Kromek Group PLC (AIM:KMK) shares surged 30% higher to 7p after it reported improved trading in the past quarter and said it has won a seven-year contract with a top medical imaging manufacturer.
Under the agreement, the AIM-listed company’s cadmium zinc telluride-based detector technology will be integrated into the medical imaging scanners of the customer, which is said to be a Tier 1 original equipment manufacturer (OEM).
The customer has a significant market leadership position in medical imaging and Kromek has built a close working relationship with their team over the past few years, said chief executive Arnab Basu.
Then, following what is expected to be a short development phase, the agreement is seen transitioning into a longer commercial supply phase.
Kromek said the collaboration could potentially enable innovations that could bring about a new generation of imaging-based precision diagnosis and therapy, where the image quality associated with these innovations could enable the earlier detection of diseases, such as heart disease and cancer.
In a separate statement, the company said revenue in its third quarter to end-January 2023, was roughly 50% higher than in the year before and it continues to expect “substantial” growth for the full year.
It expects to report positive underlying earnings (EBITDA) for the second half, with gross margin improving due to the product mix sold and expected to return to the upper 40% level for the full year.
Trading has continued to be in line with market expectations, it added, and the company remains “broadly cash neutral” in the third and fourth quarters.