Kromek Group PLC (AIM:KMK) said it remains confident of delivering a full-year performance in line with market expectations, pointing to strong customer engagement and a healthy order book in the first half.
The AIM-listed group, which makes radiation and bio-detection technology for medical imaging and security markets, said momentum built in the first six months is expected to continue into the second half, supported by demand across both of its core divisions.
That confidence follows a sharp improvement in the half year to October 31. Revenue jumped to £15.0 million from £3.7 million a year earlier, driven by a surge in deliveries to medical imaging customers and a recovery in government-backed security spending.
Adjusted EBITDA, a measure of underlying operating profit, swung to a £6.0 million profit from a £2.3 million loss, while the company reported a pre-tax profit of £3.1 million compared with a £5.7 million loss last time.
Gross margins improved to nearly 72%, reflecting higher volumes and a richer mix of products.
The biggest contribution came from Advanced Imaging, where revenue rose to £10.8 million. Stripping out the effect of work for Siemens Healthineers, underlying revenue still rose 41%, helped by deliveries under long-term component supply agreements.
These include landmark contracts signed last year to supply cadmium zinc telluride detectors for use in SPECT scanners, a type of nuclear imaging system used in hospitals.
Kromek said it is also making progress on next-generation photon-counting CT technology, an emerging area in medical imaging that promises sharper images at lower radiation doses.
Validation trials for its ultra-low dose breast imaging technology have delivered encouraging results, according to the company.
The CBRN Detection division, which supplies equipment to detect chemical, biological, radiological and nuclear threats, more than doubled revenue to £4.3 million.
Growth was driven by new government work and a recovery in global demand. During the period, Kromek secured an initial £1.7 million order under a UK government nuclear detection framework and a £250,000 contract with the Ministry of Defence’s research arm.
Cash at the end of October stood at £1.2 million, down slightly on April, but the group said it had strengthened its funding position by securing a £6 million revolving credit facility, alongside a £0.5 million asset finance facility, to support further growth.
Dr Arnab Basu, chief executive, said the first-half performance reflected growing demand in national security and renewed engagement from medical imaging customers following the Siemens deal.
Looking ahead, he said the group expects the progress made so far this year to continue, leaving it on course to meet expectations for the full year.