The contracts are with new and existing customers, including the US Defense Threat Reduction Agency (DTRA) and the UK Ministry of Defence (MOD), and are expected to be delivered over the next six to 24 months. To put the size of the contracts into context, the company racked up revenue of £8.3mln (US$9.9mln) in the year to the end of April, 2016.
The biggest contract of the batch is a two-year agreement reached with the US DTRA, worth US$1.6mln, to build on, and further enhance, Kromek’s technology platform to develop a tough-as-old-boots high-performance isotope radiation detector capable of use in military and other harsh environments.
The company believes the DTRA contract represents another major opportunity to adapt its technology base to fit the needs of US military and security personnel working in the field.
Elsewhere, two of the remaining five contracts are in the nuclear radiation detection segment. One, worth US$430,000, is with the MOD, while the other, worth US$278,000, represents an extension to an existing contract with a major civil nuclear partner.
The group’s medical division has entered into an agreement, worth a minimum of US$560,000 over two years, for the supply of cadmium zinc telluride (CZT)-based gamma radiation detectors with an existing medical customer.
The final two contracts, worth US$265,000, were snagged by the aviation security division. One was for the company’s bottle scanners, from an Asian airport group that is a new customer, while the other was for components for screening systems from an existing customer; these contracts are expected to be fulfilled over the next six months.
“The contract wins add to the visibility of revenues, underpinning our belief in the continuing growth of the business and commercial traction resulting from the increasing adoption of CZT-based technology,” said Dr Arnab Basu, chief executive officer of Kromek.
Speaking to Proactive Investors, Dr Basu said today’s contracts “are the bedrock of our numbers” and should give the market increased confidence of the company’s ability to meet its targets.
The Kromek CEO said the company had being doing business with the US Department of Defense (DoD) for five or six years now, and the “frequency and quantum of the contracts are going up”.
He ascribed this to two things, the first of which is the relevancy of Kromek’s technology for the modern age. More important, arguably, is the quality of the work Kromek delivers.
“We deliver contracts on time and sometimes ahead of time,” he said, adding that sometimes it had surprised itself and customers, such as DARPA – the US DoD agency that appointed Kromek as sole supplier of personal radiation detection devices – by delivering well ahead of schedule, which does wonders for the company’s credibility.
“There’s a big, exciting story going on here,” he concluded.
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