
183
–
(183)
–
–
–
–
125
6
–
131
–
131
131
Total
1,458
181
(832)
807
593
214
807
Total
807
106
(284)
629
384
245
629
Warranty provisions
Warranty provisions relate to Albyn own brand products and services provided and is based on historical warranty data associated with similar
products and services sold. Management expect the provision to be settled with 12 months of the year end.
Dilapidation provisions
Provisions have been made for the estimated restoration costs of the leased premises at our UK, Singapore, US, Spain, France, Germany and
Belgium sites.
Provisions for dilapidations are inherently uncertain in terms of quantum and timing, not least because they involve negotiations with landlords
at future dates. The figures provided in the financial statements represent management’s best estimate of the likely outflows to the Group.
Legal and tax provisions
Our tax due diligence raised some potential tax liabilities and fines which may arise in the future as a result of the business acquisition. We are
now satisfied that these liabilities will not occur and have released the remaining provision.
Other provisions
Other provisions include pensions provision of £92k as well as other staff benefit provisions which are required in local jurisdictions.
Management expect these liabilities to be settled within 12 months of the year end.
21. Share capital and reserves
(All figures £’000)
Balance at start of year
Issue of share capital
Number of shares
Price per share (£)
Share value (£)
Balance at 31 December
31 December
2022
31 December
2021
181
158
447
0.001
1
182
23,208
0.001
23
181
During the year 123,947 share options were exercised, with 322,752 to the SIP. The Group has a single class of share: Ordinary Shares £0.001.
Issued share capital
Issued share capital is the amount of nominal value of shares held by shareholders. At 31 December 2022 181,545,885 shares have been
issued, each with the nominal value of £0.001 equalling a share capital for the Company of £181,545. All Ordinary Shares rank as pari passu
with regards to voting, dividends and rights on winding up. All shares are fully paid.
155
Strategic ReportSustainability ReportCorporate GovernanceFinancial StatementsNotes to the financial statements…continued
Creo Medical Group plc – 2022 Annual Report & Accounts
Notes to the financial statements…continued
21. Share capital and reserves continued
Share premium
The share premium reserve comprises the difference between the nominal value and the value received on share issue offset by the costs
directly associated with obtaining the capital funding e.g. legal fees.
Merger reserve
The merger reserve reflects the difference between the existing share capital and premium of Creo Medical Limited prior to share for share
exchange and the nominal value of shares issued. Refer to Note 1 Business combinations and basis of consolidation.
Share option reserve
The share option reserve reflects the cost to the Group of share options granted but not yet exercised. Refer to Note 8 Share-based payments.
Accumulated losses
Retained earnings including profit or loss for the year comprises the earned profit of the Parent Company and its subsidiaries.
Foreign exchange gain or loss reserve
The foreign exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations. Unrealised foreign exchange gains or losses from currency translations of foreign subsidiaries will go through other comprehensive
income and into the foreign exchange gain or loss reserve. On disposal of a foreign operation the gain or loss will become realised and
recognised as a profit or loss.
Investment reserve
Any loss or gain on our equity investments which we have elected to revalue through OCI is held in the investment reserve. This reserve will
never be recognised as a profit or loss even upon disposal of the investment. The reserve may be transferred to retained earnings one the
investment is disposed of.
22. Cash from share issue
(All figures £’000)
Share issue:
Share options exercised
Issued to EBT Trust
Issued to SIP
Share placing AIM 7 September 2021
Transaction costs AIM 7 September 2021
31 December
2022
31 December
2021
69
–
1
–
–
70
68
3
1
36,316
(2,180)
34,208
23. Related party disclosures
As at 31 December 2022 the Directors of the Company control 2.96% of the voting shares of the Company.
The remuneration of the Directors of the Company is disclosed in the Directors’ Remuneration Report and Note 6 above.
Share options held by Directors are detailed in the Directors’ Remuneration Report.
Interests and related party transactions are disclosed below
Monkey Business Consultants S.L. is a company owned and managed by Luis Collantes the CEO of the previous Albyn group and holds the
remaining 5% of shares in the Company which will be purchased in 2022. For accounting purposes it is assumed the Group has 100% control.
See accounting policy in Note 1. During the year total payments in the ordinary course of business to Monkey Business Consultants S.L.
consisted of £nil. Total amounts paid to Monkey Business Consultants S.L. in relation to the purchase of additional 5% of shares was £2.6m.
Total remuneration to Luis Collantes in the year was £272k (2021: £364k).
During the year the preference shares held with I.Q. Endoscopes were converted to Ordinary Shares. As part of this Creo was offered a
warrant for an additional 94,808 shares at par value. Creo exercised the warrant during the year for a total of £948. As at 31 December 2022 the
total fair value of the shares was estimated to be £2,121,530. The Group controls 13.2% of the Company and is not deemed to have significant
influence, therefore it has not been classified as an associate.
Christopher Hancock holds a Professorship with Bangor University and is the common-law spouse of Ling Chen. The fees paid in the year to
Ling Chen totalled £23k (2021: £27k) for consultation on the research and development projects throughout the year, with the balance payable
at 31 December 2022 being £nil (2021: £nil).
Key management personnel are deemed to be those with ultimate decision making power in a particular area of the business.
Aggregate remuneration for the year for all key management totalled £2,785k (31 December 2021: £4,603k).
(All figures £’000)
Salary and other taxable benefits
Pension
SBP
24. Ultimate controlling party
By virtue of the shareholding structure, there is no sole ultimate controlling party.
25. Leases
The accounting policy for leases under IFRS 16 has been explained in Note 1.
12 months to
31 December
2022
12 months to
31 December
2021
2,025
83
677
2,785
3,100
82
1,421
4,603
Leases as lessee (IFRS 16)
The Group leases building facilities in the UK, US, Singapore, France, Spain, Germany and Belgium. The leases typically run for a period of
three to ten years, with an option to renew the lease after that date. Lease payments are renegotiated every five years to reflect market rentals.
Some leases provide for additional rent payments that are based on changes in local price indices. For certain leases, the Group is restricted
from entering into any sub-lease arrangements.
Some of the building leases were entered into many years ago as combined leases of land and buildings. Previously, these leases were
classified as operating leases under IAS 17. New leases have been recognised under IFRS 16.
The Group leases equipment under a number of leases, which were classified as finance leases under IAS 17.
The Group leases other equipment with contract terms of one to five years. These leases are short-term and/or leases of low-value items. The
Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
Information about leases for which the Group is a lessee is presented below.
i) Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant and
equipment.
2021
(All figures £’000)
Balance at 1 January
Depreciation charge
Additions to right of use assets
Disposals of right of use assets
Exchange difference
Balance at 31 December
2022
(All figures £’000)
Balance at 1 January
Depreciation charge
Additions to right of use assets
Disposals of right of use assets
Exchange difference
Balance at 31 December
Land and
buildings
Plant and
machinery
Motor
Vehicles
1,620
(506)
847
(103)
(26)
1,832
136
(37)
–
–
(8)
91
235
(108)
–
–
(15)
112
Land and
buildings
Plant and
machinery
Motor
Vehicles
1,832
(557)
215
–
172
1,662
91
(36)
–
–
3
58
112
(79)
–
–
7
40
Total
1,991
(651)
847
(103)
(49)
2,035
Total
2,035
(672)
215
–
182
1,760
157
Strategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Creo Medical Group plc – 2022 Annual Report & Accounts
Notes to the financial statements…continued
Parent Company statement of financial position
As at
31 December
2022
As at
31 December
2021
Note
30
31
32
32
33
33
21
27,430
5,834
2,122
118,876
26,791
4,563
1,733
89,131
154,262
122,218
222
8,610
8,832
80
37,321
37,401
163,094
159,619
2,387
108
2,087
4,582
182
149,516
619
8,579
(384)
158,512
163,094
3,911
–
–
3,911
181
149,448
231
7,182
(1,334)
155,708
159,619
25. Leases continued
ii) Lease liabilities
(All figures £’000)
Maturity Analysis – undiscounted contractual cash flows
Less than one year
One to five years
More than five years
Total lease liabilities at 31 December
Lease liabilities included in the statement of financial position at 31 December
Current
Non-current
iii) Amounts recognised in profit or loss
2022 – Leases under IFRS 16
(All figures £’000)
Depreciation on right of use asset
Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases of low value assets
The total cash outflow for leases in 2022 was £827k.
2022
2021
(564)
(1,082)
(126)
(1,772)
(1,772)
(564)
(1,208)
(1,772)
2022
672
42
–
–
(672)
(1,464)
(48)
(2,184)
(2,184)
(672)
(1,512)
(2,184)
2021
651
54
–
–
(All figures £’000)
Assets
Non-current assets
Investments in subsidiaries
Property, plant and equipment
Investments
Other assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current Liabilities
Trade and other payables
Interest bearing liabilities
Non-Current Liabilities
Interest bearing liabilities
Total Liabilities
iv) Extension options
Some property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are
exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to
exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or
significant changes in circumstances within its control. As at 31 December 2022 no lease extension is expected to be taken by the Group.
26. Capital commitments
The amounts contracted for but not provided for as at 31 December 2022 are £nil (31 December 2021: £nil).
27. Subsequent events
Fund raise
On 16 February 2023, Creo announced it had raised £28.5 million (before expenses) by way of a conditional Placing and Subscription and on
7 March 2023 it had raised an additional £5.2m (before expenses) by way of an open offer, therefore raising gross proceeds of approximately
£33.7 million, in aggregate.
Investment by Key Management Personnel:
Further to the announcements made on 16 February 2023 and 8 March 2023, and pursuant to the recent fundraising, the Company confirms
that each of the Company’s Directors, Luis Collantes, a member of the Company’s senior leadership team and a director of various of the
Company’s subsidiaries and certain PCAs, have either themselves or through parties affiliated with them acquired New Ordinary Shares at the
Issue Price of 20 pence per Ordinary Share as follows:
Director/PDMR Name
Charles Spicer
Craig Gulliford*
Richard Rees
Professor Christopher Hancock
David Woods
John Bradshaw
Ivonne Cantu
Luis Collantes**
* These 1,000,000 shares are held by the spouse of Craig Gulliford
** Shares held via Monkey Business Consultants SL, a company owned and managed by Luis Collantes.
No. of New
Ordinary Shares
acquired
Resultant
Shareholding
post transaction
% of voting
rights post
transaction
165,119
1,000,000
2,715,322
383,171
415,255
1,265,135
125,000
4,442,485
308,530
1,630,466
2,805,902
4,802,352
440,255
1,371,082
125,000
4,442,485
0.09%
0.46%
0.79%
1.36%
0.13%
0.39%
0.04%
1.27%
Called up share capital
Share premium
Financial assets at fair value through other comprehensive income
Share option reserve
Accumulated losses*
Total Equity
Total equity and liabilities
* Profit for the year was £950k.
The Company has taken the s408 exemption from presenting a separate profit and loss for the year.
These financial statements on pages 159 to 164 were approved by the Board of Directors on 25 April 2023 and were signed on its behalf by:
Richard Rees
Director
Company registered number: 10371794
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Strategic ReportSustainability ReportCorporate GovernanceFinancial Statements
Creo Medical Group plc – 2022 Annual Report & Accounts
Parent Company statement of changes in equity
Parent Company note to the financial statements…continued
Note
Called up
share capital
Accumulated
losses
158
(742)
Share
premium
115,264
Investment
Fair Value
Share option
reserve
Total
equity
–
4,617
119,297
28. Parent Company financial statements
As permitted by section 408(3) of the Companies Act 2006, a separate Statement of Comprehensive Income, dealing with the profit of the
Parent Company, has not been presented. The Parent Company profit for the year ended 31 December 2022 is £950k (2021: profit £592k).
(All figures £’000)
Balance at 1 January 2021
Total comprehensive income for
the year
Profit for the financial year
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Issue of share capital
Equity settled share-based payment
transactions
Balance at 31 December 2021
Total comprehensive expense for
the year
Profit for the financial year
Other comprehensive income
Total comprehensive expense
Transactions with owners,
recorded directly in equity
Issue of share capital
Equity settled share-based payment
transactions
–
–
–
23
–
181
–
–
–
1
–
(592)
–
(592)
–
–
–
–
–
34,184
–
(1,334)
149,448
950
–
950
–
–
–
–
–
68
–
–
231
231
–
–
231
–
388
388
–
–
8
8
Balance at 31 December 2022
182
(384)
149,516
619
–
–
–
–
2,565
7,182
–
–
–
–
1,397
8,579
(592)
231
(361)
34,207
2,565
155,708
950
388
1,338
69
1,397
158,512
29. Parent Company accounting policies
To the extent that an accounting policy is relevant to both the Group and Company financial statements, refer to the Group financial
statements for disclosure of the accounting policy. The nature of the Company’s operations and business activities are the same as that
of the Group and are described in the strategic report.
Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (“FRS 101”).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards (“Adopted IFRSs”), but makes amendments where necessary in order to comply with Companies Act 2006
and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
In these financial statements the Parent Company has taken advantage of the following disclosure exemptions under FRS 101:
X A Cash Flow Statement and related notes;
X Comparative period reconciliations for share capital;
X Comparative period reconciliations for PPE;
X Disclosures in respect of transactions with wholly owned subsidiaries;
X The effects of new but not yet effective IFRSs;
X Disclosures in respect of the compensation of Key Management Personnel;
X Disclosures of transactions with a management entity that provides key management personnel services to the Company; and
X Certain disclosures required by IFRS 7 Financial Instrument Disclosures.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
X IFRS 2 Share Based Payments in respect of Group-settled share-based payments;
X Certain disclosures required by IAS 36 Impairment of Assets in respect of the impairment of goodwill and indefinite life intangible assets;
and
X Certain disclosures required by IFRS 3 Business Combinations in respect of business combinations undertaken by the Company.
The accounting policies set out above have, unless otherwise stated, been applied consistently to all periods presented in these financial
statements.
Judgements made by the Directors, in the application of these accounting policies that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in the next year, are discussed in Note 1 Critical accounting judgements and policy
update.
These accounts have been prepared on a going concern basis.
These accounts have been prepared under the historic cost convention.
Changes in accounting policy and disclosures as well as a description of the entities operations and business activities have been disclosed in
Note 1.
Measurement convention
The financial statements are prepared on the historical cost basis except that derivative financial instruments and equity investments are
stated at their fair value.
Investments in subsidiaries are carried at cost less impairment.
161
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Creo Medical Group plc – 2022 Annual Report & Accounts
Parent Company note to the financial statements…continued
30. Investments
(All figures £’000)
Cost:
As at 1 January 2018
Capital Contribution
As at 31 December 2018
Capital Contribution
As at 31 December 2019
Capital Contribution
Albyn Acquisition
As at 31 December 2020
Capital Contribution
As at 31 December 2021
Capital Contribution
As at 31 December 2022
The Company has the following investments in subsidiary companies:
Subsidiary
Domicile
Status
Registered Office address
shares held Ownership Year end#
Class of
Investment
in subsidiary
companies
1
642
643
658
1,301
324
23,640
25,265
1,526
26,791
639
27,430
Ownership
Type
Creo Medical Limited
UK
Trading Creo House, Unit 2 Beaufort Park, Beaufort
Ordinary
100% 31-Dec
Direct
Park Way, Chepstow, Wales, NP16 5UH
Creo Medical, Inc.
US
Trading 100 Reserve Road, suite B400 Danbury, CT
Ordinary
100% 31-Dec
Indirect***
Creo Medical Innovations Limited (Company registration number: 11196260), Aber Electronics Limited (Company registration number:
07400511), Wiest Uropower Limited (Company registration number 05781601) and Creo Medical UK Limited (Company registration number:
SC128038) is exempt from the requirements to file audited financial statements by virtue of section 479A of the companies act 2006. In
adopting the exemption, Creo Medical Group PLC has provided a statutory guarantee to this subsidiary in accordance with section 479C of
the companies Act 2006.
The Company has an investment in equity shares in I.Q. Endoscopes. The Company made an irrevocable election to classify fair value changes
of the investment in I.Q. Endoscopes through other comprehensive income rather than through profit or loss, the impact of this being any
changes in fair value will never be reclassified through the profit or loss account even if the investment is disposed of.
The fair value calculation for 31 December 2022 is shown in Note 18 of the Accounts.
31. Parent Company fixed assets
(All figures £000’s)
Cost:
At 1 January 2022
Additions
Transfers
At 31 December 2022
Accumulated Depreciation:
At 1 January 2022
Charge for the year
At 31 December 2022
Land &
Buildings
Assets under
Construction
4,507
127
105
4,739
52
128
180
108
1,272
(105)
1,275
–
–
–
Total
4,615
1,399
–
6,014
52
128
180
06810, USA
Net book value at 31 December 2022
4,559
1,275
5,834
Creo Medical Innovations
Limited
UK
Trading Creo House, Unit 2 Beaufort Park, Beaufort
Ordinary
100% 31-Dec
Indirect***
Park Way, Chepstow, Wales, NP16 5UH
Creo Medical Ireland
Limited
Ireland Dormant
70 Sir John Rogerson’s Quay, Dublin 2 ,
Ireland
Ordinary
100% 31-Dec
Indirect***
Creo Medical PTY
Australia Dissolved Colin Biggers & Paisley Level 42 2 Park
Ordinary
100% 31-Dec
Indirect***
Street Sydney, NSW 2000
Creo Medical PTE Limited Singapore
Trading 20A Tanjong Pagar Road, Singapore
Ordinary
100% 31-Dec
Indirect***
(088443)
Creo Medical SL (formerly
Albyn Medical SL)
Spain
Trading Cordovilla (Nevarra), Poligno Industrial
Cordovilla, calle D, Munero 1
Ordinary
100%*
31-Dec
Direct
Creo Medical SAS (Albyn
Medical SAS)
Creo Medical UK Limited
(formerly Albyn Medical
Limited)
Creo Medical GmbH
(formally Endo-Technik
Wolfgang Griest GmbH)
France
Trading 9 avenue Jean Prouve, 88100 Sain-des-
Ordinary
100%*
31-Dec
Indirect**
Vosges
UK
Trading Kintail House, Beechwood Park, Inverness,
Ordinary
100%*
31-Dec
Indirect**
Highland, IV2 3WB
Germany
Trading Vertrieb und Handelmit medizinischen
Ordinary
100%*
31-Dec
Indirect**
Geraten, Langenfeld
Premier Endoscopy
UK Dormant Creo House, Unit 2 Beaufort Park, Beaufort
Ordinary
100%* 30-Sep
Indirect**
Park Way, Chepstow, Wales, NP16 5UH
Wiest Uropower Limited
Germany Dormant Creo House, Unit 2 Beaufort Park, Beaufort
Ordinary
100%* 30-Sep
Indirect**
Park Way, Chepstow, Wales, NP16 5UH
Boucart Medical SRL
Belgium
Trading 1070 Anderlecht, rue des Veterinaires 42,
Ordinary
100%*
31-Dec
Indirect**
Belgium
Aber Electronics Limited
UK
Trading Creo House, Unit 2 Beaufort Park, Beaufort
Ordinary
100% 31-Dec
Indirect***
Park Way, Chepstow, Wales, NP16 5UH
#
*
Wiest Uropower and Premier Endoscopy are dormant entities and we have no intention of trading through these companies. As a result their year-ends have not been aligned with
that of the Group.
Monkey Business Consulting SL retained 5% of the shares in Albyn as at 31 December 2022. The Group has an obligation to purchase the remaining 5% of shares by the end of
2023. For accounting purposes it is assumed the Group has 100% control see accounting policy in Note 1 and Note 23 related parties.
** Creo Medical SL holds 100% of the shares in these entities.
*** Creo Medical Limited holds 100% of the shares in these entities.
Assets under construction in the year relate to the improvements to the additional building purchased opposite of Creo House at Chepstow.
32. Parent Company trade and other receivables
(All figures £’000)
Current:
Other debtors
Social security and other taxes
Prepayments
Total current
Non-current:
Amount owed by subsidiary undertaking
Total non-current
Total trade and other receivables
31 December
2022
31 December
2021
139
–
83
222
118,876
118,876
119,098
19
20
41
80
89,131
89,131
89,211
Amounts owed by subsidiary undertakings are unsecured and repayable on demand. Interest is charged on the debt at a rate of 3% per
annum. An expected credit loss provision was calculated for the other debtors and amounts owed by subsidiary balances; both were deemed
immaterial and therefore not recognised.
163
Strategic ReportSustainability ReportCorporate GovernanceFinancial Statements Creo Medical Group plc – 2022 Annual Report & Accounts
Parent Company note to the financial statements…continued
33. Parent Company trade and payables
(All figures £’000)
Current:
Derivatives
Other creditors
Interest bearing liabilities
Total current
Non-current:
Interest bearing liabilities
Total trade and other payables
34. Staff numbers and costs
(All figures £’000)
Wages and salaries
Total remuneration
(All numbers)
The average monthly number of employees during the year was as follows
Employees
31 December
2022
31 December
2021
–
2,387
108
2,495
2,087
4,582
100
3,811
–
3,911
–
3,911
12 months to
31 December
2022
12 months to
31 December
2021
490
490
652
652
12 months to
31 December
2022
12 months to
31 December
2021
7
7
7
7
Staff costs are paid by Creo Medical Limited or Creo Medical Inc to the Directors. A proportion is then recharged for the services provided to
the Company during the year. The total Directors’ remuneration including details of the highest paid Director can be found in Note 6.
Creo Medical Group plc – 2022 Annual Report & Accounts
Parent Company note to the financial statements…continued
33. Parent Company trade and payables
(All figures £’000)
Current:
Derivatives
Other creditors
Interest bearing liabilities
Total current
Non-current:
Interest bearing liabilities
Total trade and other payables
34. Staff numbers and costs
(All figures £’000)
Wages and salaries
Total remuneration
(All numbers)
The average monthly number of employees during the year was as follows
Employees
31 December
2022
31 December
2021
–
2,387
108
2,495
2,087
4,582
100
3,811
–
3,911
–
3,911
12 months to
31 December
2022
12 months to
31 December
2021
490
490
652
652
12 months to
31 December
2022
12 months to
31 December
2021
7
7
7
7
Staff costs are paid by Creo Medical Limited or Creo Medical Inc to the Directors. A proportion is then recharged for the services provided to
the Company during the year. The total Directors’ remuneration including details of the highest paid Director can be found in Note 6.
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Anything is Possible
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Creo Medical Group plc
Creo House
Unit 2, Beaufort Park
Beaufort Park Way
Chepstow
Wales NP16 5UH
United Kingdom
Tel: +44 (0) 1291 606005
Email: info@creomedical.com
www.creomedical.com