Kromek Group PLC (AIM:KMK) confirmed it will become profitable in the current financial year after it received the first $25 million (£20 million) payment from Siemens Healthineers under the multi-year agreements signed last month.
The payment follows the AIM-listed company completing the first milestone of the contract.
Chief executive Arnab Basu said the funds will be used to “support the delivery of various milestones under the agreement, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities”.
Under the deal with the US-based arm of Siemens, an additional $12.5 million aggregate payment will be payable over the next four years, which Kromek said will provide “a robust foundation for delivering significant revenue growth”.
The agreements are for Kromek to produce its cadmium zinc telluride (CZT) detector tiles for single-photon emission computed tomography (SPECT) for four years.
It will also transfer 15 of its current total of 174 furnaces to Siemens Healthineers, providing know-how and related production services on a non-exclusive basis.