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Kromek ‘confident’ for 2017 as losses narrow in first half

“We have entered the second half with significant visibility over revenue in excess of 85% of full year market expectations”
x ray image in airport
Kromek designs develops and produces x-ray and gamma ray imaging and radiation detection products

Radiation detection specialist Kromek Group PLC (LON:KMK) is on track to hit expectations for its current financial year, telling investors it is heading into the second half with excellent visibility over its revenues.

The company said it is looking “to the future with confidence” as it continues to make good progress on the delivery of US$35.5mln of new orders won over the past 18 months.

On top of those contracts already secured, Kromek expects its medical imaging and nuclear detection protection products to be in high-demand over the coming months.

“We have entered the second half with significant visibility over revenue in excess of 85% of full year market expectations,” said chief executive Arnab Basu.

“Overall, our products continue to gain commercial traction resulting from the increasing adoption of cadmium zinc telluride-based technology.”

The ‘confident’ outlook came as Kromek posted a solid set of interim results that continue to demonstrate the improvements being made within the company.

The loss before tax for the six months to October was almost halved to £1.8mln (H1 2016: £3mln), on revenues of £3.8mln – a 19% increase on last year’s number.

Pleasingly for Kromek, product sales accounted for almost three-quarters of those revenues as several research and development programmes moved into the commercialisation phase.

The County Durham-based firm also kept a tight rein on its costs as it managed to shave almost £1mln from its administration expenses.

Underlying losses fell sharply too, down to just £0.7mln compared to £2.3mln a year earlier, while the gross margin remained steady at 53% (H1 2016: 53%).

Kromek still has a decent amount of cash at its disposal as well, with £3.8mln in the bank as of October 31.

“We are pleased to report another period of strong operational progress, continuing the momentum from the previous year as we executed on the significant contracts won in all of our three markets of medical imaging, nuclear detection and security screening,” Basu said.

“We saw high growth in the number of products sold compared with the same period last year and, equally important, a number of R&D programmes have moved into full commercialisation phase.”

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Kromek Group PLC Timeline

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