Creo Medical Group PLC (1RC.SG) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Creo Medical Group plc Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Craig Gulliford, CEO. Good afternoon, sir.

Good afternoon. Thanks, Lillie. Thanks for the introduction, and good afternoon, everybody. So yes, welcome to our interim results for the first half of 2025. Happy to say that the first half of the year -- first 2 quarters on budget for the previous -- 2 or 3 quarters before that were on budget. So we're delivering time after time. I know there's an expectation and a need for everybody to see us continue to grow the business, grow the business faster if we can. But at the end of the day, we're executing on our quarterly quarters -- quarterly by quarterly results, and we've got high confidence for the second half of the year. Obviously, we're close to the end of Q3. We're not changing guidance, but we're confident of where we're heading when we look at the guidance. And I know there's a range out there that people are asking about, but that's where we are at the early stages of this kind of ramp up in our revenue. If I look at the product range, as you see here, we've got multiple indications, multiple products. It's interesting that the first half of this year, the majority of the revenue in the first half of the year has come from the Speedboat range of products, Speedboat UltraSlim, Speedboat Notch, that range of products. We launched SpydrBlade at the end of 2025 -- the very end of 2024, sorry, going into the beginning of '25 and our clearance in the U.S. came through for SpydrBlade Flex at the very end of Q2 into Q3. So the materiality of any revenue from SpydrBlade Flex and MicroBlate Fine and the other devices won't impact our results until the second half, which is another reason why we have confidence over the second half number. And at the end of the day, we launched into this venture with a startup to dominate endoscopy to bring advanced energy into endoscopy and change people's lives moving endo -- therapy from the endoscopy room into -- from the operating theater in the end -- on to the endoscopy room, which we are doing with Speedboat, we are now doing with SpydrBlade, and we are now doing with MicroBlate Flex and MicroBlate Fine as part of those limited market exercises. So it's a multiple product platform. And the product platform will grow as you'll find out and we get into the product road map with the bipolar range of products that are well underway with our partner developers as we speak. So it's 2025 first half highlights, strong growth in Speedboat sales on plan. So we're indicating 40% to 60% growth. I know that's a range, but we're early. So it's important that we have a broad range because things can change quite significantly with some bulk deals that we have, particularly coming through the buying patterns in the U.K. We've added a number of customers to our core user base. Our focus for the first half of this year and towards the end of last year indeed has been more about increasing utilization with our customers rather than just blanketly trying to increase our customer base because you could see we know how to train on Speedboat, but we also knew that we'd have a range of products. So moving into the latter half of this year and into next, our customer acquisition costs and challenge go down as we increase the number of SKUs and the product codes that we have to function with our generator. Obviously, during the first half of the year, we completed the transaction that -- there was a lot of discussion and announcements around the acquisition of 51% of Creo Medical Europe by Micro-Tech. And that was a strategic transaction as well as a financial transaction. So the EUR 30 million sale of that side of the business has been a terrific success. Having a strong joint venture with almost equal stakes of Micro-Tech secures that strategic transaction. And the 2 key strategic elements of that transaction beyond the cash and the support that it gives to the balance sheet as well as the optionality in future over that cash, depending on exactly how the business develops and what our stake ultimately ends up with the business is the strategic drive to help us introduce our products into China and Micro-Tech are probably the best alternative and partner to work with as they help us, and we're engaged with them as we speak, as expected to look at introducing CROMA and the entire range of products, not just the first product into the Chinese market as part of the bipolar strategy into China, which is a huge market. Those numbers are not baked into our expectations and our guidance in the market because that's a huge complicated market, but who better partner than Micro-Tech to work with. So we have skin in the game for that activity. And we're also utilizing Micro-Tech alongside a number of other outsourced design and development houses where with our core design underway and under control with the initial products, which were the hardest products to get over the line and then technically deliver, which we've now delivered, we're able to outsource the development of a broader range of more commoditized lower-priced devices to complement the overall SKU platform for the CROMA system. And that's -- one of those key products is being developed with and for us by Micro-Tech, and they will ultimately be our manufacturing partner for that product and potentially others as we move from being exclusively manufactured in Creo to far more of our product by volume, but to a significant extent over the next few years will be manufactured outside possibly the U.K., but certainly not by our own staff as we move now into a design product delivery, sales and marketing function for our business now that's the heavy lifting of R&D and the main science behind our products is overcome. So that leaves us with a healthy cash balance at the end of June as exactly as planned and as forecast and revenues up GBP 2.2 million, up from the first half of last year. Margins are improving. They will continue to improve as we evolve our manufacturing strategy and reduce some of the overall costs and complexity in the business now that we're coming to that point where the products are finished, and we're just rolling out the new products as they come with our partners. We've done a huge amount of work over the last 12 months in reducing our underlying operating costs. That's partly because of the deconsolidation of the Micro-Tech -- of the Creo Medical Europe business. It's also just a natural function of the large heavyweight regulatory design, development, manufacturing, processing -- process challenges that we've been overcoming with Speedboat, SpydrBlade, MicroBlate Flex, MicroBlate Fine, the resources that we have are just naturally coming off that. So there's a determined effort to drop that cost base. We expect that evolution of the cost reductions to continue into 2026 as that natural evolution as we simplify the business and we're working with partners in more areas than we are fully funding the design and development process right the way through to manufacturing that we've resolved those core manufacturing process challenges. And let's not forget that those process challenges are not unique to us, we're possibly the only company that's overcome some of those manufacturing challenges associated with bipolar for cutting and resection of tissue. Even our partners Intuitive who we know have challenge with -- challenges with that despite their immense resources they've been putting into it. So we've got positive outlook with H2. We're obviously a few days towards the end of Q3. So we've got very good line of sight on to execute another quarter that looks like it's going to be on budget. And again, very clear line of sight towards Q4 number. It's quite a big jump in Q4, and that's driven by buying patterns here in the U.K. with -- through the NHS supply chain where we have our products on the supply chain frameworks, including some bulk deals that customers can acquire that volume for the next 6 to 9 months. And typically, they get -- they come through now in Q4. There's a couple of those deals that landed in Q3 as well. So again, we see the business operating, the revenue lines are growing, the usage patterns are increasing and the fundamental use case and the ability to train on our products is being well understood and maturing. And the actions taken to reduce the cost base by GBP 5 million annualized will come through for the full year with a 30% reduction in overall costs. And then that will continue, but not quite at that level, but there will be a sustained reduction in our overall costs going into 2026 as we become much more of a commercial product design, development, sales and service organization through our direct channel in the U.S. and our distribution channels around the world, including now Creo Medical Europe who is increasingly operating as our distribution channel across Europe. This is the same slide that we had previously. What we're scaling isn't just the number of people using and the procedures that are being done, we're also scaling the volume and quality and range of clinical studies that are being undertaken with all of our products in varying different indications. You can see the ranges there. We've got upwards of 500 cases that have been put into some form of clinical study, publication or registry data that is controlled -- or will be published. And that is increasing exponentially as we roll out additional clinical sites where we're enrolling more sites across Europe for studies with things like SpydrBlade on Z-POEMs and Zenker’'s procedures, which we'll touch later on as well as not forgetting the clinical study that we were running alongside Intuitive and the MicroBlate Flex study for the ablation of lung tumors here in the U.K. and in increasing sites across Europe. So -- if I go back 2 or 3 years, we had 2 or 3 physicians running 2 or 3 studies or registries in 2 or 3 countries looking at 2 or 3 indications. We now have upwards of 12 indications being researched with physicians numbering in excess of 45 sites across the world, and that's increasing all of the time, and this will become an ongoing part of our business, which is obviously the natural part of developing medical device businesses in the U.S., the U.K., Europe and beyond. So our product range covers 2 fundamental aspects of GI and gastroenterology. So the top -- the blue chart on the left is data that's gathered from market reports based on current procedural rates of the sort of interventional what they might call third-space endoscopy procedures where high-end, high-value, high-margin products like Speedboat, SpydrBlade, MicroBlate Fine and the range of products that go alongside those fulfill, and that is growing quite healthily. But that's driven fundamentally by a shift in endoscopy becoming more of a therapeutic physician -- profession as opposed to just a diagnostic profession. And those are -- these are the devices that are spearheading some of those big interventional procedures where we're removing the need for patients to have colectomies or we're removing the need for people to have Heller myotomies in the upper GI into the top of the stomach where they've got swallowing disorders or Zenker’s diverticulum, these kind of indications they're replacing surgery on a very kind of specific like-for-like basis. The products at the bottom, the bipolar snare, grasper, knife and the bipolar sphincterotome, these are lower cost, much higher volume procedures that are currently done on a regular basis in very high volumes. So then the volumes at the bottom, again, taken from market research reports, not from our data, there's many millions of these procedures happen worldwide every day. A bipolar snare, for example, could be used multiple times a day in the same unit on a daily or weekly basis, even through weekends where they've got busy practices. They're not high volume, high-priced devices, so they're going to be in the region of $15 to $30 depending on the market and the snare. What we have solved is the ability to deliver a bipolar Advanced Energy version of that product that can be price competitive the existing commoditized old-fashioned monopolar tools. And there is an acceptance in the industry that bipolar is better than monopolar, advanced bipolar and Advanced Energy is also better than those. But the price point will be such that it's not going to need huge amount of clinical evidence for people to adopt. Customers will buy these at small premium over what they currently buy their monopolar devices for. And that means we have a leapfrog event moving into the next 12, 18 months where our bipolar range here on the product road map evolves. We're design freeze or beyond with all of those devices as we sit here now executing those devices through the FDA and our notified bodies here in Europe, relatively simple devices rendered using our tech to make them bipolar, so they're low risk. And we're delivering those with our outsourced partners. So these are design and development partners like Micro-Tech in China on the bipolar grasper and we have a company in the U.S. who ship more than 20% of these type of products into the U.S. market and manufacture them in the U.S. They'll be manufacturing the advanced bipolar version of the snare, for example, for us. And then there's another company in the EU where it'll be helping us complete the design and development process for the grasper and the sphincterotome -- sorry for sphincterotome and knife. So this requires far less resource from us. Our intellect and our specialty is the tech and the integration of our tech into these modalities. That's what the capital deployed to date has overcome those significant challenges. And we remain the only company that has got and brought Advanced Energy into the GI space. And we remain the only company that can deliver a bipolar waveform for us to carefully resect and dissect tissue, including Intuitive who've tried that with their products and haven't fulfilled the requirements. So we get that demand for GI. And obviously, that spills over into some of the licensing conversations that we'll touch on later on. But I can't overstress how important that opportunity becomes for us as we develop the market over the next 12 months, and we have a solution for every endoscopy room in every country in every setting with Advanced Energy for one or all of the procedures that they undertake with energy in today's world. So the product adoption, obviously -- and that's what we're all about. It's what we obsess about. It's all about execution in the U.S. and Europe and beyond. We have regulatory clearances of the SpydrBlade Flex product that came through in U.S. in the summertime this year, U.K. and EU slightly before that. So that's going down well, but it still has to be added to hospital administration systems so that customers can buy it. I was personally with half a dozen or so customers in the last few weeks and I think all of them -- of those 6 were either waiting for Speedboat Notch, SpydrBlade, CROMA or all of the above to be added to their administrative systems in the U.S. in order to be able to purchase the product. So clinically, the demand is there. Administratively, that's where some of our challenges have been. We also announced earlier in the year that the American Medical Association have cleared the way for there to be a CPT reimbursement code for specifically the procedures in the lower GI and the upper GI that Speedboat was originally designed for. And that is the measure of intent, and it's a great step for the AMA to make, which is incentivizing the private healthcare market, which is the U.S. to encourage physicians to start the process of getting themselves trained, adapting their practices, adapting their marketing campaigns because they are private companies that are there to make money to build the referral pathway so that in January '27 when the reimbursement code comes in, physicians who may earn a certain amount of money for their colonoscopy, say actually they earn $300, they're likely to be able to earn in excess of $1,000, possibly $1,200 for these kind of procedures in the same room with typically the same resources. But there's an investment in some equipment and in particular, getting trained and educated so that they can be ahead of the curve. But there in the U.S. and here in the U.K. with the NHS supply chain data that we have announced previously where there are significant savings to be had that is driving not so much the clinicians to drive adoption, but we are now seeing at administrative level, CFO-type level, customers are acquiring a system because it's going to shorten waiting time and it is going to reduce costs and it is going to move the point of care from operating theaters to endoscopy rooms. And with that in mind, we expect organizations like the NHS supply chain who will be launching at some point in the next few months, the campaign for NHS supply chain to be promoting this procedure and this product and what we're doing to the NHS in order for them to start moving their patients from surgery into these kind of outcomes where we get the savings. That's at systemic level, as patients start to get treated endoscopically. And obviously, that is the subject of every ounce of every day and every minute of every hour for the whole team as we become largely a sales organization with a cracking design team that help us design and develop and roll out more products over the next few years as and when we can and as and when we can afford to. Just touching on the progress of MicroBlate Flex. That's the ablation program that we've been running. We have 2 clinical studies for those that have been following us. One of them is an ablate and follow study where we're ablating lung tumors, primarily using the Ion platform from Intuitive here in the U.K. We also have some study sites in Europe in Amsterdam. We're also doing additional sites and a post-market commercial case basis with the Intuitive program. That's going well. We now have 2 sites up and running with 3 essentially about to go in Europe and some more to come. But the goal really is to build a body of evidence, whether it's under the clinical study or an overall post-market volume of cases that have been done that deliver on the safety profile that we're confident that we'll be able to achieve and that it delivers the initial clinical outcomes that we need in terms of stopping those tumors in their tract initially. And then we'll be tracking those from a long-term survival perspective so that over the coming years, we'll be tracking 1-, 2-, 5-year survival rates and recurrence rates for these kind of cancers, particularly in the lung, which is the largest indication of all of the cancers by a long, long way. I think it covers -- there's as many lung tumors diagnosed as there are all of the other top 5 cancers combined. And yet there's no systemic screening for lung tumors at the moment. But that's what's changing with the advent of the Ion robot and other more sophisticated and less invasive diagnostic techniques. But in terms of the progress, we expect the ablate and follow study to complete during the course of the next quarter, so it's certainly by the end of this year. We also expect the ablate and resect study, which is a smaller number of patients where we're resecting tissue from patients, tumor tissues that have been ablated. So allows us to calibrate the immediate performance in tissue versus what was predicated on the scans beforehand. But what that means is the kind of key gating items for us to start the commercialization of that product with and on alongside Intuitive and the Ion team, that starts to come into the equation during 2026 when we'll -- we need to sit down and start thinking about how we then commercialize with the initial body of evidence developed here in Europe and where does that take us then into the U.S. market. But first things first, we need to complete those clinical studies. So I think we touched on this to some extent again already. So the user adoption is accelerating. So the number of users, we haven't focused on just adding more and more users. Our focus for this first half of this year was increasing utilization and increasing revenue per customer, which we've delivered. And ultimately, we're driving more and more procedures and more and more indications. Yes, we would like this to be going faster. We are working, obviously, to make this go faster, but there's a number of things that have to go behind this in order for physicians to adopt, not so much fully, but allow the increase in patients that they want to see as they have referrals into the endoscopy room as opposed to going into surgery and also working with key opinion leaders who will be doing lots and lots of therapy and for lots and lots of different reasons and lots and lots of research where we're never going to get 100% of their volume because the research that they will be -- these sort of centers will be doing will always be looking at different alternatives for treating different versions and different aspects of different kind of therapy. But we expect to see this user adoption increase over the course of the next 18 months now that we have more products, more SKUs on the platform. You'll be seeing that happen now in the U.S. where it's easier and it takes less time for our sales guys to make sure that the capital equipment, the $30,000 or so for the generator to get through the value analysis committees in the U.S. It's a much more straightforward process once we have more products and more indications on the system versus just a single product. That is starting to impact on H2 this year, and we see the customer acquisition costs and the rate of acquiring customers increasing during the course of '26 quite steadily. And in particular, then once we launch the bipolar range, that will also help us place more and more generators and help accelerate the adoption of those higher value, the initial products. Just touching on one aspect of some of the clinical studies that are taking place. We're driving a clinical study or I say the physicians that we work with, some of those are driving a clinical study utilizing SpydrBlade Flex, looking specifically at the Zenker's diverticulum indication. It's not the only indication for this device. This device is being used for a multitude of general surgical applications, which is something that we expected as well as the Zenker's case and others. This is a great starting point where we just get terrific data, which we expect to be publishing on the back of SpydrBlade and it's also driving us to run and open up additional sites with SpydrBlade across Europe and the U.S. with the system and with the CROMA platform in order to participate in some of these studies. That would just generate a great data for Zenker's, but it also will underpin the fundamentals of why Advanced Energy and our software with the CROMA platform adds particular clinical value, not just for SpydrBlade and Zenker's but across the board. I think in previous presentations, we've looked at publications that have happened and video publications and video symposium using Speedboat, where we've been doing upper GI procedures similar to Zenker's, but larger receptions where patients come back and they have almost zero or dramatically lower follow-up procedures compared to what they currently use in terms of monopolar tools for that particular indication. So we see a lot of opportunity for our products, and that is something that we continue to pursue even with the reducing cost base. So just finally, I think we've touched on some of this MicroBlate Flex. We've got over 50 cases completed overall. The clinical study for the ablate and follow will complete during Q4. There's a 12-month follow-up for the final patients. So -- but what it does mean is in 12 months' time, we know the study will be complete. There are interim reporting milestones along the way. So there will be an interim publication opportunity on the back of the final patient being treated as well as obviously a final publication opportunity at the end of the study next year. And the ablate and resect site, we expect that study to complete enrollment during the first half of next year. Data is being presented on this already. So there was an interim publication opportunity at the halfway point of enrollment, and that is expected to be published at the ERS conference this week coming in Amsterdam. We also have quite a large registry coming together. We'll be collecting post-market data alongside the Intuitive sites. All of which underpins the partnership where between us and Intuitive, what's imperative, not just with this kind of technology, but all of our technology is, to generate strong clinical benefits on the back of improved or at least equivalent, but in our case, improved safety for patients in order for us to then start to commercialize. And that's what we're doing here with Intuitive. We're patiently gathering the data that we need and that drives us into the discussion around how does that form into the commercialization as that hits the road during the course of 2026 and beyond. There's a lot of opportunity there. It's not exactly -- clear exactly what those numbers look like for us. And as we reset our numbers and -- over the course of 18 months ago, we said that we wouldn't put speculative numbers into our guidance. We haven't done that. And so some of the upside that sits within this until we understand a lot more about what is going to happen over the course of late '26 into '27 and beyond, we'll up issue guidance as and when that happens. That being said, one of these sites at least will go to become a full commercial sales site during the course of Q4. If you remember, for those that have been following, we agreed with these physicians and with Intuitive as part of the partnership that 20 cases will be free for those initial sites so that we have control and make sure that we've got good data being acquired and gathered in the systems that we've got, so it can be published. Once those 20 sites are done, then those sites have to purchase the equipment commercially, as you would expect, and we have already got the beginning of sales with that device through NHS supply chain here in the U.K. at a price point of well in excess of GBP 5,000 per device. So that's obviously a terrific margin, high price, relatively low volumes, but still a typical unit running at a run rate will be utilizing somewhere in the region of GBP 120,000 or plus in revenue for that device at the current run rate in terms of the patients that are being treated. I'll flip to you, Rich.

Yes. Thanks, Craig. So Craig has covered probably most of the topics on the next couple of slides, certainly in high level. So, revenue point of view, 40% up over the equivalent period in H1 '24. We expect to be 40% to 60% up year-over-year. So growing from GBP 4 million in 2024 to somewhere in the region of GBP 6 million. If you take a midpoint of that number in 2025, we expect that growth to continue into the future. Right now, we're a few days away from the end of Q3. So we've got a high degree of confidence on our Q3 number being in line with our internal plan. And it's about a 40%, 60% split Q3 to Q4 in our overall plan for the second half of the year. So good progress, good traction -- and good progress and traction across all regions. Predominantly, we have U.K. bulk buying deals in Q4, which sees our Q4 number higher as a proportion of sales in the year right now, and as we go into the future and other markets start to take over the U.K. as dominant markets, we'll have less and less reliance on a higher Q4, but that is time to come. And as and when our revenue moves into the double digits million range in a -- in hopefully not too distant future. In terms of our business that we disposed of during the year or we partially disposed of, so 51% -- that business continues to do really well. We still have presence on the Board. So we still get to see the numbers. That business itself will grow in revenue this year. As a result, it will grow in EBITDA contribution to ourselves. We will have an EBITDA contribution from that business. We booked a GBP 1.2 million contribution in the first 6 months of the year. We expect that to be slightly higher in the second 6 months of the year, predominantly because we will own the business as an associate for the full 6 months rather than for 3.5 months -- 4.5 months, apologies. On sale, we actually booked an investment asset of GBP 29.5 million, which was the pound equivalent of 49% of 72 million, which is the entity value. We originally purchased the business for somewhere around GBP 28 million to GBP 30 million all in. So when we booked the deal this time, we booked a profit of around about GBP 26 million. That was a profit after paying back bank debt, paying fees on the deal itself and removing the assets that were sat on all the balance sheets, whether it was the assets on the European balance sheet or the goodwill balances that were sat on our internal. So it was a very good deal, brought in a large amount of cash, and it will continue to bring in both a noncontrolled interest, so that GBP 1.2 million for the first 6 months, plus an ongoing cash dividend out of that business into the future. From an operating cost perspective, first half of this year, we announced at the back end of 2024 and into 2025 that we were expecting to take our full year costs down by around about GBP 5 million. We've taken out over GBP 3 million in the first half of the year compared to the first half of last year. We expect to be at least that GBP 5 million number from a full year perspective. And we've got other means and other ways in which we will be looking to take cost out of this business going into the future to make sure that we minimize our costs, maximize our revenue and maintain or grow our gross margins with the aim that we become a cash positive business, as we've said, within the next 2 to 3 years.

So I guess, in summary, we see increasing utilization on the core products. We'll see a broader increase as SpydrBlade flows through into the numbers more fully this second half, up to the end of '25 and into '26. Speedboat Notch and derivatives of the platform are adding SKUs to the platform. So customers need to have multiple boxes of equipment on the shelf because they're dealing with indications that come through the door. And that is incrementally driving increasing utilization of revenue. And we see the rollout and adoption of customers over the course of the next 18 months, as I said before, becoming less costly and more efficient for us as we are not just rolling out one product, which has a particular training element to it, a whole range of products, some that don't require any particular training at all. We'll continue to collaborate with Micro-Tech to grow the Creo Medical Europe business. As Rich said, financially, it's a great deal. It's contributing both in terms of the P&L and cash and dividends moving forward. We have optionality over that business if we choose to increase cash on the balance sheet, if we wanted to, in future, dispose of more or less of the business, who knows. But at the moment, we've got no need or intent to do that because the business is building nicely, and it's delivering on the kind of strategic benefits that we saw with Micro-Tech in -- more so than we originally anticipated in many ways. The strong first half performance is driven by Speedboat. The second half will be driven by additional SKUs and signing up new distribution partners in areas of the world where we have a distribution channel. And signing up distribution is more straightforward and it's a different exercise to what it was a couple of years ago where we have a range of products in terms of the Advanced Energy products, but we also have a wide range of the consumable Creo Medical products that we've picked up on the back of Creo Medical Europe, which we can still sell and distribute elsewhere. And the cost reductions, Rich looked at, some of them were particularly difficult and challenging for staff, but natural evolution of the business. We see that evolution happening further into 2026 without being too painful because it is a natural evolution of the business as we become product development, design and service company of selling these products overseas and delivering a product road map, which we have optionality over in terms of the product -- the byproduct products we launch because we'll be doing that through our partners using the design intellect that we have here in the U.K. now that those fundamental design challenges have been overcome. And developing relationships with Ion and other potential partners is important, but particularly Ion because that program is going really well. We've delivered on all of the promises that we've set, both ourselves and alongside Intuitive, and we continue to develop towards commercialization with that product. The other side of the combative program that we've talked about in the past continues. We have a lot of interest in our technology, but that's not something that we're publishing hugely. It's commercially sensitive, and it needs to be funded. If it's funded, then that will become something that we materially talk about, and we'll start to adapt and change our guidance if those things come in. If they don't, we're spending proportionately extremely little time and energy on that outlook. So I think that brings to the end the main presentation.

Craig and Richard, thank you very much for your presentation this afternoon. [Operator Instructions] I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed by your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Craig, can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Thank you. I think the first couple are financial related, so I'll just -- Rich will pick those couple up. Rich?

Yes, yes, sure, no problem. So the first question is, I'm going to summarize it. Quite a long question. We seem to have little IP value on the Creo balance sheet after the sale of the European business, basically why? All the IP that we have is internally generated. We cannot value up that IP from a capitalized point of view. So all the IP has been expensed over the years. But we do have a significant IP portfolio that we have on the Creo balance sheet. The business that we sold had very little in IP, if any, at all. It was very much a distributor business. Second question was European business of -- we had a gain of GBP 29.3 million in one release and the interim show of GBP 26.2 million is the difference tax. No, the difference is there's no tax liability. We are using our tax assets, deferred tax assets to cover any -- defer any liability. However, the liability is not yet a liability. We have now an asset on the balance sheet rather than an actual book gain. We'd only have a book gain if we eventually sold that business. Right now, the value of that business was 49% of 72 million. That's the GBP 29.5 million that is now -- sat on the balance sheet. The difference between one number and the other number is the fact we have to remove all the assets off the balance sheet. So it was an asset held for sale. So it was the difference between an actual book gain day 1 and by the time you remove everything off the balance sheet, plus we disposed of [indiscernible] during the year. So there was some various depreciation -- sorry, goodwill write-offs during the year as well. So the number of GBP 26.2 million is the correct number that is in the stats for this year. And the final question before we move on to Craig because the rest are then more to do with sales and commercial traction. Is it possible to tighten up the guidance of 40% to 60% of revenue or explain why it's such a wide forecast? It's 800,000. It's not a hugely wide forecast. Right now, we have quarter 4 to deliver. We've got full confidence in quarter 4. We expect to be in that guidance and hopefully in the higher end of that range in the guidance. But right now, we need to work our way through Q4 and get to at least in that 40% to 60% range before we tighten the guidance up.

Thanks, Rich. Next question, I think, is really looking at -- I think we've covered some of that. Is there a dedicated task force in U.K., EU, U.S. to highlight the undenied benefits of our technology, the procedures and so on. I think in -- the short answer is yes, working with NHS supply chain and the NHS I've had -- I'm in dialogue with David Lawson, for example, who heads up NHS innovation, reports into Wes Streeting. There is a significant top-level desire to use technology such as this to change the way in which healthcare is delivered. That's fundamentally what has to happen here. You can have all the sales team in the world with all the benefits, but unless the juggernaut starts to move more people from surgery into interventional endoscopy rooms, and that has to come from us working with physicians to generate the data, the data then working with the leadership and the infrastructure and the NHS in the U.K. or the AMA and the associations in the U.S., and that's what we see happening. So the NHS supply chain saves a significant amount of money as per the question. We're using that data ourselves, which the NHS have provided for us, which has helped us over the last 12 months in a number of sites here in the U.K. But we anticipate as the value-based procurement program gets rolled out by the NHS supply chain alongside some of the work that we've been doing in [indiscernible] that will then be published through the NHS into the NHS itself. So as this is a way to reduce cost, reduce waiting list and so on. So the simple answer is, there is leadership in those markets to do this, but sometimes it does take time. Next question. So of the trials, it's difficult to predict the clinical trials. I think we touched on it already. We've got a lot of trials running and increasingly, we'll be adding more and more. Some of those are clinician-led studies and some of those are Creo-led studies, but most of these are now being now clinician-led studies. They're not clinical trials, we're not running a clinical trial to determine whether or not we can market the product or whether we can get clearance, these are studies to prove a particular endpoint, a particular benefit. And so there's a number of those that have completed publications, are going out. We have video publications that are published at different conferences all of the time. And as I said earlier on, we've got a key study and a key trial, which is probably one of the most important for us right now is the MicroBlate Flex study, which is for the lung tumor ablation alongside Ion. So for the -- the first data will be published in the coming weeks at ERS in Amsterdam. And then we have a couple of further study publication opportunities over the next few months as we get through completing the enrollment and completing the study towards the end of next year. Next question was, there's little about the current position with future Kamaptive partnerships. As I said, we've taken all of the cost out of the business with the exception of one business development resource at the moment to focus on that Kamaptive pipeline. We are in dialogue probably with all of the robotic companies in the market at this point in time or entering the market. There's 2 or 3 others that are non-robotic. So we are continuing to work on those. But that's just not part and parcel of our core business that is simple for us to understand, and we develop that if inbound comes into -- turns into real opportunity with cash and outcomes, there will be a cost and there will be an upside, and we'd obviously update the guidance related to that. So there's a lot happening behind the scenes and the licensing of our technology becomes obviously a clear opportunity moving forward, but that's not something that we're making a huge play out of publicly. Update on NICE. So NICE as an organization has changed. There's some leadership changes. That's part of why I've been on a number of calls with David Lawson. From a leadership perspective, it is kind of becoming more integrated into NHS supply chain. So it's not just clinical excellence. It's also part of the procurement and value being driven into the NHS. So I think we've given an update on that already. Next question, has any site ever reversed its decision to use Creo's products? Having adopted any or gone through the training yet? So then after a period of time, ceased to use products? If so, why? So I think the simple answer to that is, we have had a number of those customers, particularly in the early years when our device was too fat to go down the endoscope. So we had a number of those customers. But what we are seeing is now that we have the UltraSlim and the other -- the Notch version of Speedboat, a large number of those that have paused in the early days have either adopted or are in the process of adopting. There are obviously some that -- a small number who have tried done cases and don't do them anymore. They tend to be the endoscopists who've taken the time to spend months or years learning in Japan and the Far East how to use the monopolar tools, and they've stuck to what they do at the moment. But it's not a significant concern of ours as we develop the business. Rich, do you want to pick up the cash burn one?

Yes, I'm trying to follow it through. Cash burn at the moment and cash at year-end, similar sort of questions. We are trending right in line at the moment with the guidances out in the market. I know our brokers and NOMADs, et cetera, wouldn't allow me to say much more than that. But right now, we are trending in line with where we said we'd be, just like we are trending in line from a revenue point of view, and we're probably trending in line or slightly better from an OpEx point of view. Profitability still 2 to 3 years away, one of the questions. Yes, it is absolutely 1, 2 to 3 years away, but our cash profile shows us getting to that profitability without the need for additional raise. And if we did need more cash for more protection on the balance sheet and to take any cash questions off the table, we now have an asset in Europe that we could fund against in terms of debt. We could sell the business in Europe. That's another question somewhere other along the way. I'm trying to answer a few at the same time. We could sell that asset to Micro-Tech if we wanted to, it would be relatively easy to go to Micro-Tech to do that. Do we want to do that right now? Absolutely not. Strategically, it's not in the right thing to do for us. We've got a lot of traction with the business. It's very profitable. It brings cash in. It's got strategic benefit of going into China, strategic benefit of them producing product for us on an R&D, an OEM R&D basis. So it's an excellent relationship and trending at least as good as we expected it to be, if not a lot better. So I think we've got lots of optionality within the business if we need to fund the business in a different way from equity. So I think I answered quite a few of them in one...

A few of those, yes. There's a question about what can we do to increase the share price beyond just doing what we do, deliver what we say we're going to do and how we consider the markets. I think it's fair to say we can continually look at alternatives in terms of where the business needs to be, what optionality we have on a number of fronts. We're looking -- we have got optionality on upside on the revenue side of things. We've got optionality on how we deliver continued cost control and cost reductions, and Richard talked about optionality in terms of how we can monetize assets to generate nondilutive cash to manage through the breakeven analysis essentially. You touched on how we may or may not treat Creo Medical Europe in the future. Do we expect to raise additional funding? That's not something that we can really talk about. It's not something we expect to do unless the specific circumstances. So I'll leave that one as it is. We've already covered the question about how easy would it be to sell the remainder of Creo Medical Europe? It's an asset we could sell it. It's obviously ours to sell. There no restrictions on us selling that asset, and there are terms within the agreement that enable and set the framework for that happening.

I'll answer the easy one from Stephen. And if that's the right, Stephen, then I think it is. Stephen, it's been a long couple of days sitting on a call with you guys is perfectly fine, listening to Craig, saying the same thing I've listened to him to say for the last 3 days, honestly. I can't quite get animated like I probably would if I was -- if this was the first one out of the gate. So apologies, I'm not in a bad place. I'm not grumpy. It's just been a...

I think, Stephen, if it's -- we are delivering on growth. We see great news with the sales team. I've spent some time on the road with the sales guys in the U.S. over the last couple of months, and they're in a different place to where they were a couple of years ago when we had one product. And if you -- those of you who were around, we had some technical challenges with that product. We don't have that anymore. We've got great conversations going on with distributors in LatAm. The work we're doing with the clinical studies, our clinical advisory boards, it's all super exciting. And if I look at the platform that we'll be delivering in the next 12 months, that isn't just fantastic for the business. It helps us sell more product next year, but that is a statement in the industry. In 12, 18 months' time with that range of products, that is a statement to some of the larger corporates in the industry that are the names that we've all know about, and they all kind of know who we are. That's not something we want to do with that right now, but that is hugely exciting, and it's bringing to life what we've worked for the last however many years to bring to life. We are doing that on a daily, weekly basis. I was at a case Friday before Labor Day, in Fort Lauderdale, Friday afternoon, a 41-year-old guy, he's got swallowing disorder for various reasons, it's a particularly challenging case, and there's some humming and harring in the room with a junior -- more junior doctor about to undertake the case with a Speedboat technology. And the chief walks in and says, "No, this is what Advanced Energy is for. This is a patient that we can treat here and now and he will get a curative outcome." 3 hours later, yes, it's a long late finish on a Friday, but that's a 41-year-old guy who probably will be -- will have eaten a burger within the week of that procedure, and he probably hasn't been able to go out and have a meal and a social life with his mates for years because he can't eat a burger and drink too much because he's on baby food. He isn't anymore. Yes, those are the things that excite me because we're doing it all of the time. I don't need to keep track of how many cases we do because they're happening everywhere. So is it exciting to do this kind of stuff? I'd love to say it is everybody, but it's a fairly kind of one-sided and noninteractive experience. But yes, we are super excited about the next couple of years with the product range that we've got and the traction that we're making.

There's a couple of questions around deferred tax and EBITDA breakeven. So currently projecting 2028 breakeven. Can we recognize deferred tax assets on the balance sheet earlier or at all? Yes, we definitely can. Right now, it's slightly beyond that event horizon where I think we would get it through with the auditors to recognize those deferred tax assets. We state what they are in terms of total available deferred tax assets. It's on the agenda for this year's discussions with the auditors. I would imagine we'd be recognizing as we get slightly closer to that breakeven point. We will definitely be recognizing when we get slightly closer to that breakeven point, whether it's '25 or '26 is up for debate with the auditors this year and next. Tariffs are not really an issue. We have incurred extra costs to move into the U.S. We sell product into the U.S. at a transfer price, which means it's not at the full valuation of the end sales price. There's been a slight impact of tariffs, but at the same time, our pricing has gone up in the U.S. to reflect that and new technology that we've introduced in the U.S. at the same time. Breakeven earlier in 2 to 3 years, if there's a lot of pull from our product in the U.S. in the next couple of years, if we move into the Chinese market with Micro-Tech and if there's more success with the MicroBlate Flex product, the lung product, there is a chance. Right now, we are marching on and making it that we definitely do it in 2028. But if we can do it sooner, we absolutely would, and we'd love to do it. And I think some of the question about travel and related expenses, is that the reduction? No, we took 40 heads out of the business in 2024. We went through a process with the staff. We went through the process and it was a morale issue as well going into 2025. We have recovered from that, and we are -- although you may tell from our faces, we are definitely happy with where we are at the moment. And hopefully, if you talk to staff internally, you'd see that as well. There's a question around sales and growth in Europe and U.K., it has been relatively flat from last year, but the growth in the U.K. and Europe predominantly comes in the second half of the year as we've got the bulk deals from U.K. hospitals. So you'll see a growth in the second half of this year, along with the growth in the revenue. I'm catching down. So Steve did say it was, Stephen. Craig, I'll leave you for the last one. I think if you want to do more great human stories.

Yes. I think there's one on the bipolar products. So the really exciting thing about those is we can go into an endoscopy room. We'll have an Advanced Energy product for at least 9 out of 10 of the situations where any endoscopist where they use typical monopolar energy today with advanced bipolar. And because we've got the process dialed in terms of how we manage the material science and making that work, we know we can deliver those at a cost of goods that easily makes us competitive on price. So it becomes tactical pricing at that stage as to how we introduce that to the market, maintain pricing, so it would be an incremental margin over above today's products. But we're in a position then to really get a huge impact into those endoscopy rooms. That's super exciting. The human story is about your patients like that chap who'll be able to swallow again -- we had a similar case. I was in the car on the way home from the airport actually when I flew back from States talking to a doc who's treating the patients in Greece, a similar patient, that was an 18-, 19-year-old child who had been suffering from this similar indication for a number of years and basically been on baby food again for 2, 3 or 4 years. And, yes, after a 2-hour procedure, that young chap is able to go home and eat is tzatziki and a kebab for the first time and go and have a good time. And I think you forget sometimes that these kind of things don't just impact people clinically, it's their life. If you can't eat, it's difficult to have a social life and if you have some of those symptoms that you get with -- collectively and those sort of things. That's why we get up in the morning. And the data that we'll be publishing for the ablation study through the study coming up in Amsterdam, I'll be there this weekend. These are the things that we get at. This is what motivates the whole team, and it feels great, to be honest. I think that's probably about it. Has there been personnel changes in the sales team? There's been a few changes with people in the U.S. It's very much a kind of hire and fire environment. We've adapted the team as well. So we've got 2 VP of Sales that cover 2 large areas, and they have sales reps that report to them. So we're just adapting the model to make it work as well as it possibly can for us, learning from some of the things in the past. But it's fundamentally, no, the sales team is largely the same, but there will always be some degree of churn in the sales team.

We did bring on some really good people last year for Latin America. So we've got a really good guy who runs the dealer network in Latin America, and he's made a big difference this year and particularly will now from the second half and into 2026. Is an acquisition we can make that would accelerate the commercial development and adoptions? Yes, there will be. We are continuing to look to see if there are acquisitions out there. We wouldn't have the cash on the balance sheet to do that. So if we did find something, we'd have to come back and fund that in a different way. It's not top of our agenda right now. But if the right one came on the table, then we would certainly look at it.

I won't answer Mark about the bike rise at the weekend because [indiscernible] maybe it depends if you can keep up. And then I think the final question before we close, the stories from the doctors are great. The life-changing utilization, how does that -- how does the two correlate? We've got sites where we're doing 100% of the cases with our product. But fundamentally, what we need to see is those sites drawing more customers -- not more customers, more patients through. So patients instead of going through the surgical referral pathway, they come through the referral pathway for those sites to be treated. All of those sites where we've got 100% utilization, they're increasing their utilization because they're seeing more patients come their way. And that is the case of smaller units as well as there's -- and centers within the Cleveland Clinic in Cleveland, where we get 100% of their case volume, but they're slowly increasing their referral pathways. So things like the AMA stimulating CPT codes and reimbursement, that is what fundamentally starts to shift the referrals into these kind of procedures.

The easy answer on the last one, the option -- were all recent options changed to 24p? The easy answer is yes.

The partnership question, the -- like I said, we've got a pipeline of potential partner opportunities. They're quite commercially sensitive. And yes, we are pursuing them. Can I -- am I going to sit and tell you and pontificate when that might be and try and when that could impact on our numbers? No, that's taken out of our guidance. If it happens -- we are trying to make it happen within a limited capacity because we're focused on sales.

Is Oldham still one of the U.K. sites? Yes, Oldham is one of our major U.K. sites. Absolutely.

Oldham is a great example of some of the contracts that we've got now with the NHS, where the whole volume for that site comes in typically in Q4 for all of the doctors there. There's now -- there's been some changes in the doctors there with some -- one of the doctors retiring, somebody else moving on, two new doctors have come into the facility, adopted the technology because it's there. And all of a sudden, we now have 4 doctors still doing the cases and increasing -- the case volumes going up. So the number of these bulk deals that we're doing with the NHS has gone up year-on-year and the volume for each of those customers has also gone up proportionally year-on-year as well.

There's a question. I think you might have answered it, Craig, but the bipolar products will only be marginally more expensive than the standard commoditized products are manufactured by a third party? Yes, they are very marginally more expensive and therefore, marginally higher in price to the hospitals, and they will be manufactured and developed by a third party. I think you answered all the rest other than how investors should look at the value of the business. I think you should...

I think the value of the business, I'll come back to -- if I look at where we are, where we will be, the potential in the next 12, 18 months, next year is all about executing on sales. And we also have to have work with our partners to execute on those submissions for the bipolar products so that they're in the market and cleared towards the end of next year. That becomes a statement to the industry, and that drives however you look at the value of the business at that stage versus today and the potential that comes from that is down to everybody. But I think it's fair to say that the share price doesn't reflect the true value of the potential IP that we have in the business, but that's what it is at the end of the day, we just need to keep executing this quarter, next quarter, first half of next year and that pipeline of program. And we've got a simplified business model. We've got optionality to continue to reduce and drive cost out of the business. And we've got basically the cost that we need for the sales to grow is constant and doesn't need to increase. I think other comparators in the U.S. for re-evaluation -- there's probably a number there. If we were to Google them, if there's a number of examples of businesses that have invested far more than we have in terms of the capital deployed to get to growth in revenue without getting to profitability that have been acquired off the market for [ 300 million, 400 million, 500 million ] or more million with one single product, we're going to have a range of products, which is very difficult to find a business like ours to directly compare from that perspective. But the valuations are completely out of kilter with where we are today given the current share price. I think we've answered the question with regard to Creo Medical Europe. Yes, we could sell it. There's an option to sell it. It's an asset for us to sell. Our intention is to keep growing the business, working with Micro-Tech to build a great brand, which is Creo Medical, both across Europe and the rest of the world and drive some of those strategic benefits for ourselves with Micro-Tech, so we can share some business in China in the coming years with their help, and they're the best company in China to help us do that and also give us access to more products that we may sell outside of Europe, whether that's commoditized products that we already sell or whether that's other products that they codevelop once they've finished the devices that they're developing for us on the bipolar range and will be manufacturing for us into the future. So I think -- and then I think that's it?

Craig and Richard, thank you very much for answering all those questions you have from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Craig, could I please just ask you for a few closing comments?

Yes. So closing comments, super exciting to be where we are. Yes, we're driving adoption every single day of the week, and it's growing wherever we look. So we're very happy about that. The product range is growing, and they're going well. We haven't had any product challenges as we've introduced these, which is always a risk with this kind of advanced technology. The road map for the next 12 months is terrific and the efficiency with which we can bring those products through registration is the orders of magnitude, more efficient time and cost-wise from where we were. The optionality of what we pull the trigger on next beyond that into the market is with us, and that's an example of how we can manage and control our costs. We see upsides on the revenue line in terms of how that may grow. There will doubt be some headwinds that we encounter along the way. So balancing those up is that 40% to 60% range given where we are on the growth curve but I feel comfortable about that optionality. And we've got options over how we can manage the cash to make sure that we manage the cash flow over the next 12 months as we get to that breakeven and set up self-sustainability. That's obviously the goal, but growth in adoption, growth in clinical benefits, and we're seeing significant growth in all of those kind of key areas, which is touch wood what we need to continue to see. If I look back over the last couple of years, we've had headwinds. We've had headwinds to some product challenges. We've had headwinds with products that were a bit later to get into market than we originally wanted. We don't have those immediately in front of us at this point in time, which is significant. And yes, super exciting for us.

Craig and Richard, thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that our management team could better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Creo Medical Group plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.