Kromek reports solid momentum through second half

Medical, security screening and nuclear detection technology company Kromek updated the market on its trading in the year just ended on Tuesday, confirming that after orders and shipments across its segments resumed in the final two months of the first half, it entered the second half with an “extensive” commercial pipeline and increased commercial activity.

The AIM-traded firm said that momentum continued through the rest of the year ended 30 April, as it delivered on previously-awarded contracts and won new orders.

As a result, it achieved “significant” sequential revenue growth in the second half over the first, and expected to report revenue and EBITDA for the year in line with market expectations.

The group said it was still maintaining tight cost control, improving collections and managing cash flow, resulting in its cash position at year-end being “slightly ahead” of market expectations.

“Specifically, in the second half of the year, progress was made in all of the group's business units,” the board said in its statement.

“In the medical imaging segment, Kromek's customers increasingly rolled out their next-generation products, based on the group's technology, such as the group's original equipment manufacturer (OEM) customer that previously awarded a medical imaging contract expected to be worth up to $58.1m.

“The installation of the customer's medical imaging scanners, which is occurring in multiple countries, saw a ramp-up in the second half of the year as planned.”

In the nuclear security segment, Kromek said it received new orders from government customers for D3S-related technologies.

That included a contract extension from its European government-related company customer, working with a European government to detect and protect against potential nuclear threats.

“The group added a new customer, a US government agency, for its D3S-ID product, received repeat orders from a US government customer for its CZT detectors for nuclear security applications, and received orders from the European Commission's Directorate-General for Migration and Home Affairs for the group's D3S Drone radiation detectors,” the directors said.

“Kromek also received orders in the security screening segment, including for CZT modules to be designed into an advanced baggage screening system of a new US-based customer.”

Kromek’s board said it was “excited” about the potential for its new market segment of biological threat detection, reporting that during the second half, it began piloting its airborne Covid-19 detection solution at an airport and at another public place, which were progressing according to plan.

“Consequently, and combined with the successful fundraising completed in the second half of the 2021 financial year, the group is well-placed to capitalise on the opportunities across its business, and the board continues to look to the future with increased confidence.

“The group will provide further information at the time of its annual results announcement.”

At 1442 BST, shares in Kromek Group were down 0.19% at 15.62p.