What Kromek does

Kromek Group PLC (LON:KMK) is a developer and supplier of radiation detection products for the medical, security screening and nuclear markets.

The company’s products are based on cadmium zinc telluride (CZT), an alloy used primarily for x-ray and gamma radiation detection, as well as other technologies.

The group has operations in the UK and the US and sells its products internationally through a network of distributors, original equipment manufacturers (OEMs) and direct sales.

 

How is it doing

Reporting its results for the six months to October 31, 2020, Kromek said it is expecting “significant revenue growth” in the second half of the year thanks to “increased trading and improved visibility” as commercial activity rebounded.

For the first half, the company reported an adjusted (EBITDA) loss of £0.9mln compared to a £0.6mln loss in the prior year, while revenues moved to £4.6mln from £5.3mln.

Despite the wider loss, Kromek said orders and shipments had resumed across all of its segments in the final two months of the period as business patterns began to return to normal and commercial activity increased into the second half.

Meanwhile, the company also said it has begun a £1.25mln programme funded by Innovate UK to customise its biological threat-detection solution to automatically detect airborne viruses, including coronavirus (COVID-19).

Kromek said the solution is designed to be deployed in high footfall locations such as airports, hospitals, retail outlets and entertainment venues, with the initial focus of the programme being to develop a system to rapidly test for the presence of SARS-CoV-2, the virus that causes COVID-19.

The firm is also continuing progress elsewhere, saying in December that it has been awarded two contract extensions by a European government-related company.

The firm will provide network solutions of its D3S-related technologies to counter nuclear terrorism. The contract extensions are worth a total of £460,000 and will be delivered in the current financial year. In total, this company has provided Kromek with slightly more than £2.5mln of business.

 

Watch the interview

 

What the boss says: Arnab Basu, chief executive

“I am pleased to report that we finished the first half of 2020/21 in a stronger position than we entered the year, resulting from a considerable uptick in trading in the last two months of the period. We are starting to see a return to some normality in business patterns as our customers recommence their commercial activities. In particular, our largest medical OEM customer has begun shipping their next-generation scanner, which, as they continue to ramp up installations in the second half of the year, will enable the fulfilment of the long-term contract we have with them.”

“Looking ahead, the positive momentum seen in the last two months of the first half has continued into the second half of the year with increasing detector shipments. The renewed level of activity within our customer base is underpinned by the commercial traction Kromek has demonstrated in recent years in winning multiple, high-value contracts and we are excited about our new opportunities in the bio-security market. As a result, we expect to see significant growth in second half revenue compared with H1 2020/21 and the Board continues to look to the future with confidence and optimism.”

 

Inflexion points

  • Additional orders in all three divisions
  • Airport safety standards tightening around the world
  • New opportunities in biological detection
  • The company has new manufacturing plants in the US and UK

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